Pimlico Plumbers: A person who works under the direction of a single company is likely to be a worker
The Supreme Court has dismissed the appeal of Pimlico Plumbers against the decision that one of its plumbers, Gary Smith, was a worker rather than self-employed. The result is not a great surprise but the particular factors which the court took into account are likely to be important for other cases in the future.
There are two parts to the worker test. The first is that a worker is someone who performs work personally and, crucially, this means that there is no right to send a substitute to carry out work on his or her behalf. In the Pimlico Plumbers case, it was found that Mr Smith could send a substitute to carry out work for him in limited circumstances, but this could only be another Pimlico Plumbers operative. The Supreme Court found that this right was not to be sufficient to establish that Mr Smith was not performing work personally.
The second part of the test is that a person is a worker if the other party to the contract does not have the status of a client or a customer. Although it held that there is no "single key with which to unlock the words of the statute", the Supreme Court did place particular emphasis on the question of whether the purported worker actively markets his or her services as an independent person to the world in general, or whether he or she is recruited by the principal to work for that principal as an integral part of its operations. In other words, a party to a contract is unlikely to be a client if, in practice, it would be the only client of the worker.
The main exception to this rule is where the individual is not subordinate to, and does not work under the direction of the other party to the contract. The fact that he or she has the right to turn down work and that he or she is self-employed for tax purposes seems to have less weight, at least in the case of Mr Smith.
The main effects of this case are to make it easier for individuals to establish that they are workers, and to significantly undermine the business model in which self-employed people work full-time for one company.