Pimlico Plumbers Decision in UK Narrows Boundaries of Gig Economy – or Does It ?

The UK Supreme Court ruled this week that an ‘independent plumber’ suing for worker rights protection in the UK under the labor laws  in view of his contract termination was, in essence, a de facto employee of Pimlico, a provider of plumbing services,  and was entitled to such status and protection in view of the facts of the particular case.

As we explored recently in our June 5 Gig Economy webinar as part of our LinkedIn Global Labor and Employment Law Forum, there has been a proliferation in the use of independent contractors across a variety of industries due to flexible staffing  needs of the companies as well as  the desires of professionals or other workers to be independent and choose their work times and conditions, leading to a schism between current law in many countries and the needs of modern economies and individuals for flexible working arrangements. 

This can be seen more particularly as a battle between traditional protection of employees (and the governments’ need for tax revenues including social taxes) and the right of the individual to be a true independent contractor if he or she wishes – and if the person is treated as such. 

In Pimlico the case came down to whether the facts on the ground demonstrated that the ‘independent’ plumber operated as and was treated as an independent or rather than as an on-call employee under the predominant control and constraint of the plumbing company, thus being classified as a ‘worker’, a separate category of protected employee under UK law where basic protections still extend even if not full time. There were, as always in these cases,  facts in favor of both sides, however, on balance the ‘all facts and circumstances’ review came down clearly in favor of the contractor suing for protection of worker status. 

Does Pimlico change the law ? We do not see this case as making new law and indeed the judgment was limited to the facts of the case. 

Indeed the test in almost all countries worldwide  as to whether an independent contractor can be classified as an employee remains what we call the ‘duck test’ : if it acts like a duck, squawks like a duck, is treated like a duck and looks like a duck, then it’s a duck (i.e., an employee is one who is treated, fits into an organization, behaves and is fed (paid) like an employee is likely an employee subject to an ‘all facts’ analysis of course). 

Carefully prepared contracts in this area will not usually protect companies either as substance always governs form in these cases, risks which companies (such as  Pimlico apparently) are taking on a regular basis. 

We see Pimlico instead leading  – at least in the UK – to a new group of cases seeking to define what patterns of activity result in employment status vs. the mantle of truly independent work-  including ‘gigs’ in the Gig Economy. All companies using independents will be watching carefully including headline companies such as Uber.  

You can read the Supreme Court Press Summary and download and save the Pimlico decision here.  An interesting legal press take on the decision in the (UK) Guardian can be seen here. 

For LinkedIn members who are not yet members of our Global Labor and Employment Forum,  you can write us at inquire@transatlanticlaw.com and we will send you the link to join our Forum, which provides a confidential benchmarking forum for global and growing businesses and also provides interesting updates on global labor and employment law on a regular basis.  

By Erik D Lazar, Director and Founder, Transatlantic Law international

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