The Court of Appeal has finally poured cold water over claims by Pimlico Plumbers by upholding a decision that plumber Gary Smith is a worker rather than self-employed.
The long-running saga dates back to February last year when an employment tribunal decided Mr Smith was a worker, and entitled to holiday pay and other benefits. Mr Smith had worked exclusively for the firm for more than five years, but was dismissed when he had a heart attack, in 2011.
The tribunal highlighted the fact Pimlico Plumbers gave the impression to the public that their tradesmen were employees. But ultimately, it was the level of control over the way in which the plumbers supplied their services that led to Mr Smith being given worker status.
Pimlico Plumbers believed they could:
Despite these restrictions, they thought the addition of clauses that called the workers self-employed and referred to substitution would see them through. When the employment tribunal disagreed, Pimlico Plumbers took its case to the Appeal Court – only to suffer a second defeat.
Hudson Contract Managing Director Ian Anfield observes: “We always knew something useful would come out of the Pimlico Plumbers case, and I’m sure the owner Charlie Mullins will be pleased to know, after spending tens of thousands of pounds in legal fees, that it has. The Appeal Court has now carefully clarified how far a firm can go before it wipes out the effectiveness of a substitution clause.”
The lessons learned are:
For example, if a subcontractor can send a substitute only when they are ‘unable’ to carry out the work – say because they are in hospital – that is going too far. Whereas if the contract says a substitute can be sent when the subbie is ‘unable or unwilling’ – because they have better things to do – that is fine.
Equally, it is acceptable to expect the substitute holds the equivalent skills and experience to perform the task. But to hold absolute discretion over consent to someone sending a substitute is going too far.
Ian Anfield adds: “Having had these arguments many times ourselves, it’s useful to have binding authority. And for all the reasons Pimlico Plumbers failed, Hudson Contract wins. Our contracts do not contradict themselves, and we constantly warn clients against the temptation of treating or presenting sub-contractors like employees.
“If you need exclusivity, set working hours and people who turn up presenting themselves as your employees, you should employ them. If you wish to draw on the large pool of highly skilled self-employed operatives out there, Hudson Contract provides the safest and most efficient way of doing so.”
As for Pimlico Plumbers, the story may not have ended, even now. Mr Mullins is on record as saying he will ‘more than likely’ take the case to the Supreme Court. As the saying goes, watch this space...
Managing Director, Hudson ContractMore from this expert
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