The Supreme Court has upheld an employment tribunal’s decision that a plumber was a limb (b) worker.

limb (b)

The individual, in this case, worked as a plumber for a company before it terminated the relationship after he suffered a heart attack. He subsequently brought claims for unfair dismissal, wrongful dismissal, pay during medical suspension, holiday pay, unlawful deductions from wages and disability discrimination.

The tribunal had to consider whether he was an employee or a limb (b) worker or employee.

The contractual documentation, amongst other things, stated that he:

  • Was an independent contractor, in business on his own account (something he agreed to when giving evidence)
  • Was not under any obligation to accept work and the company was not obliged to offer him any work, although a separate provision stated that he should complete a minimum of 40 hours a week. He agreed in evidence that he could reject work.
  • Had to drive a company branded van (which had a tracker in it), wear the company’s uniform, and carry a company identity card.
  • Had to provide his own materials and tools.
  • Bore a significant proportion of the commercial risk. For example, if a customer didn’t pay he wouldn’t be paid and he was responsible for taking out liability insurance.
  • Was subject to restrictive covenants, including one that, in effect, prevented him from being a plumber in the Greater London area for three months following termination.

 

He was registered for VAT, submitted invoices to the company and filed tax returns on the basis that he was self-employed.

There was no express right of substitution in the contractual documentation, although in practice plumbers working for the company could swap assignments between themselves. Also, he was permitted to bring in external contractors for specialist jobs for which he, or other plumbers working for the company, did not have the necessary skills, as long as he obtained the company’s consent to do so.

Plumber had limb (b) worker status

The tribunal ruled that he did not have employment status but did have limb (b) worker status. The company unsuccessfully appealed to the EAT and the Court of Appeal before appealing to the Supreme Court.

Dismissing the appeal, the Supreme Court said that in relation to personal service, the question as was his right to substitute another of the company’s plumbers inconsistent with an obligation of personal performance? In order to answer the question, the court held that it was helpful to assess the significance of his right of substitution by reference to whether the dominant feature of the contract remained personal performance on his part, although stressing that this did not supplant the statutory test. The court stated that the right to substitute was regarded as so insignificant as to not be worthy of recognition in his contract. His written contractual terms were clearly directed to performance by him personally: for example, they referred to “your skills”, to a warranty that “you will be competent to perform the work”, and to a requirement of a high standard of conduct and appearance. The employment tribunal had been entitled to find that the dominant feature of the contract was an obligation of personal performance. The limitation of the facility to appoint a substitute was significant: the substitute had to be a company plumber bound to the company by an identical suite of heavy obligations.

As to whether the company was a client or customer of his, the Court agreed with the tribunal’s findings that the company had a contractual obligation to offer work to him, but only if it was available. His contractual obligation was to keep himself available to work up to 40 hours on five days each week on such assignments as the company might offer him, without prejudice to his entitlement to decline a particular assignment. The court characterised the above arrangements as an umbrella contract.  The Court said that the evidence also showed that the company exercised tight control over him and considered that the overall picture clearly pointed away from him being a truly independent contractor. It highlighted the uniform, ID card and branded van requirements as well as the “severe” terms about when and how much the company was obliged to pay him. It also mentioned the restrictive covenants in this regard.

Case reference: Pimlico Plumbers Limited and Mullins v Smith