The decision is the latest case in a series of rulings that could have major ramifications for the emerging gig economy. The gig economy is an economy in which individual workers are contracted for temporary positions on a short term basis.
In a recent case, the Court of Appeal was asked to consider the employment status of a plumber working for a firm based in London, Pimlico Plumbers Limited. The plumber had exclusively worked for Pimlico between 2005 and 2011, signing a written agreement governing the terms of his work, including his working hours, his uniform and his equipment, and a company van. The plumber was not able to work for anyone else, or himself but could swap assignments with his colleagues at the company. However, the plumber was not paid a fixed wage and filed individual tax returns. After a period of ill health, the plumber asked to cut his working days. The company refused and terminated his employment. The plumber then sued the company, claiming he was dismissed.
The Court found that the plumber was not employed under a traditional contract of employment but was nevertheless a worker and entitled to basic workers rights. The justification for such a finding was that the written agreement made in 2005 consisted of a contract with the plumber personally to work for the company, which made him an employee in the wider sense. While the plumber had autonomy to choose the jobs he did and the prices charged, in most other respects he was restricted in what he could do by the agreement with the company. Therefore according to the Court, he was a worker and entitled to basic workers rights such as the national minimum wage, sick pay and paid holiday.
The impact of the decision could be significant, as the freelance sector may now be forced to provide more clarity about what obligations its workers are under whilst providing services for them. The decision may also affect other sectors such as locums, who traditionally work for a larger company through a recruitment agency for a short period of time, on a time worked basis. The Government has recently commissioned a review of modern working practices and workers rights in the gig economy. It is therefore clear that this issue will remain at the forefront of employment law for some time to come.