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Employment partners rue ‘conservative’ Supreme Court judgment in highly-anticipated gig economy case

A Supreme Court decision which was expected to have significant ramifications for the ‘gig economy’ has disappointed employment partners who hoped the ruling would move questions around workers’ rights further forward.

The Supreme Court today (13 June) unanimously ruled in favour of heating engineer Gary Smith in his claim against Pimlico Plumbers, establishing that he was a ‘worker’ and not self-employed. This meant he was entitled to certain employment rights such as holiday pay, although not wider rights given to full-time staff.

The ruling, handed down by Supreme Court president Lady Hale alongside Lady Black and Lords Wilson, Hughes and Lloyd-Jones, was closely-watched by employment lawyers as it was seen to have wide implications for a range of workers in what has become known as the ‘gig economy’.

Taylor Wessing employment partner Sean Nesbitt said the judgment would be of major interest to Uber, with the ride-sharing company fighting a similar case. He described the Pimlico judgment as ‘conservative’, but said it was still helpful guidance. ‘Conservative judgments tend to produce more certainty.’

Luke Bowery, employment partner at Burges Salmon, added: ‘It’s a largely fact-sensitive decision. The Supreme Court found that the original employment tribunal was entitled to find that he was a worker and didn’t therefore look in great detail at the various tests for worker status. In that sense it doesn’t move us that much further forward.’

Mishcon de Reya has been advising Pimlico on the case since 2011, led by employment partner Susannah Kintish. Kintish predictably played down the decision, telling Legal Business: ‘They very much limited their decision to the facts of the case. It’s a wasted opportunity. We’ve ended up with this middle ground where Gary is not self-employed or an employee. It’s really disappointing that individuals can’t apply any principles or have any strong guiding hands in future employment claims.’

Blake Morgan employment partner Matthew Smith, however, described the case as the leading authority for determining the employment status of ‘gig economy’ workers. He commented: ‘The case will have significant cost implications for organisations in a number of sectors where people have been treated as contractors rather than workers but the decision will be welcomed by many thousands of people who have been missing out on key employment rights because they are classed as self-employed when, in reality, they are workers or employees.’

The claim dates back to August 2011, when Smith brought an employment tribunal action against Pimlico, alleging that he had not been paid for a period of statutory annual leave among other grievances.  The tribunal ruled at the time that Smith was a ‘worker’ under the Employment Rights Act 1996 and could therefore legitimately proceed with claims against Pimlico. The plumbing business however appealed to an appeal tribunal before moving upwards to the Court of Appeal and then to the Supreme Court.

Mishcon instructed Matrix Chambers’ Thomas Linden QC and Devereux Chambers’ Akash Nawbatt QC. Smith was represented by TMP Solicitors, which instructed Matrix Chambers’ Karon Monaghan QC and 1MCB Chambers’ David Stephenson.