Do you have a locum or a contractor who has been regularly engaged over an extended period of time on a self-employed basis?

If so, you should be interested in the case of Pimlico Plumbers, which has been heard by the Supreme Court earlier this month and follows a series of decisions on employment status concerning gig economy companies such as Uber.

The key question put before the Supreme Court is whether the individual who undertook plumbing work for Pimlico Plumbers was a worker within the meaning of the Employment Rights Act.

The Court of Appeal took note that he drove the company’s van, had to work a minimum amount of hours per week and wore a uniform. However, they also observed that he managed his own tax and national insurance, was VAT registered, supplied his own equipment and could pick what jobs he took on. They held that he was a worker, not self-employed.

We are currently awaiting the judgment of the Supreme Court, but we will keep you up to date with all the developments as they unfold.

Determining employment status

As legislation is so minimal, it has been up to tribunals and courts to determine a person’s employment status. The courts have focused on certain factors, such as level of control, mutuality of obligations, personal service, integration, financial risks, equipment and remuneration. But it remains difficult for individuals and employers to ascertain a person’s employment status and what rights they are entitled to.

Whereas workers have certain basic employment law rights, such as the right to holiday pay and the right to not be discriminated against, the self-employed do not have any real significant employment law rights because it is seen as a commercial arrangement.

This has led to calls for more clarity to determine the boundaries between employees, workers and the self-employed. In response to the Taylor Review published last summer, the government has decided to consult on how to make it easier to ascertain an individual’s employment status and make it clearer for employers to understand what their responsibilities are. In particular, they are seeking views on whether to codify principles from case law into primary legislation.

What does this mean for your business?

It may be time to review your current working arrangements to see whether instead of being self-employed, they are actually a worker or even an employee.

Remember a court will always look behind any label to the true nature of the relationship. They will see if they have a regular pattern of work, whether they can refuse work and send in someone else, are paying own national insurance and tax, are under your control and direction and are treated like other employees.

Employment status is an extremely complex area of law, therefore seek legal advice at the earliest opportunity to avoid expensive mistakes.