Video Report by ITV News Business Editor Joel Hills
The UK’s highest court has dealt a blow to the so-called gig economy in a landmark ruling over the employment status of a plumber.
Gary Smith, who worked for Pimlico Plumbers for nearly six years from 2005, previously won a number of court rulings which determined he could claim “worker” status, even though he was described in his contract as a “self-employed operative”.
Those were upheld unanimously by five Supreme Court justices, who rejected an appeal by Pimlico Plumbers.
What is so important about this particular ruling?
The ruling is likely to have a major impact on the sort of flexible working arrangements which have been on the increase in recent years and could affect a number of other cases currently progressing through the courts.
As a “worker”, Mr Smith is now entitled to employment rights including holiday and sick pay.
Hee will now be able to go ahead with his employment tribunal claim for unfair dismissal against Pimlico Plumbers as a “worker”.
Mr Smith's legal team has also predicted that the outcome will have an impact on other workers in the gig economy.
What is the background to Mr Smith's court case?
Mr Smith, a plumbing and heating engineer, was one of 125 contractors Pimlico Plumbers could call on to carry out jobs for its customers and had a company uniform and van which he rented.
He claimed that, after suffering a heart attack in 2011 and trying to reduce his hours, he was unfairly dismissed and the tribunal made a preliminary finding that he was a “worker” within the meaning of the 1996 Employment Rights Act.
That decision was upheld by the Employment Appeal Tribunal and again by the Court of Appeal in January last year.
The Court of Appeal found Mr Smith was a worker because he was required to use the firm’s van for assignments and was contractually obliged to do a minimum number of hours a week.
What did the Supreme Court say in their ruling?
Rejecting the appeal by Pimlico Plumbers, Lord Wilson said an employment tribunal was “entitled to conclude” the firm could not be regarded as having been a “client or customer” of Mr Smith.
The judge said: “Although the contract did provide him with elements of operational and financial independence, Mr Smith’s services to the company’s customers were marketed through the company.
“More importantly, its terms enabled the company to exercise tight administrative control over him during his periods of work it; to impose fierce conditions on when and how much it paid to him, which were described at one point as his wages; and to restrict his ability to compete with it for plumbing work following any termination of their relationship.”
How have Mr Smith and Pimlico Plumbers reacted?
Pimlico Plumbers chief executive Charlie Mullins attacked the court’s ruling as “disgraceful”, saying the judges had missed an opportunity to update employment laws.
Speaking outside the court, he said: “It was a terrible decision. They had an opportunity to rectify our out-of-date employment rights and they bottled it.
“The case is not over. I will be talking to my lawyers about where we go from here. We could possibly go to a European court of law."
Mr Smith said he would now be celebrating his victory with a drink.
“I’m glad it’s all over. It has been quite stressful and arduous,” he said.