A London plumber who claimed he was unfairly dismissed after years of working as a contractor won a court ruling Wednesday giving him employment rights, in a closely watched case testing labor rules in the so-called gig economy.
Britain’s Supreme Court ruled that Gary Smith, who worked for Pimlico Plumbers full-time for six years, was entitled to rights such as sick pay and minimum wage. Smith sought to reduce his hours following a heart attack, while the company argued he wasn’t entitled to such protection because he was a self-employed contractor.
His case will now return to an employment tribunal to sort out his unfair dismissal claim as a “worker.”
The case lays bare the many problems that remain in the ongoing debate about independent contractors in the gig economy, where people work job-to-job with little security and few employment rights.
Some companies have argued that the gig system provides lifestyle benefits for people who want flexibility, but the arrangements also allow companies to avoid many expenses associated with hiring full-time employees.
The timing of this case is interesting, said Sean Nesbitt, a partner at the international law firm of Taylor Wessing, which is not involved in the case.
“It dovetails perfectly with an ongoing government review of employment law,” he said. “This will make it easier for the government to make informed legislative change.”
The ruling comes nearly a year after a major study by study by Matthew Taylor, a former adviser to Tony Blair, concluded that workers in the gig economy — from Uber drivers to delivery cyclists — need greater labor protections.
The Taylor report concluded that a new category of worker, the “dependent contractor,” should be created to secure genuine flexibility for laborers. It also signaled a new norm among the workforce.
By one estimate there are some 1.1 million people in Britain’s gig economy, almost as many as those who work in the National Health Service. A separate 2016 study, by the respected McKinsey Global Institute, suggested that some 26 percent of the U.K. workforce are independent or use independent work to supplement their income, roughly the same percentage as those in the United States.
With the workplace rapidly evolving, businesses are struggling to cope.
Mishcon de Reya employment partner Susannah Kintish, who represented Pimlico Plumbers, said that businesses are awaiting legislation on categorizing their workforces, as existing employment law is “rendered increasingly unfit for purpose.”
“Individuals operating in the gig economy need certainty that they have been categorized correctly, and businesses are equally keen to get this right from the outset, recognizing that doing so is in their own interests,” she said. “Balancing a flexible workforce with the control required to protect a brand will continue to present a significant challenge for businesses, with many likely to be disappointed that this judgment does not plug any legislative gaps.”