What does the latest Smith v Pimlico Plumbers decision mean?

Long-running employment status case returns to the employment tribunal.

Smith v Pimlico Plumbers was the ‘employment status’ case that went all the way to the Supreme Court in 2018. Legal proceedings were commenced in this case seven years ago, following the termination of a ‘self-employed operative’ arrangement between Pimlico Plumbers and an engineer. The engineer brought claims alleging he had been unfairly dismissed and had not received holiday pay, amongst others.

The first hurdle for the engineer to meet was proving that he was not ‘self-employed’ but was, in fact, either a worker or an employee. The initial employment tribunal, and on appeal at every stage up to and including the Supreme Court, it was determined that the engineer was a worker providing his services personally to the organisation. The lack of an obligation on the organisation to provide him with work meant that he was not regarded as an employee.

In order to determine the next stages of his claim, i.e. how much compensation he was entitled to, the case was sent back down to the employment tribunal to hear the further issues. Turning to the holiday pay claim, the last period of unpaid holiday taken by the worker ended on 4 January 2011 but it was found that he failed to bring a tribunal claim until after the arrangement was terminated on 3 May 2011. The tribunal applied the normal three-month time limit that applies to claimants bringing a claim following the unlawful act and judged that the claimant should have lodged his claim no later than 3 April 2011. As the time limit had not been complied with, the tribunal dismissed the holiday pay claim meaning the worker was not entitled to compensation for unpaid holiday taken throughout the engagement. Smith has announced that he intends to appeal this decision to the Employment Appeal Tribunal.

Although this case caused widespread attention due to the issue of determining employment status when an individual is wrongly classified as self-employed, in the latest hearing the employment tribunal has applied longstanding principles when deciding the relevance of the holiday pay claim. There are question marks over whether it can be as clear cut as this in cases where status is unknown. For example, Smith is alleging that the time limits should not apply as he did not know he was a worker so was unaware his holiday should have been paid in order to bring a claim within the relevant time limit. Whether this argument will have much success on appeal remains to be seen.

For now, the decision appears to be a reminder of the time limit requirements for claimants to submit their tribunal claim. Organisations need to be aware that there are certain circumstances where the limit can be extended however, and are reminded of the importance of taking steps to proactively review the status and applicable rights afforded to their workforce.

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