"Worker" status: What can we expect from the Supreme Court in the Pimlico Plumbers case?

Author: Darren Newman

Darren Newman

Consultant editor Darren Newman expresses surprise that Pimlico Plumbers was granted permission to appeal to the Supreme Court in a case concerning the "worker" or otherwise status of a self-employed plumber - and asks which particular issues the Court might consider.

To my mind, the most surprising thing the Supreme Court has done this year is to give permission to appeal in the case of Pimlico Plumbers Ltd and another v Smith. This is the case involving - as you might expect - a plumber, Mr Smith, who was engaged as an "independent contractor". He brought a range of claims including unfair dismissal, disability discrimination and entitlement to holiday pay. The tribunal found that he was not an employee for the purposes of claiming unfair dismissal and that question is no longer in issue. What is being challenged in the Supreme Court is the Court of Appeal's decision to uphold the finding that he was nevertheless "in employment" for the purposes of the Equality Act 2010 and was a worker for the purposes of the right to paid annual leave.

The Supreme Court does not hear an appeal from just anyone who happens to be unhappy with a decision of the Court of Appeal. To get permission to appeal one has to have an arguable point of law that is of "general public importance". No one doubts the importance of the point at issue here - but I am surprised that the Court was persuaded that Pimlico Plumbers had an arguable case. The decision of the Court of Appeal attracted a lot of publicity, but did not strike me as legally groundbreaking - it seemed to turn very much on its own particular facts. Nevertheless the Supreme Court has obviously been persuaded that there is an issue here that it wants to weigh in on.

In the Court of Appeal, Pimlico Plumbers focused on two key points. The first was the requirement that a worker should have a personal obligation to perform work for the employer. It argued that plumbers could nominate other operatives to cover their work and could also engage external contractors to assist them. The Court of Appeal rejected the suggestion that this meant that there was no obligation on Mr Smith to perform work personally. Perhaps the Supreme Court will be asked to look at the extent to which a limited right of substitution is sufficient to mean that there is no worker relationship.

The other key issue raised by Pimlico Plumbers was mutuality of obligation - the extent to which the employer is obliged to offer work and the worker to undertake the work that is offered. The contract engaging Mr Smith emphasised that there was no obligation to offer work in any given week and that Mr Smith was free to turn down any work that might be offered to him. This was a key factor in the tribunal's decision that he was not an employee, but the Court of Appeal agreed that it did not stop him from being a worker. However, in Windle and another v Secretary of State for Justice [2016] IRLR 628 CA, the Court of Appeal held that the concept of "mutuality of obligation" could also be used by a tribunal in deciding that interpreters working for Her Majesty's Courts and Tribunals Service had a degree of independence that was inconsistent with worker status. The Supreme Court refused to hear an appeal from that decision, but has perhaps changed its mind and sees this case as an opportunity to lay down clear guidance on the issue.

Perhaps the Supreme Court will also look at whether or not the test for employment under the Equality Act 2010 really is the same as the test for worker status in relation to other employment rights. The wording is different, with the Equality Act requiring a contract to perform work personally but saying nothing about the employer being a client or customer of the individual's business. The courts have nevertheless regarded the two tests as being essentially the same, mainly based on the 2004 decision of the European Court of Justice in Allonby v Accrington & Rossendale College and others [2004] IRLR 224 ECJ excluding "independent providers of services" who were not subordinate to the employer. Lady Hale (the new President of the Supreme Court) has previously downplayed the importance of "subordination" in determining worker status (in Bates Van Winkelhof v Clyde & Co LLP and another [2014] IRLR 641 SC). In that case, she emphasised that there was no one single test to apply and that the key task of the tribunal was simply to apply the words of the statute.

I won't make the mistake of trying to predict what the Supreme Court is likely to decide before the case has even been argued. But, for what it is worth, I think it would be a retrograde step if someone in Mr Smith's position were unable to claim the protection of the Equality Act. This is not a gig economy case and it is worth acknowledging that Mr Smith was able to make a good and secure living as a plumber and could no doubt afford to take holidays when he wanted to. However, that is no reason for not protecting him from discrimination. The merits of his discrimination claim have yet to be considered, but it would seem wrong that a business could discriminate against those working under its brand just because they were not guaranteed work and could arrange for someone else to cover a particular assignment.

The wheels of justice grind slowly and it seems unlikely that we will get a decision from the Supreme Court in this case until the second half of 2018. What do we do in the meantime? So far this year we have seen a number of high-profile cases examining worker status - indeed a case involving Uber drivers is due to be heard by the Employment Appeal Tribunal this September. However, now that the Supreme Court has agreed to hear Pimlico Plumbers Ltd and another v Smith, the question arises as to whether or not these cases should be kept on hold until the Supreme Court has made its decision. There seems to be little point in a tribunal hearing argument about legal tests that might turn out to be wrong.

It also seems unlikely that any progress will be made in relation to the recommendations made by the Taylor review on worker status. The Government has a lot on its plate already; so waiting for the Supreme Court ruling is likely to be an attractive option. We can at least hope that when the decision finally comes it provides us with a good clear answer as to who is protected by employment law.