...despite the wording of his contract purporting to make him an independent contractor.
A worker is defined under the Employment Rights Act 1996 (ERA 1996) as an individual who has entered into or works under:
If a contract contains a genuine and unfettered right of substitution there will be no personal service under the second point of the test set out above.
Whilst workers do not benefit from the full range of protection afforded to employees, they are entitled to paid holidays, protection from discrimination and the national minimum wage.
Mr Smith worked for Pimlico Plumbers (PP) from 2005 under an agreement which labelled him as an independent contractor. PP terminated the agreement in 2011, 4 months after Mr Smith suffered a heart attack.
Following the termination, Mr Smith brought claims of unfair dismissal, wrongful dismissal, entitlement to pay during medical suspension, holiday pay, unlawful deductions from wages, disability discrimination and failure to provide written particulars of employment.
At a preliminary hearing the Employment Tribunal (ET) held that whilst Mr Smith was not an employee he was a worker. In practice there was only a limited right of substitution and he was subject to tight controls by PP. PP appealed against this decision to the EAT and then to the Court of Appeal, both of which upheld the original findings.
Further details of the background to the case and analysis of these earlier decisions can be read here.
PP appealed to the Supreme Court.
The Court dismissed the appeal. The ET was entitled to find that despite the express wording of the contract describing Mr Smith as an independent contractor he was, in fact, a worker.
Whilst this case has made headlines, it is very fact-specific and does not provide much in the way of further clarification in relation to 'worker' status. It is therefore unlikely to have much of an impact on other ongoing gig economy claims involving companies such as Uber and Deliveroo.
However, the case does serve as a useful reminder to employers to ensure that their written contracts accurately reflect the reality of the working relationship in practice. With that in mind, employers should keep a close eye on how they engage independent contractors and workers, particularly if they are working in a changing or developing workplace.