The Court of Appeal has rejected the claim by London-based Pimlico Plumbers that one of its former workers was self-employed. And although the company insists its contracts are now watertight, the way they treat their workforce could still blow up in their face.
The case began over a year ago, when an employment tribunal decided plumber Gary Smith, who had been with the company for six years before being dismissed in the wake of illness was a ‘worker’ and entitled to employment rights.
It is clear where Pimlico went wrong. To the outside world, Pimlico gave the impression its plumbers were employees. But, it was the level of control over the way the plumbers supplied their services that led to Mr Smith being given worker status.
Pimlico made some classic – and surprisingly naïve – mistakes in the way they drafted their contracts and with the relationship they wanted to have with their plumbers.
For example, the firm believed they could impose minimum working hours and an exclusivity clause to prevent the plumbers working for anyone else, and they even demanded personal service. They thought they could counter this with contradictory contractual clauses calling the workers self-employed and referring to substitution.
Immediately after the ruling, Pimlico said it was considering a further appeal to the Supreme Court, although I suspect their lawyers will advise them against this. In a legal sense, to try once again to persuade a court to uphold their flawed self-employment contracts would be like one of their plumbers repeatedly going back to add expensive new parts to a rusty old boiler that could never be brought back to life.
Charlie Mullins, the owner of Pimlico Plumbers, has thanked the court for its clarity, and says his contracts are now watertight. But unfortunately for Charlie, it’s the control over the workforce that needs to change.
Contracts are useless if they bear no relationship to everyday reality, and Pimlico should know that pushing paperwork into the leaks will eventually blow their whole system.
By contrast, for all the reasons the Pimlico Plumbers contracts failed, Hudson Contract wins.
Our contracts do not contradict themselves, and we constantly warn clients against the temptation to treat or present sub-contractors like employees. If you need exclusivity, set working hours and people who turn up presenting themselves as your employees, then you should employ them. If you wish to draw on the pool of self-employed labour, Hudson Contract provides the advice, method, and auditing to allow this without the risk of a Pimlico-type judgement against you.
Managing Director, Hudson ContractMore from this expert
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