Worker. Employee or Independent Contractor?

The Supreme Court is hearing argument in the case brought by Mr Smith against Pimlico Plumbers. The case will provide (I hope) some clear rules on an area of uncertainty: when is someone an employees, when are they a worker and when are they an independent contractor? The three possible statuses are a result of modern trends, in which businesses try to hire folk at the least cost. An independent contractor is the least favourable option for the person being hired. If that is the status then the person being hired is only entitled to the benefits under the contract. The next least favourable option is that of a “worker”. “Workers” are entitled to holiday pay and certain other rights but not the full gamut of rights that an employee enjoys.

This distinction between the three possible statuses becomes important as businesses use the “gig” methodology of relations with those they hire. Usually mini car drivers, Uber drivers and couriers often are hired in the expectation that their status will be that of independent contractors and in the hope that they will not be deemed workers, because as a worker the person hired would end up costing the business more than if they were independent contractors and these days the fashion among businesses is to keep lean and cut out any necessary “fat”.

The gig economy arose from a desire for businesses to keep their hiring costs as low as possible. The Supreme Court’s ruling may well cause many businesses to change their business models, if they decide that Mr Smith was a worker. I expect that the Court will lay down clear rules which lawyers can turn to when it comes to advising clients on this difficult but important area of law.


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