Keep on top of the changing landscape around self-employed individuals.

The independent review into the labour market has started to gather evidence in its fact finding tour of Britain. Its mandate is to investigate whether employment practices are keeping pace with the changing world of work. It will publish its findings in the summer but it seems likely that they will comment on the ability of workers to challenge companies who treat workers as self-employed.

We also have had the judgement published in Pimlico Plumbers Ltd v Gary Smith. It found that Mr Smith had rights as a worker. The case and decision were concerned with the following:

66. In the context of the legislation relevant to this appeal, a distinction is to be drawn between (1) persons employed under a contract of service; (2) persons who are self- employed, carrying on a profession or a business undertaking on their own account, and who enter into contracts with clients or customers to provide work or services for them; and (3) persons who are self-employed and provide their services as part of a profession or business undertaking carried on by someone else: cf. Lady Hale in the Bates van Winkelhof case at [25] and [31]. The persons in (3) fall within section 230(3)(b) of the ERA and regulation 2 of the WTR and their employment falls within the definition of ‘employment’ in section 83(2)(a) of the EA. I shall for convenience refer to them as a ‘limb (b) worker’. The question on this appeal is whether the ET was wrong to decide that Mr Smith was a limb (b) worker rather than falling within category (2).

The case highlights the importance of effective substitution clauses. The agreement had no express term allowing for substitution but plumbers could swap jobs. This was highlighted as allowing for ‘swapping a shift between workers’.

Mr Smith had a contract stating he was in business, could choose when he worked, provided his own tools and equipment but had to use a company logoed van and wear a company logoed uniform and should account for his own tax, which he had.

It was at the tribunal, upheld by the Employment Appeal Tribunal where it was stated that he could claim disability discrimination as a ‘worker’. As highlighted in Para 66 above the worker being a person who undertakes to do or perform work or services for another party to the contract.

If a person is classified as a worker, they have rights that include pension, minimum wage and paid annual leave. Businesses who have individuals working under similar arrangements may wish to assess their current contracts.

Article from ACCA In Practice