Yesterday’s Supreme Court judgment in Pimlico Plumbers v Gary Smith is the latest in a line of cases addressing the increasingly complex issue of employment status. Whilst largely limited to its facts, it does serve as a further reminder to employers that simply labelling individuals “self-employed” or “independent contractors” does not make them so.

Gary Smith was engaged as a plumbing and heating engineer by Pimlico Plumbers. His contract described him as “self-employed”. In some respects, it appeared to reflect this status. It allowed him to engage others to assist him and to bring in an external contractor where he lacked a specialist skill. He also had the right to substitute, although only with another Pimlico operative.

The Supreme Court, however, found that it was reasonable for the Employment Tribunal to conclude Mr Smith in fact held “worker” status, carrying with it rights including holiday pay and discrimination protection.

The Supreme Court judgment highlighted the “tight control” Pimlico had over Mr Smith and pointed to contract terms inconsistent with the purported “self-employed” status, including “wages”, “gross misconduct” and “dismissal”. Recognising the limitations on the right to substitute, it found the wording of the contract was clearly directed to performance by Mr Smith personally and drew attention to requirements that he wear the Pimlico uniform and carry a Pimlico ID card.

Once again, we see the courts’ willingness to look at practical realities to determine that an individual’s employment status differs to that stated in the contract. With this in mind, employers should carefully assess both contract wording and the way individuals provide their services to ensure these accurately reflect classifications.

This, however, is unlikely to be the end of the matter. Given the recent government consultation on employment status, we anticipate further changes “in the pipeline” for atypical workers.

Read the case details here.