Court Of Appeal Reconsiders Test To Determine 'Worker' Status

Co-authored by Richard Harvey, GQ Employment Law

The gig economy is expanding fast.1 Although it brings great benefits, such as flexibility for companies and individuals, it also has generated concerns regarding workplace protections and social inequalities. In the UK, the legal framework for these concerns has been developed through recent high-profile claims from individuals working in the gig economy. These cases have all turned on the individuals' employment status under UK law. On February 10, 2017, in Pimlico Plumbers v. Smith [2017] EWCA Civ 51, the Court of Appeal reconsidered the two-pronged test to determine whether an individual is a worker, for purposes of the statutory protections afforded workers under the law.

In Pimlico Plumbers, the claimant was a plumber who carried out work on a job-by-job or "gig" basis for Pimlico Plumbers, receiving a proportion of the fee charged to the end client. The claimant was fired following a heart attack and initially tried to assert he was an employee, claiming he had had been unfairly dismissed. When this employee status claim was rejected, the claimant asserted that he nonetheless was a worker due to the nature and extent of the control the company exerted over his work.

In the UK, there are three relevant categories of status (i.e., employees, workers, and independent contractors) and the statutory protections afforded the individuals are determined by their status. To be considered a worker under the law, an individual must show that he or she is obliged to perform the work personally, and that the business for which the work is done is not a client or customer of the business carried on by the individual.2

In Pimlico Plumbers v Smith, the Court of Appeal focused on two sets of facts. First, the claimant was able to ask other individuals to help him carry out the tasks. Second, the claimant was required to be available to work a minimum number of hours per week, had to comply with certain standards of conduct and appearance, and was subject to onerous restrictive covenants.

As to the first prong of the test, the Court of Appeal found that because the right of substitution was not unfettered, the claimant had an obligation to perform the work personally. As such, the requirement for personal service was satisfied. As for the second prong of the test, the claimant was closely entwined in the Pimlico Plumber business, working in a subordinate position to the company, such that it could not...