Plumber engaged as a contractor was a “worker”
Worker definition
A “worker” is defined in s.230(3) Employment Rights Act 1996 (ERA) as an individual who has entered into or works under a contract of employment, or any other contract whereby they undertake to “do or perform personally any work or services” for another party to the contract “whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual”. The same definition appears in the Working Time Regulations 1998 (SI 1998/1883) (WTR). Although there’s no worker definition in the Equality Act 2010 (EA), it defines “employment” as employment under a contract of employment “or a contract personally to do work” .
Independent contractor?
In Pimlico Plumbers Ltd and Mullins v Smith 2018 (see Follow up ), Mr Smith (S) had been engaged as a plumber by Pimlico Plumbers (PP) for over five years when he suffered a heart attack. PP terminated the relationship, so S brought claims for holiday pay, unlawful wage deductions and disability discrimination. The contractual documentation stated that S was an independent contractor and in business on his own account, that PP wasn’t obliged to offer him any work and S was under no obligation to accept it. He also had to provide his own tools and materials, take out his own liability insurance and he bore a high level of commercial risk. However, the documentation also stated that S should complete a minimum of 40 hours’ work a week, drive a PP branded van and wear a PP uniform and he was subject to restrictive covenants. There was no express right of substitution but, in practice, S could swap his assignments with other PP plumbers.
Supreme court decision
S succeeded in his claims before an employment tribunal and appeals by PP to the Employment Appeal Tribunal and Court of Appeal were dismissed, so PP appealed to the Supreme Court. Upholding the previous judgments, the Supreme Court dismissed PP’s appeal and held that S was a “worker” for the purposes of ERA and the WTR and in “employment” under the EA . It firstly determined that personal service was the dominant feature of S’s contract, notwithstanding the limited right of substitution. The contractual terms were clearly directed to performance by him personally and any substitute had to be another PP plumber – it wasn’t an unfettered right of substitution. Secondly, the relationship between S and PP wasn’t that of business and client, having regard to his obligations to work for PP and the tight controls to which he was subject.
Implications
Like many employment status cases, this is a highly fact-sensitive decision and so is of limited precedent value. It also provides no further clarification on the meaning of “worker” .
Pro advice. If you engage contractors, make sure that both the contractual terms and the reality of your working practices clearly reflect their status. Any right of substitution should be genuine and unfettered and it should be exercised in practice (see Follow up ). The contractor should also actively market their services to the world in general and not work as an integral part of your organisation.
Pimlico Plumbers Ltd and Mullins v Smith 2018
Substitution clause
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