Friday, 5 December 2014

Plumber deemed a worker - Pimlico Plumbers v Smith.

A plumber who wore a 'Pimlico' Plumber's uniform, drove a van and  payment was made to Pimlico was deemed a 'worker and not an employee' in Pimlico Plumbers v Smith.

In upholding the decision that he was not an employee, the EAT held the employment tribunal had been entitled to have regard to the Claimant's financial risk, the degree of autonomy as to quotations and how work was carried out. It was also of significance that both parties acted as though the Claimant was self-employed.


The terms of the agreement between the Claimant and Pimlico as found by the Employment Tribunal, included the following;
1.                  The Claimant was a self employed operative described as an independent contractor of the Company, in business on your own account.  Nothing in this Agreement shall render you an employee, agent or partner of the Company and liable to account for his income tax and value added tax and social security contributions.

2.                  He was required to provide all his own tools, equipment, materials and other items required.

3.                  The Claimant accepted personal liability for work undertaken by him.

4.                  The Claimant was required to provide insurance.

5.                  Normal Working Hours consisted of a 5 day week, with a minimum of 40 hours.

6.                  There was no express provision permitting the Claimant to provide a substitute in respect of services he had agreed to provide.

As a matter of practice Pimlico permitted operatives to transfer work to other operatives but there was no unfettered right to substitute another operative.


The Employment Appeal Tribunal derived the following principles from the authorities;
In considering whether a person is a limb (b) worker the starting point must be the words of the statute and that there is no one formula or characteristic than can be said to be determinative.
1.                  The Court or Tribunal must take a holistic approach and may take account of matters such as the degree of subordination of the worker to the ‘employer’ and the degree of his integration into the ‘employer’s’ business and also whether the contract between employer and ‘worker’ was in essence a contract between two independent business undertakings; the extent to which the ‘worker’ carried out work other than for the ‘employer’ and his right to do so.

2.                  The employer of a person integrated into the employer’s workforce and carrying out work for that employer is in no sense his customer or client.

3.                  If a ‘worker’ carries out work for more than one ‘employer’ he can nonetheless be a limb (b)  worker of one or more such employers if the statutory criteria are met.

In this case the issue of substitution became relevant:


100.   The relevant authorities in determining whether a person was an employee or worker including those of Ready Mixed Concrete and Market Investigations were considered in the Supreme Court by Lord Clarke in Autoclenz [2011] ICR 1157.  At paragraph 19 Lord Clarke stated:
“Three further propositions are not I think contentious:

i) As Stephenson LJ put it in Nethermere (St Neots) Ltd v Gardiner [1984] ICR 612, 623,

‘There must … be an irreducible minimum of obligation on each side to create a contract of service’.

ii) If a genuine right of substitution exists, this negates an obligation to perform work personally and is inconsistent with employee status: Express & Echo Publications Ltd v Tanton (‘Tanton’) [1999] ICR 693, per Peter Gibson LJ at p 699G.

iii) If a contractual right, as for example a right to substitute, exists, it does not matter that it is not used. It does not follow from the fact that a term is not enforced that such a term is not part of the agreement: see eg Tanton at p 697G.

The essential question in each case is what were the terms of the agreement.”

The vital paragraph in relation to 'limb b' workers such as the present case deals with the relevance of the right to provide a substitute worker and whether it makes any difference if that right is unfettered or not:

'120.   I apprehend that in this regard the position of putative employees and limb (b) workers is similar; Premier Groundworks was a case involving limb (b) workers rather than employees. Even if the Respondent could establish that the Claimant had a contractual right to delegate his work or to provide a substitute the Claimant would still be considered to be a limb (worker) because his right was not unfettered.'

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5 comments:

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