Supreme Court decision strikes blow against gig-economy

Supreme Court decision strikes blow for gig-economy

The Supreme Court has ruled on the case of a plumber who had argued he was being denied working rights in a decision expected to have serious ramifications for the ‘gig-economy’.

Gary Smith has won the right to take his case to a tribunal claiming that he was unfairly dismissed by Pimlico Plumbing in 2011, after a heart attack meant he was unable to work as many hours as he had previously.

The decision for the court was whether the relationship between Mr Smith and Pimlico Plumbing was that of an ‘employer/worker’ or whether he was a ‘self-employed contractor’.

Despite paying self-employed tax and being VAT registered, the court decided that Mr Smith had been a ‘worker’ for the full six years he had worked for the company.

In turn, Pimlico Plumbing argued that Mr Smith had freedoms to choose the manner of his work, which would prevent him from meeting the legal criteria for a worker.

However, the court disagreed, asserting that the company exercised “tight administrative control” over Mr Smith, requiring him to wear a branded company uniform, lease one of its branded vans and work a minimum number of hours per week.

‘Worker’ status – a legally defined term - means entitlement to the national minimum wage, holiday pay, sick pay and protection from discrimination at work. The decision has been hailed as a watershed moment by campaigners, but the response from experts has been more reserved.

Philip Richardson, Head of Employment Law at Stephensons, said: “While stopping short of setting a precedent, the Supreme Court judgement has nonetheless applied pressure to legislators to ‘sort out’ the growing confusion surrounding the gig economy.

“While some employers will argue that these casual working arrangements promote greater flexibility and independence, there appears to be growing alarm at the frequency with which these cases are coming before tribunals and the courts. Mr Smith’s case is one of a number of high profile disputes which have put the employment practices under the spotlight.

“One of these companies – Uber – attempted to launch a Supreme Court challenge of its own last year, in defence of its own casual working practices. While the company was ultimately forced to seek clarification in the Court of Appeal first, this decision might embolden judges in again refusing Uber’s appeal.

“In my view, given today’s decision and the ongoing Taylor Review into working practices, it is now a matter of ‘when, not if’ legislation is brought in to prevent employers from using these gig economy models.”