Phil Pepper comments on Pimlico Plumbing ruling regarding self-employed workers' rights
Commenting on the decision by the Court of Appeal to dismiss the appeal made by Pimlico Plumbing, and that despite being self-employed, Gary Smith was entitled to workers’ rights, Phil Pepper, employment partner, said:
“The case brought by Mr Smith against Pimlico Plumbers is an interesting one and further evidences that employers need to be crystal clear in their contracts of employment. Although the workforce was classed as self-employed, there was a requirement to wear company uniforms, drive company vehicles and a stipulation of a minimum working week of 40 hours.
“In theory, the business model adopted by Pimlico Plumbers offers flexibility to both the employer and employee. However, employment practices cannot be left unregulated and rights of workers and employees cannot be ignored unless businesses are willing and ready to face the backlash of legal and reputational repercussions. It is stark reality that the application of employment rights will often mean that companies are unable to adopt the agility needed to support their success.
“Regardless of the business structure, having a solid approach in relation to employment rights is crucial. Failing to comply with such regulations will not only result in penalties – it can impact brand reputation hugely.
“Employers are often surprised that employment status can change over time and discrepancies between contractual terms and what working practices are like in reality can open them up to liabilities. Companies must be alert to these changes, assess the risks and make an informed decision to act or ignore.
“To identify, assess and avoid risks associated with the use of self-employed individuals in future, all employers need to check that they are keeping robust records for all individuals that are kept up-to-date and that such records detail information such as regularity of work patterns, and substitution.
“Ideally employers need to be open and honest about the relationship they want to establish with each individual worker from the outset and make sure the correct agreement is struck at the start and maintained, and assessed appropriately.”
“If employers choose to ignore the reality of the relationship and accept the risk, then they should do so with full knowledge of the implications.”