Plumbing in the Court of Appeal

14 Feb 2017

Gary Smith worked for Pimlico Plumbers between 25 August 2005 – 28 April 2011. He had a heart attack in January 2011 and claimed the subsequent termination of his engagement was unfair dismissal. There were other claims but the key issue concerned Gary’s employment status. The case turned on it’s facts which in broad terms were these:

  • there was a written agreement in 2005 describing Gary as the “ sub contracted employee” and in which he accepted the company’s procedures and working practices manual;
  • that manual contained provisions dealing with Gary’s personal appearance and conduct (including that he wear the company’s uniform), availability for an on-call rota, regular reporting to a control room, procedures for timesheets, estimates, invoicing & extras, deductions for unpaid invoices, mobile phones, ID cards, procedures for purchasing and charging for materials, wages, van rental and private work;
  • the agreement was expanded in 2009 under a heading “Agreement – self-employed operative.” This included new text providing for termination for gross misconduct, working periods and no mutual obligations to provide or undertake work, correcting errors, fees and invoices, tax & NIC, tools and equipment, expenses, insurance, conflicts of interest and restrictive covenants;
  • Gary worked solely for the company though he could reject jobs and decide his own working hours;
  • Gary had discretion about the work required on a job and his work was unsupervised;
  • Gary believed he was self-employed. He registered under the Construction Industry Scheme, filed tax returns as a self-employed plumber, registered for VAT and showed that in his last full year of work he paid £52,887 for materials.

The legal question was whether Gary was a self-employed plumber working on his own account or a worker providing personal services as part of another business? The Employment Tribunal and the Employment Appeal Tribunal said Gary was a worker and the Court of Appeal agreed. In a 10 page section of his judgement the Master of the Rolls succinctly reviews nearly 50 years of case law before returning to the facts and the key to the solution; the relationship between Gary and the company had to work for both of them and it would only do so if there was a mutual commitment to a minimum number of hours’ work each week.

This is the third high profile decision in this field in as many months and it coincides with the publication of reports by the government and the TUC on related topics.  It’s a safe bet we’ll hear much more about this in the next couple of years so prudent employers will check their employment models now and line their ducks up for inspection. Remember the duck test? if it looks like a duck, swims like a duck and quacks like a duck then it might just be a duck.