Plumber wins legal battle for workers' rights in landmark case for gig economy

Self-employed workers such as those who work for Uber, Deliveroo and other gig economy jobs could also be entitled to sick pay and other benefits after the ruling

Ben Chapman
Friday 10 February 2017 14:14
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Many self-employed contractors like Gary Smith could be entitled to sick pay and other workers’ rights
Many self-employed contractors like Gary Smith could be entitled to sick pay and other workers’ rights

A plumber has won a legal battle for employment rights that could have implications for thousands of workers across Britain’s booming gig economy.

The Court of Appeal ruled that Gary Smith, who worked for Pimlico Plumbers for six years until 2011, was entitled to basic rights such as sick pay even though he was technically self-employed.

Mr Smith claimed he was dismissed following a heart attack and sued Pimlico for sick pay.

The case is the latest of several that have scrutinised the relationship between independent contractors and companies such as Uber, Deliveroo and parcel delivery firm Hermes.

This is the highest UK court so far to consider such a case and could mean greater protections for thousands of independent contractors working job-to-job with little security and limited employment rights.

The number of gig economy jobs has surged in recent years but campaigners have said it leaves many with no guarantee of earnings and no protection if they cannot work. In some cases workers claim they have been paid less than minimum wage.

Natalie Razeen at Russell-Cooke said: “Self-employment was once seen as a sign of having successfully established oneself and of finally being able to pursue one’s ambitions on one’s own terms.

“However, the advent of the ‘gig’ economy has meant that many of those now classified as self-employed are not necessarily ‘living the dream’.

“In fact it can be quite the opposite, as the truly self-employed will not enjoy basic rights such as the right not to suffer discrimination. They may therefore find it difficult to rely on the businesses they contract with providing flexibility when it is needed.”

Jonathan Chamberlain, partner at the law firm Gowling WLG, said the ruling was the latest to examine business models “which seek to control people as if they were employees but pay them as if they were not.

“Once again, the so-called 'self-employed' have been found to be workers,” Mr Chamberlain said, warning that as long there is disparity in pay, tax and legal protections between different forms of employment, businesses will continue to take advantage.

The judgment is a “wake-up call for employers reliant on independent contractors as an integral part of their businesses”, according to Naeema Choudry, partner at Eversheds Sutherland.

Judges warned that the ruling would not necessarily be applicable to all workers in similar positions.

“Although employment lawyers will inevitably be interested in this case – the question of when a relationship is genuinely casual being a very live one at present – they should be careful about trying to draw any very general conclusions from it,” said Lord Justice Underhill.

The Court of Appeal’s ruling comes just days after the TUC published a scathing report warning that British workers face “cut-rate, bottom-of-the-league protections” after Brexit, with more zero-hours contracts and fewer guarantees over holiday and equal pay.

The number of workers without guaranteed hours or basic employment rights has risen by more than 660,000 in the past five years, the study found.

In October, a London employment tribunal ruled that Uber drivers are entitled to receive the national minimum wage and holiday pay because they are workers, not self-employed.

The tribunal rejected Uber’s argument that the drivers do not work for Uber, but merely use its technology.

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