Court of Appeal rules in favour of workers in latest gig economy legal battle

Court of Appeal rules in favour of workers in latest gig economy legal battle

The highest court yet to consider a case on workers' rights, the Court of Appeal, has ruled that a Pimlico Plumbers worker is entitled to workers' rights even though he was basically self-employed - the BBC reports. 

This is the latest ruling to fall in favour of workers as the shape of the flexible workforce, or gig economy, starts to truly take shape.

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London's largest independent plumbing and service company claimed that Garry Smith was self-employed, saying that he was VAT registered and was self-employed in the eyes of the taxman.

After a heart attack, Smith wanted to reduce his working week to three-day week. However, the company did not allow this and took away the branded van that he had hired.

He had worked for no one else except for Pimlico Plumbers for six years.

Smith argued that he should have basic workers’ rights such as minimum wage, aid holiday and the right to bring disability claims. Smith was proved right: he, and many others, are workers not employees - an important distinction.

The BBC explains: “Being given the status as workers means that they would be entitled to more rights than would be the case if they were just self-employed and taking on work on totally freelance basis.”

An employment tribunal, followed by the Court of Appeal, both ruled in favour of Smith.

The case could still go in front of the Supreme Court. 

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Pimlico Plumbers’ Founder, Charlie Mullins, stated that plumbers were employed on the understanding that they bought their own materials and would not be entitled to workers’ benefits – essentially rendering them self-employed. As a result of this they had higher earnings.

Sean Nesbitt, Partner in the Employment, Pensions & Mobility team at international law firm Taylor Wessing, says that the seniority of today’s case carries more weight than any judgment of the Employment Appeals Tribunal in the Uber case, which is yet to be heard.

“Both the Uber case and City Sprint were heavily influenced by findings that the facts were different to how they were presented by contracts drafted by an ‘army of lawyers’,” Nesbitt explains. “In other words, broad reference to context can always influence the interpretation, which can make it more likely that claimants will be able to show they are workers.”

“There is a strong hint that courts in the future may look at restrictive covenants as being one of the important features in determining worker status. The Court actually included the covenants in an annexe to its judgment: this is a strong hint that businesses which include these restrictions may be open to challenge on worker status.

“Many businesses which use contractors include restrictive covenants. That can cover medical services, accountancy, IT and software development as well as other ‘relationship’ professions.  If they want to be secure in engaging people other than as workers or employees, they may need to look again at the terms included for their business protection.  It will likely carry weight in the mainstream economy as much as in the continuing flow of gig economy and courier cases yet to be heard.”

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