Philip Richardson, Head of Employment Law at Stephensons, examines how the recent Pimlico Plumbers ruling will impact the rights of gig economy workers in the future.
The recent decision by the Supreme Court in the case of Pimlico Plumbers vs Smith has been heralded as spelling the end of the gig economy and the casual working arrangements which have proved so controversial in recent times.
While we can expect this business model to be around a bit longer yet, this significant decision has certainly tipped the balance against it for the first time.
Reaction to the court’s decision
In the aftermath of the Pimlico Plumbers case, the court’s decision was hailed in many quarters. The shadow business secretary, Rebecca Long-Bailey, described it as ‘a landmark victory for workers who have had enough of precarious conditions’.
Rebecca Hilsenrath, chief executive of the Equality and Human Rights Commission, said it was ‘one of the biggest decisions ever made by the courts on workers’ rights’.
“Thousands of workers like Gary Smith could now find themselves with the added security of benefits like sick pay and holiday pay,” she said.
And Pimlico Plumbers chief executive Charlie Mullins said it would ‘lead to a tsunami of claims’.
No precedent for future cases
Personally, I think many of these remarks overstate the case. Those looking for a precedent or red line set out within the Supreme Court’s decision will be sorely disappointed.
The Supreme Court justices made it clear that this judgment is very specific to the unique facts of the Pimlico Plumbers case.
They did not lay down any principles or guidance for employers about how to classify workers. So future legal cases will need to be determined on their own specific circumstances, and upcoming cases will continue to be argued on their specific facts.
Employment law is out of date
One of the reasons that we are seeing so many legal cases relating to the gig economy at the moment is because the relevant employment law is out of date.
The Employment Rights Act dates from 1996 and the law around classifying a worker is even older, going back to the 1800s.
The Pimlico Plumbers case is likely to encourage other aggrieved parties to launch their own gig economy court cases.
The world of work has changed immensely in the past few decades and the law has not kept pace with the development of the gig economy.
The judgement on this specific case does little to clear up this uncertainty around employment rights in this sector.
Lower courts could be emboldened
One way the impact of the Pimlico Plumbers case could be felt is by it emboldening the lower courts when they are considering similar cases.
As this is the first time the Supreme Court has adjudicated on a gig economy case, its decision could serve as a very strong endorsement of lower courts’ powers – such as the Court of Appeal – to hand down meaningful binding judgements in future.
For example, the ongoing ‘Uber vs Farrar and Aslam’ case, currently awaiting hearing by the Court of Appeal, could be impacted.
The ‘ride hailing app’ attempted to launch a Supreme Court challenge of its own last year, in defence of its own casual working practices, before being told it had to seek clarification from the Court of Appeal first.
Although cases will be decided on their specific facts, the decision of the Supreme Court could well encourage the lower court to refuse the Uber appeal.
Glare of publicity could prompt more legal cases
The Pimlico Plumbers case is also likely to encourage other aggrieved parties to launch their own gig economy court cases.
We have already seen a succession of legal cases in this field. Last year, a bicycle courier took on courier firm City Sprint at tribunal and won recognition as a worker. Earlier this year, courier firm Addison Lee lost an appeal against a tribunal decision that its couriers were workers and entitled to holiday pay.
The glare of publicity around Mr Smith’s victory at the Supreme court is likely to inspire more unhappy ‘self employed’ contractors to challenge their legal status in this way.
Mounting costs of legal action
Even before the Pimlico Plumbers case reached the Supreme Court, there was already alarm at the frequency with which these cases were coming before tribunals and the courts, with growing calls for a definitive move by government to clarify the law in this area.
It is now more a case of ‘when’ rather than ‘if’ the government legislates to improve the rights of gig economy workers.
It is not practical for every case where there are reasonable uncertainties over employment status to be decided by legal action.
These cases are already causing a costly drain on the resources of the courts and considerable expense to the respective firms themselves. This issue will be amplified if Mr Mullins’ warning of a ‘tsunami of claims’ proves correct.
Renewed pressure on government to legislate
This points to another area where the impact of the Pimlico Plumbers case will be felt. This high-profile case will increase government pressure to legislate to resolve this uncertainty.
It is already considering the implications of the Taylor Review on working practices and has promised to improve conditions for workers.
In the wake of this Supreme Court decision, it is now more a case of ‘when’ rather than ‘if’ the government legislates to improve the rights of gig economy workers.
