Pimlico Plumbers, the Supreme Court and what it holds for the gig economy

16 Jun 2018

 

When we think of the gig economy, we think of Uber, Deliveroo, Task Rabbit, Wag; smartphone start-ups, technology, algorithms, ‘disruptors’ in their parlance. We don’t tend to think of white van men, and a firm of plumbers set up in 1979 by someone who looks a bit like Rod Stewart.

 

Nonetheless, Wednesday’s Supreme Court decision on the latter is set to have big implications for the former. The UK’s highest court upheld an initial Employment Tribunal decision that held that Gary Smith, who worked as a self-employed plumber for Pimlico Plumbers for six years until 2011, should be classified as a worker, rather than self-employed. Some in the media appear to have got their facts slightly wrong on this, claiming that Mr Smith won full employment rights or the right to be classified as an employee.

 

It’s important to note that worker is a third category in UK employment law, stemming primarily from Section 230(3)(b) of the Employment Rights Act 1996, that provides limited workplace protections such as the National Living Wage, and holiday and sick pay. It tends to apply to less formal employment relationships, such as those of Mr Smith, or, as lower court decisions have previously found, the employment relationships of Uber drivers James Farrar and Yaseen Aslam, CitySprint courier Maggie Dewhurst, or three Addison Lee drivers in September 2017.  

 

And that is what makes this court case so significant. It is the first time the UK’s highest court has weighed in on the central issue of whether those who carry out work for the likes of Uber, Deliveroo, courier firms like CitySprint, and yes, Pimlico Plumbers, are workers or self-employed.

 

Pimlico Plumbers’ Chief Executive Charlie Mullins was quick to argue that this wasn’t about the gig economy, that his firm was nothing like Uber. It was about high-skilled plumbers who earned good money, he said, not minicab drivers at the bottom of Britain’s precarious labour market. Unfortunately, Mr Mullins is wrong, and it’s probably the reason why so many eyes were turned to the Supreme Court Wednesday for a case involving a plumbing company and someone who last worked for them in 2011.       

 

Because ironic as it may seem, Uber and Pimlico Plumbers, companies from separate ages, digital and analogue, are therefore wrapped up in court facing the same questions. Take the issue of control for example.

 

Control, and who has it in an employment relationship, is one of the key tests used by the courts to determine whether someone is a worker or truly self-employed.

 

After all, one of the principle arguments in favour of self-employment, and in fact the justification of many gig platforms for putting those carrying out work for them on self-employed contracts, is that of control, and greater flexibility. If you are self-employed, then the control is yours, you choose when to work, which jobs to take, and how much to charge for them.

 

Instead, what appears to occur in cases like Pimlico Plumbers, is that the person has been registered as self-employed, but lacks that control.

 

In his judgment in Wednesday’s case, Lord Wilson wrote: “[Pimlico Plumbers’] tight control over [Mr Smith] was reflected in its requirements that he should wear the branded Pimlico uniform; drive its branded van, to which Pimlico applied a tracker; carry its identity card; and closely follow the administrative instructions of its control room. The severe terms as to when and how much it was obliged to pay him, on which it relied, betrayed a grip on his economy inconsistent with his being a truly independent contractor.”

 

Control is just one of the tests the courts use, but it is one where you begin to see the parallels between the analogue and the digital. Uber’s legal argument rested on the idea that each of its drivers operated their own individual businesses, and the company acted as its agent to connect its drivers with customers, exercising little, you guessed it, control.

 

The latest tribunal Uber went before rejected that contention. According to the Employment Appeals Tribunal the company faced in November, evidence that Uber warned drivers they should accept at least 80% of trips to retain their account status, and logged drivers off if they declined three trips in a row, suggested that the reality of the relationship was not one of agent and principal.

 

Co-claimant in the case and former Uber driver Yaseen Aslam also told me that drivers had a suggested route provided to them, which they should take at the risk of being fined and had to average 4.4 on Uber’s driver ratings system or could lose their job.

Therefore, bearing in mind Lord Wilson’s words and the evidence highlighted in previous tribunals, Uber will likely have a difficult time overturning lower court decisions and arguing its drivers are self-employed, due to the control it has appeared to exercise over them.

 

As the two court judgments show, Uber and Pimlico Plumbers fundamentally pose the same question; when someone is working, who are they working for? Both judgements rejected the contention that the claimant was working truly for themselves and the company was merely an agent, or a client.

 

It’s not surprising that, once the judgment was delivered, journalists instantly reframed the story to highlight what precedent this could set for future gig economy cases. After all, we love our trends and, as someone from the Resolution Foundation once said to me, the seeming “sexiness” of the technology involved is a big part of that.

 

But while journalists aren’t factually wrong in doing that, what the parallels between Pimlico Plumbers and Uber fundamentally show is that whilst the technology might be new, and sexy, the legal questions aren’t, and the phenomenon of bogus self-employment certainly isn’t.

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