17th February 2017

Greater protection for self-employed contractors

There may be greater protection for thousands of independent contractors working as self-employed contractors following a recent decision of the Court of Appeal.

A plumber on a self-employed contract has been classed as a worker with rights including paid holiday, sick pay, national minimum wage protection and protection from discrimination.

The plumber was hired by a big firm of plumbers for five and a half years. The firm dismissed him following a heart attack and the plumber brought a claim that he was an employee or worker. He had a contract which stated he was self-employed, could refuse work, he was registered for VAT, he submitted invoices to the firm for payment and he filed tax returns on the basis he was self-employed. In spite of all these elements it was found that he was required to personally provide a service to the firm and he has been successful in establishing a worker status. This means he will be pursuing his claims for disability discrimination, holiday pay, sick pay and unauthorised deductions from wages.

Each situation depends very much on its own facts but sends a warning to firms that consistently hire individuals as self-employed contractors. They may do so for legitimate business reasons but may well end up being required to pay holiday pay, sick pay, pension entitlements and protect the individual from any form of discrimination.

It is advisable to take full advice on employment law whether you are a firm or individual contracting another on a self-employed basis or whether you are an individual who is hired to perform work or services personally.

(Pimlico Plumbers Ltd and Mullins v Smith [2017] EWCA Civ 51.)