The Guild News

PIMLICO PLUMBERS LOSE EMPLOYMENT CASE IN SUPREME COURT

You may have read about the recent judgment against Pimlico Plumbers (Pimlico) with interest and perhaps a little concern. I wanted to write to you at the earliest opportunity to discuss what the judgment might mean for you and your business.

Background

Mr Smith worked for Pimlico between 2005 and 2011. In 2011 he suffered a heart attack and on his return, he approached Pimlico to request a shorter working week. His claim was that Pimlico refused the request and dismissed him. He commenced legal action accordingly.
The case history is long and tortuous, but, fundamentally, the Supreme Court’s focus was on whether the Employment Tribunal had been entitled to find that Mr Smith was what’s called a ‘limb b’ worker under section 230(3)(b) of the Employment Rights Act 1996.

The essential features are:

  • Personal service
  • The other party to the contract is not a client or customer (by virtue of the contract)

The Supreme Court found that the Employment Tribunal had indeed been entitled to consider Mr Smith a worker on both the above points.
It’s important to note that the Supreme Court did not break new legal ground in arriving at its decision. Rather, the Supreme Court essentially confirmed the legal position in respect of Pimlico and, indeed, businesses that operate in a similar way.

Pimlico’s Model

Pimlico engaged the services of the self-employed to carry out its work. Pimlico nevertheless held these individuals out as ‘Pimlico’ people, both in its marketing and with Pimlico branded uniforms, vans and IDs.
It can be difficult enough to run this sort of model compliantly, but Pimlico also sought to exert considerable control over the working lives of its people.
In particular, a Company Procedures and Working Practices document (the Manual) was incorporated into the contract, which set standards for behaviour, normal hours of work and the like. Between the Manual and the contract, which unhelpfully made numerous references to “wages”, “gross misconduct” and “dismissal”, Pimlico’s people were subordinate to Pimlico, which held a grip over their livelihoods through one-sided payment terms and charges, and tied them up with restrictive covenants after their contracts terminated.

This is a very brief precis of a technical judgment, of course, but what should be clear from this is that this a highly fact-specific scenario. Cases like this however, provide us with a sharp reminder of the need for sound compliance. At the Guild, we will continue to lead the way in compliance as we have done over two decades.

Should you have any concerns regarding the status of your operatives, please speak with your usual Guild contact or call us on 020 8515 2975.

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