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The Government must define self-employment to avoid the kind of uncertainty which led to the most recent case of a disguised employment ruling against Pimlico Plumbers, say self-employed campaigners.
The Supreme Court ruled today that plumber Gary Smith was a worker, and not a self-employed contractor and was therefore entitled to certain rights, including holiday pay and protection from direct disability discrimination.
Smith had worked solely for Pimlico Plumbers for six years and had asked to reduce his hours following a heart attack in 2010.The firm refused his request and took away his branded van, which he had hired. He claimed he was dismissed, but the firm said he was self employed.
The Court ruled that, while some aspects of Smith’s conditions resembled self-employed, such as the entitlement to refuse work and being responsible for dealing with faults and bad debts, the fact that Pimlico Plumbers exercised tight administrative control over him during his periods of work for them, for instance, requiring him to wear a branded uniform, have a tracker on his branded van and having a contract that referenced ‘gross misconduct’ and ‘dismissal’, meant he should be considered a worker.
It is one of a series of recent rulings on disguised employment relating to the so-called gig economy.
Following the ruling, Tim Goodwin, associate at Winckworth Sherwood, says: “The basic rule of thumb in all these gig economy cases is the same: As a business, you cannot expect to exercise complete control over your staff whilst at the same time deny that they are workers, or even employees. In this case, the individual had to wear a uniform, work a 40-hour week, was subject to disciplinary rules and was limited in who he could work for after he had left. This gave Pimlico Plumbers enormous control over his activities. But it also significantly undermined Pimlico Plumbers’ key contention that he was self-employed.
“Furthermore, even with a high level decision like this, to a degree the issue of employment status in the gig economy is up in the air. The Government is consulting on this issue, and may bring forward legislation. So it’s quite possible that Parliament may overrule this decision within the next few months or years.”
IPSE (the Association of Independent Professionals and the Self-Employed) said the government needed to write into statute a positive definition of self-employment to avoid the type of uncertainty over who is and who isn’t a contractor which led to the Pimlico Plumbers case.
IPSE’s Director of Policy Simon McVicker said: “IPSE understands the Supreme Court’s decision today, and welcomes the certainty it provides for Mr Smith over his employment status.
“IPSE supports genuine self-employment because of the clear benefits it brings to our economy.
“We do not think businesses should be able to use the uncertainty about the legal definition of self-employment to declare that their workforce should all be contractors.
“The best way to address this legal uncertainty is to write into a law a positive definition of what constitutes self-employment. This would send a clear signal about who is and who isn’t self-employed, and would mean that people wouldn’t have to go all the way to the Supreme Court to get a resolution.
“We should also be careful not to conflate the circumstances of this case with all instances of self-employment. In fact, the reality is that the vast majority of self-employed engagements are what they claim to be: genuine business-to-business engagements which are mutually beneficial to both parties.”