Pimlico Plumbers Ltd v Smith

The Court of Appeal dismissed the employer’s appeal and upheld the Employment Tribunal’s and Employment Appeal Tribunal’s conclusions that Mr Smith was not an employee but was a "worker" within the meaning of section 230(3)(b) of the Employment Rights Act 1996 and regulation 2(1) of the Working Time Regulations 1998 and that his working situation fell within the definition of "employment" in section 83(2)(a) of the Equality Act 2010. The court held that the 2009 Agreement and related Manual required Mr Smith to provide services personally, there was no contractual unfettered right of substitution and the contractual and practical arrangements (including a minimum working-week expectation in the Manual, restrictive covenants and operational control) indicated an umbrella or limb (b) worker relationship rather than a genuine business-and-client relationship. The court declined to remit the case to the ET for further factual findings.

Background and parties. Pimlico Plumbers Ltd (PP) and its owner Mr Mullins appealed an Employment Tribunal decision that Gary Smith, who worked for PP between 2005 and 2011, was a worker under the ERA and WTR and that his working arrangements met the EA definition of employment. The EAT had earlier upheld the ET. Mr Smith claimed unfair and wrongful dismissal, pay-related claims and disability discrimination.

Nature of the claim and relief sought. Mr Smith sought remedies for unfair/wrongful dismissal, pay during medical suspension, holiday pay, unlawful deductions and discrimination arising from disability.

Issues before the Court of Appeal. The principal issues were: (i) whether the contract obliged Mr Smith personally to perform services or whether he had an unfettered right to substitute; (ii) whether his relationship with PP was a series of separate engagements (self-employed with PP as client) or an umbrella/limb (b) worker relationship; and (iii) whether there was a contractual minimum-hours obligation (the Manual referred to a 40-hour normal working week and evidence suggested a commercial minimum of about 36 hours).

Procedural history. The ET (Employment Judge Corrigan) decided on 16 April 2012 that Mr Smith was not an employee but was a worker and that his working situation met the EA definition of employment. The EAT (HHJ Serota QC) dismissed the employers’ appeal on 21 November 2014. The Court of Appeal heard the appeal on 17–18 January 2017.

Court’s reasoning and disposition. The Court of Appeal held that: (a) the express terms of the 2009 Agreement and Manual required personal performance and did not contain an express right of substitution; (b) the informal practice of operatives swapping or using assistants did not establish an unfettered contractual right to substitute; (c) it was open to the ET to treat the Manual’s minimum-week expectation as part of the contract so that, read in context, cl.2.2 (that the company was under no obligation to offer work and the operative no obligation to accept it) was reconcilable with an obligation to be available for a full working week; and (d) the overall evaluative assessment (control, integration, restrictive covenants and commercial reality) supported the ET’s conclusion that PP was not merely a client of an independent business but that Mr Smith was a limb (b) worker. The Court dismissed the appeal.

Appeal dismissed. The Court of Appeal upheld the ET and EAT conclusions that Mr Smith was a limb (b) worker because the 2009 Agreement and Manual, read in context, required personal performance, there was no contractual unfettered right of substitution, and the contractual and factual matrix (including minimum-hours expectation, control and restrictive covenants) meant PP was not merely a client of a business carried on by Mr Smith.

Employment Tribunal (Employment Judge Corrigan) decision 16 April 2012: found Mr Smith not an employee but a worker and that his working situation met the definition of employment in section 83(2)(a) EA. Employment Appeal Tribunal (HH Judge Serota QC) upheld the ET decision on 21 November 2014 (UKEAT049512DM). Appeal to the Court of Appeal ([2017] EWCA Civ 51) dismissed on 10 February 2017.