A plumber has won a long-running legal battle with Pimlico Plumbers at the Supreme Court, in a ruling expected to have major ramifications for freelance workers.
Gary Smith worked solely for Pimlico Plumbers for six years but asked to reduce his hours following a heart attack in 2010.
He wanted to move from a five-day week to a three-day week but the firm refused his request and took away his branded van, which he hired.
Jones claims he was dismissed and took legal action at an employment tribunal in August 2011 in a bid to claim “employee” status.
While he lost his claim for employee status at the tribunal, he was classed as a "worker", which entitled him to limited employment rights.
Pimlico Plumbers appealed the decision at an appeal tribunal, again at the Court of Appeal, and most recently at the Supreme Court.
The Supreme Court ruled that despite being VAT-registered and paying self-employed tax, Jones was entitled to workers’ rights.
It determined that the employment tribunal was "entitled to conclude" that Smith was a worker.
Pimlico Plumbers chief executive and founder Charlie Mullins warned that UK companies using self-employed contractors face a "tsunami of claims" after his firm lost the case.
Mullins said he was "disgusted" by the Supreme Court’s approach to the case.
He said: "For those who think this is a victory for poorly paid workers everywhere, against large corporations who exploit their lack of bargaining power, think again.
“In fact, this was exploitation, but instead by a highly-paid, highly-skilled man who used a loophole in current employment law to set himself up for a double pay-day.
“The shame of all this is that it is generally accepted that current employment law is not fit for purpose, and needs to be changed. But when it’s put to the test in our highest court there isn’t even the slightest suggestion that there is a problem that needs to be addressed.
“This was a poor decision that will potentially leave thousands of companies, employing millions of contractors, wondering if one day soon they will get nasty surprise from a former contractor demanding more money, despite having been paid in full years ago. It can only lead to a tsunami of claims.”
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I’m inclined to agree with Charlie Mullins here.
The picture is painted of a big company exploiting the contractor by denying him the rights he is entitled to, and this case is a victory for ‘the little guy’
The reality I see day to day is somewhat different, with skilled tradespeople and professionals operating in this way to be in control of their own destiny and also to earn themselves a (on the surface) better income, with the knowledge that they need to cover their own sickness pay, pension, holidays etc.
No doubt Pimlico do get some benefit from employing their people in this way, but it doesn’t for a minute manifest itself to me as exploitation.
I have no doubt, however, that some people are exploited by being forced to contract in this way when really they should be employed, and this needs to be addressed.