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Employed, Self Employed or Something Else?

Sarah Hamilton - June 29th, 2018

You may have read of the case in The Supreme Court in June 2018 in which Pimlico Plumbers (founded by entrepreneur Charlie Mullins) lost a legal battle brought by Gary Smith over Rights of Workers.

The Supreme Court upheld the view of lower courts that Mr Smith was a “worker” and therefore entitled to basic employment rights such as protection from discrimination and holiday pay. This case may have some ramification for the face of the “gig economy” although each case (e.g. Uber, Deliveroo, Hermes) will be unique and determined separately.

During his 6 years working for Pimlico Plumbers Mr Smith’s title was “self-employed operative”. Mr Smith issued invoices, provided his own tools, took personal liability for the work he did, had his own professional indemnity insurance, and was VAT registered – all factors which traditionally would point towards self-employment.

However, whilst he did not have to accept work from Pimlico, Mr Smith was required to notify them on days when he was unavailable and was required to work a minimum number of hours per week. There was also a high degree of control exercised over Mr Smith by Pimlico as well as restrictive covenants that Pimlico expected Mr Smith to be bound by after their agreement ended. Mr Smith wore a branded uniform, had a tracker in his branded van and carried an identity card.

Just because a person is called self-employed, the legal position may be different. An “in between” category of “workers” could lead to a high financial liability on businesses that haven’t paid their contractors holiday pay.

Each case will be determined on its own facts, but “workers” may be entitled to rights including:-

  • The statutory minimum level of paid holiday
  • Entitlement to the National Minimum Wage
  • Entitlement to sick pay, maternity pay, paternity pay
  • Protection against unlawful deductions from wages
  • The statutory minimum length of rest breaks under the Working Time Regulations; to not work more than 48 hours on average per week or to opt out of this right if they choose
  • Protection against unlawful discrimination
  • Protection for whistleblowing
  • To not be treated less favourably if working part-time

However, we are aware that the Government are currently actively consulting on this issue and it is therefore distinctly possible that there could be new legislation in the next few months which will hopefully reduce uncertainty faced by businesses and workers.

Charlie Mullins is considering taking an appeal against the decision to the European Courts of Human Rights in Strasbourg.

In view of the present uncertainties and the potential implications of this decision, we recommend that you seek professional advice if you think it may be relevant to your business.

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