A plumber has won a legal battle for working rights in a Supreme Court ruling expected to have huge ramifications for freelance workers.
Gary Smith had worked solely for Pimlico Plumbers for six years.
Despite being VAT-registered and paying self-employed tax, he was entitled to workers’ rights, the court ruled.
The ruling will be closely read by others with similar disputes, many of whom work for firms in the so-called gig economy.
An employment tribunal was “entitled to conclude” that Mr Smith was a worker, the court ruled.
As a worker Mr Smith would be entitled to employment rights, such as holiday and sick pay.
The Supreme Court ruling means that an employment tribunal can now proceed to examine his action against Pimlico Plumbers as a worker, including a claim that he was unfairly dismissed.
Mr Smith, from Kent, began his battle with Pimlico Plumbers when he wanted to reduce his hours following a heart attack in 2010.
He wanted to cut the five-day week, which he had been signed up to work with the firm, to three.
However, the firm refused and took away his branded van, which he had hired. He claims he was dismissed.
Pimlico Plumbers chief executive Charlie Mullins condemned the ruling.
“This was a poor decision that will potentially leave thousands of companies, employing millions of contractors, wondering if one day soon they will get nasty surprise from a former contractor demanding more money, despite having been paid in full years ago.
“It can only lead to a tsunami of claims,” he added.
TUC General Secretary Frances O’Grady said: “This case has exposed how widely sham self-employment has spread. Bad employers are using every trick in the book to deny staff basic rights.
“It’s time to end the Wild West in the gig economy. The government must get tough on rogue bosses and give unions the right to organise in more workplaces.”