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Employment Status Update

The Department for Business, Innovation and Skills has published its Employment Status Review

The review sets out the current system of employment status, considers the position of some atypical workers, and then examines the future and possible reforms (without making any recommendations). As it says in the executive summary: "There are a number of options presented but most are highly complicated, would take years to deliver and could create new issues of their own."

The Taylor Review, expected to be a little more proactive, is due to be published later this year.

The Court of Appeal hands down its judgment in Pimlico Plumbers & Charlie Mullins v Gary Smith

The Court of Appeal has dismissed an appeal by Pimlico Plumbers by upholding that plumber Gary Smith is a worker rather than a self-employed contractor, entitling him to workers’ rights. The decision is the latest to side with workers in a flexible workforce.

This is a fact sensitive case, and the judgment considers in detail the evidence and contractual documentation that Mr Smith worked under when at Pimlico Plumbers. Mr Smith was VAT-registered and paying tax on a self-employed basis but worked solely for Pimlico Plumbers for six years.

After suffering a heart attack in 2010 Mr Smith wanted to cut the amount of days he worked from five-days a week to three. However, the firm refused and took away his branded van which he had hired.

Mr Smith argued that he was entitled to basic workers' rights - which would include the national minimum wage and paid holiday and the ability to bring discrimination claims.

The Master of the Rolls said: "This case puts a spotlight on a business model under which operatives are intended to appear to clients of the business as working for the business, but at the same time the business itself seeks to maintain that... there is a legal relationship of... independent contractor rather than employer and employee or worker."

This is the highest court to consider such a case and the ruling will now be closely read by others with similar disputes, many of whom will work for businesses in the so-called "gig" economy such as Uber drivers. It is likely to be a leading case on employment status in future years. 

This bulletin is for general guidance purposes only and should not be used for any other purpose.

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