Pimlico Plumbers and the gig economy dispute
Peter Crush, September 18, 2019
Charlie Mullins speaks exclusively to HR magazine about his eight-year legal battle, and how he feels about the gig economy
“It was all a farce, but it’s over. Finished. Now it’s time to get on with our lives.” Charlie Mullins, a self-made millionaire and the CEO of London’s largest independent plumbing brand Pimlico Plumbers, is almost casual in his dismissal of ‘it’.
The it he refers to is an eight-year tribunal saga (at personal cost of £300,000) that left him livid on the steps of the High Court, angrily mouthing “the judges have bottled it”. Can this really be the same man who, only a year earlier, said he was “disgusted” at the approach judges were taking and who also claimed “current employment law is not fit for purpose”?
“Honestly, there really is no animosity,” he continues. “The whole case happened because of poor legal advice, and a lot of no-win-no-fee lawyers spotted a loophole they wanted to exploit. But I’m just glad we won.”
But hang on a minute. Won? Now might be a good time to rewind…
Few HR professionals will be oblivious to Pimlico Plumbers and its elongated legal battle with contractor engineer Gary Smith. Mullins dismissed Smith in 2011 after talks broke down when he requested wanting to work fewer days following a heart attack.
Long before the phrase ‘gig economy’ had been coined, what began as a disability discrimination case metamorphosed into a protracted and (for Mullins) bitter point of principle about what constitutes a ‘worker’. Smith could only proceed with his unfair dismissal claim if he could prove he was a worker and eligible for the employment protections he claimed were being contravened.
Mullins insisted Smith knowingly signed up as a self-employed contractor – a tax-beneficial status that clearly set out that he did not qualify for holiday pay or other worker rights. Cue a veritable battle royale, with Smith’s legal tab paid for by the Equality and Human Rights Commission. Judges argued Smith could be categorised as a worker – not just under the 1998 Working Time Regulations and 2010 Equality Act, but because the hours he had to work, the uniform he had to wear, and the van he was provided with created ‘a degree of obligation’.
But Mullins appealed this worker status at every turn. He lost each time and was eventually ruled against by the Supreme Court in June 2018. The case has been used as a precedent for other gig cases, including defeats for Uber and Deliveroo (still under appeal). So why does Mullins think he’s won?
Timing is perhaps everything. When HR magazine speaks exclusively to Mullins the saga has only just ended. It’s just over a week since a hearing in a small, non-descript tribunal room in Croydon brought finality to Smith’s case. No national media, no fanfare… just a verdict concluding that even as a worker there was no failure in Pimlico Plumbers’ duty to adjust Smith’s working patterns, and that he suffered no discrimination. Despite emerging victorious in regards to being categorised a worker, Smith lost the original case he brought against Mullins all those years ago.
“I’m glad we didn’t give in,” says Mullins. “We didn’t sack him because he had a heart attack. He and his lawyers just spotted a big pay day... Things just escalated.”
Mullins is clearly feeling vindicated. Technically he has won. The allegation the whole sorry affair started with has been dismissed – and ironically in March 2019 Smith lost again. His £74,000 claim for unpaid holiday entitlement (a claim he could pursue as a result of being awarded ‘worker’ status) was rejected because he’d left pursuing it for too long.
“He wins a right to claim on a technicality; now he loses it on one too,” Mullins says with a smile, rather enjoying the irony.
But there’s plenty who’d say it is Mullins who’s in denial and that he clearly lost – to the benefit of many across the UK. Smith’s lasting legacy, many would argue, is one of protection for those routinely “exploited” by the “peddling of bogus self-employment by those who avoid the obligations they have to their workforce” – words Labour MP Frank Field used in his review of the “rampant injustices” of the gig economy earlier this year.
Putting this to Mullins immediately touches a nerve, and he absolutely rejects the judgement that the people he employs are workers.
“We do nothing wrong, and people that work here know it,” claims Mullins. “The law must be clarified. For six years Smith worked for us happily under the terms of the contract he signed. In the past two or three years with us he earned £0.5 million.”
He continues: “He understood this. He did his own self-assessment and benefited from being able to claim part of his home as an office, and by paying his wife to be his secretary to reduce his tax bill. But as soon as being self-employed didn’t suit him anymore he decided to claim against us.
“How can someone suddenly be called a worker just because they wear a uniform? We were deemed to exert some form of control over him but we have a promise to customers to complete jobs fully. Customers can’t be expected to have a job left half finished just because the plumber’s got a private job to go to elsewhere.”
Mullins does enjoy a degree of support. In barrister Darren Newman’s view the case has always been a “damp squib”, which he says “has nothing to do with the gig economy”. He adds: “Pimlico Plumbers provides reliable, regular and well-paid work to its plumbers. True gig economy cases tend to turn on whether there is any obligation to provide work at all. The disappointing aspect of this decision is that the court has not moved the law on – or even clarified how it works.”
The case clearly dragged Mullins into unexpected territory. The sense is that he was almost forced into defending his view
– as a point of principle – even though (by the end) he knew the tide was against him. “Even before the Supreme Court appeal lawyers were telling me I had a 70:30 chance of losing,” he confides. “But we couldn’t back down.”
That he still believes he is right will irk many. Others might argue the joke has spectacularly misfired on him. Mullins is a staunch Remainer, famously hanging his ‘Boll*cks To Brexit’ sign about his head office. And yet he has very publicly fallen foul of EU law.
But even the government – which is still reviewing the self-employed market – is arguably stumped on how to proceed. It’s toyed with various terms such as ‘dependent contractor’. But Mullins rejects this, saying “our guys aren’t dependent on working for us”.
Mullins’ preference is for ‘self-employed contractor’ status. He says he has – despite the Supreme Court ruling – rewritten employment contracts to be more “watertight” (the details of which he prefers not to give). But there is a sense that for all his initial nonchalance about the Smith case, it has left him wounded and slightly less confident about employee relations.
“We’ve updated everyone’s contracts, but we won’t know how watertight they really are until they’re tested,” he says. “It’s only when things go wrong that people try it on.”
Smith is apparently set to appeal the decision preventing him claiming backdated holiday pay. Meanwhile Mullins hasn’t quite finished with Smith either. “We’re going to pursue him for costs,” he announces. “I think we – as business leaders – need to send a clear message that people can’t just do this, just because they’ve fallen on hard times.”
It’s worth noting that Mullins previously supported legislation forcing employees to pay tribunal costs up front when launching claims – to prevent so-called vexatious tribunals. He was highly critical when this was overturned by the Supreme Court in 2017.
Businesses as well as individuals need certain crucial protections to thrive, concludes Mullins. “Plenty of other SMEs could have gone out of business with a case like his,” he says.
“It’ll probably bankrupt [Smith]. But it’s something we need to do – to say to lawyers that exploiting holes is a mockery that we just won’t put up with.”
This piece appeared in the September print issue. Subscribe today to have all our latest articles delivered right to your desk