A British Plumber May Show Uber the Future of Employment (bloomberg.com)

A British plumber may show Uber the future of employment. From a report: The U.K.'s top judges ruled Wednesday that Pimlico Plumbers Ltd. should've treated one of its tradesman as a "worker," giving him the right to vacation pay and to sue the company in a decision that could have ramifications for other gig economy lawsuits. Supreme Court judges found that plumber Gary Smith, who worked for London-based Pimlico Plumbers between August 2005 and April 2011, wasn't self-employed or a client of the firm, giving him the right to sue the company under discrimination laws.

"This is one of the most significant employment status decisions we have seen in the last five years," said James Murray, an employment lawyer at Kingsley Napley in London. Uber and other app-based firms will be watching the ruling with interest as they face similar legal challenges over the way they treat employees. Uber's appeal of a decision granting its drivers benefits including overtime and paid vacation is scheduled to be heard by another court October 30. Meanwhile Deliveroo, the food-delivery service, is currently battling the IWGB union over its riders' employment status and in May, taxi service Addison Lee lost an appeal over whether drivers were independent contractors or employees with rights to benefits.

Comments

So what about his National Insurance?

[MancunianMaskMan]

If he wasn't self employed, he should have payed a higher rate of NI (for all you non-UK people: in the UK, income tax is split in a weird way into 2 pieces: i) income tax and ii) Natonal Insurance (NI). NI is not payed by pensioners, and a lower rate applies to the self-employed). I wonder if he's due a tax bill.

Re:So what about his National Insurance?

[demon driver]

This being 2018, I could very easily imagine governments demanding something like that, but perhaps as the culprit wasn't the worker but the company it would rather be fair that the company would have to repay him so that his net wages, after paying that tax bill, would equal what he had earned being self-employed?

Re:So what about his National Insurance?

[cardpuncher]

The court decided he was a "worker" - that's an intermediate category between being employed and self-employed. You'd think the categories would be aligned for the purposes of employment law and tax law, but that would be too easy...

HMRC are coming after people who were operating through service companies (and paid themselves mostly in dividends therefore avoiding NI altogether). but self-employed people now pay a substantially similar level of NI to the employed for the services they receive (given that they don't get unemployment benefit, for example) so there would be little benefit in trying to make a case.

Re:So what about his National Insurance?

[JaredOfEuropa]

This has been the subject of much debate and law-making in the Netherlands. The issue isn't new, and better believe that someone will pay this tax.


Not long ago, legistlaters thought the VAR system was needlessly burdensome, and changed it so that self-employed and their clients had to enter into a pre-approved "model agreement". No one understood this system; some large companies (typically the worst offenders such as Deliveroo) got their model agreements stamped, the rest simply stopped hiring freelancers except through payroll companies (who are just highly expensive middlemen). This went on for the better part of 2016, until the new law was suspended. It still is, and they are still debating on where to draw the line between self-employment and employment.

Re:So what about his National Insurance?

[JaredOfEuropa]

./ ate a paragraph there:

This has been the subject of much debate and law-making in the Netherlands. The issue isn't new, and better believe that someone will pay this tax.

In the old days, self-employed people did pay the national insurance tax without actually being covered. Then, the tax was repealed, but if the Revenue Service ruled that your work constitued employment rather than self-employment, you still had to pay (and were retroactively covered). Most freelancers were fine with this as they were in the best position to assess how much of a risk this actually was. But some thought this to be "unfair" and the law shifted the burden to the freelancers' clients. Still not a big deal, clients were ok with this if you could show a VAR, an individual ruling on the nature of your worker status, issued by the Revenue Service.

Not long ago, legistlaters thought the VAR system was needlessly burdensome, and changed it so that self-employed and their clients had to enter into a pre-approved "model agreement". No one understands this system; some large companies (typically the worst offenders such as Deliveroo) got their model agreements stamped and carried on with the practices that started this whole debate in the first place; the rest more or less completely stopped hiring freelancers except through payroll companies (who are just highly expensive middlemen). This went on for the better part of 2016, until the new law was suspended. It still is, and they are still debating on where to draw the line between self-employment and employment.

Re:So what about his National Insurance?

[Anonymous Coward]

Depends how much he earned; his employer would certainly be on the hook for a bill. Assuming the median wage of about 24k a year:

EMPLOYEE:
Gross Income: £24k (Employer also pays £2k in NI)
Income Tax: £2.5k (20% of above £12k)
Employee NI: £1.9 (12% Class 1 NI above £8k)
Total tax paid: 6.4
Employee Net: 19.6

CONTRACTOR:
Gross income: £24k ("Customer" pays no NI)
Income Tax: £2.5k (20% of above £12k)
Employee NI: £2 (9% Class 4 NI above £8k, plus £150 in Class 2 NI)
Total Tax Paid: £4,5k
Employee Net: £19.5k

Of course plumbers probably earn a bit more than average, so the influence of Class 2 NIs is relatively less, but it's likely pretty minor compared to how he's getting screwed out of holiday pay (5.6 weeks per year minimum), sick pay etc.

Re: So what about his National Insurance?

[FilmedInNoir]

It does sound familiar, a homeless junkie was screaming something similar to what you wrote at a fire hydrant last night.

Re:So what about his National Insurance?

[JonnyCalcutta]

Or...thank God for the guy that's prepared to stand up for what is right, despite the personal cost should they lose.

This isn't about contracting on its own (which is still 100% allowable), this is about using contracting as a scam to avoid paying the full costs of employing someone. I actually think this is more cut and dried than e.g.. Uber, because these guys supplied him with his tools, uniform, van, jobs and demanded a minimum number of hours worked - that's pretty much employment where I come from.

Re:So what about his National Insurance?

[john.r.strohm]

Perhaps.

However, in this particular case, the asshole was not the worker, but rather the management.

The guy had a very serious health episode, was in hospital, went home, and asked the company to let him cut back on his hours while he recovered. This was an eminently reasonable request, under the circumstances, and a reasonable manager would not have hesitated for a moment before granting it.

However, Pimlico Plumbers was not a reasonable manager. Instead of allowing him to cut back on his hours, and continue recovering, Pimlico "fired" him and demanded he return the mandatory company uniforms and company truck.

He then sued, with the results everyone has seen.

TL;DR: Pimlico shot themselves in the foot.

Except it probably won't...

[overnight_failure]

Depends which lawyers you speak to I guess. How about this opinion from another employment lawyer:

Alan Lewis, employment partner at law firm Irwin Mitchell said the decision was not a "game changer" and that cases would continue to be argued on their specific facts and, for businesses that rely on self employed contracts, that means further uncertainty.

"This decision is not necessarily a win for 'gig economy' workers seeking to challenge their employment status."

Pimlico Plumbers does "not operate a gig model and the implications for Uber, City Sprint, Deliveroo etc may be limited, although the publicity around this case may encourage other 'self employed' contractors to challenge their legal status," added Mr Lewis.

Source: https://www.bbc.co.uk/news/bus...

Re:Except it probably won't...

[Sique]

I don't know for the UK, but in other countries, the question of self employment or not depends on who is your largest customer, and if this customer demands priority services or other exclusivity, limiting your ability to search for other contracts. If your ability to independently decide which assignment to take is severly limited by your largest customer, and your income strongly depends on his jobs, then you are in fact employed and not a free agent.

Re:Except it probably won't...

[SillyBrit]

Exactly, it's down to the facts. In such 'self employed' arrangements it comes down to what contracts were in place and questions such as what freedom the worker has to send someone else etc to determine whether they should be classed as truly self employed or not.

Re:Except it probably won't...

[mikael]

For the UK, HMRC look to see whether an individual is an "employee in disguise". Do they work at the customers premises. Does the company provide tools. Does the individual work his own hours? Does the individual service multiple clients?

In this case, the plumbing company provided the van, the tools and customer bookings, plus require the individual works a minimum number of hours.

Re:Except it probably won't...

[AmiMoJo]

That's basically how it is here. If Uber assigns you work, tells you where to go and when, sets your fares and monitors your performance then they are your employer.

Pimlico plumbers? really?

[serviscope_minor]

The main thing I knew about Pimlico plumbers is they have the most incredible Christmas decorations which you can see from the Waterloo mainline (left hand side as you're leaving London).

Shame to hear that they've been a bunch of wankers.

Re:Pimlico plumbers? really?

[MrKaos]

Shame to hear that they've been a bunch of wankers.

Is it possible they are being cunts?

If it looks like a duck, and quacks like a duck...

[ConfusedVorlon]

Key facts in this case
- He had to work 5 days a week for a minimum of 40 hours
- He had to wear the company uniform and drive a company-logo van
- He couldn't send someone else to do the work (substitution) (although under limited circumstances a different pimlico employee could do work)
- There were significant limitations on his ability to work for other people or competitors

the courts basically looked at this and said; Yup - he looks an awful lot like an employee rather than an independent self-employed person.

More generally, the way the contract was written shows that Pimlico were trying to present to customers that the plumbers were employees, whilst making the plumbers not employees so that they could limit tax and avoid certain obligations. The UK courts are getting increasingly vociferous in saying that this is not ok.

http://www.bailii.org/uk/cases...

Of course.

[tlambert]

Contractors get no respect in California. We work side by side employees, but get none of their benefits.

If they did not treat you substantially differently -- cubicles instead of offices, no free food, no company events, etc. -- the California Department Of Labor would reclassify you as employees.

In effect, the California Department Of Labor demands that the company you contract for essentially treat you like shit, and if they don't, the punish the company.

Re:I keep pointing out that Uber could fix this.

[jabuzz]

Yeah that won't work in the UK. The government became wise to that years ago.

Uber PTO

[Daralantan]

I've seen several things criticizing Uber for not having PTO, benefits, etc. I've always wondered exactly how people want that treated. Do they mean that for every single person at Uber? Or does it require 30+ hours a week every week of the year? Because I know several Uber drivers just do it 1-2 days a week, sometimes they take a break, etc. How would PTO work out for someone who just does 3-6 hours a week? Benefits, etc? Would it be a situation where Uber would have to make them employees once they hit a certain requirement? And then after that, would they be required to make those hours every week unless they had PTO approved?

.

Most anyone I've known that does Uber only did it for a little extra income. I was surprised to find there were people that used it as a main source of income.

Re:Uber PTO

[PPH]

This would prompt employers to hire fewer employees and work them full time. To keep the benefits cost down. This is good if you want to be an employee, but bad if you wanted short hours, flexible work.

Thought this would take a different turn

[TJHook3r]

British plumbers are notorious for high prices and bum cleavage. I'm hoping that Uber don't adopt either of those!

Re:Thought this would take a different turn

[KiloByte]

That's why the Brits use Polish plumbers -- might be drunkards but can tell a pipe from their ass. Any who couldn't stayed in Poland.

Re:If it looks like a duck, and quacks like a duck

[JBMcB]

Key facts in this case
- He had to work 5 days a week for a minimum of 40 hours
- He had to wear the company uniform and drive a company-logo van
- He couldn't send someone else to do the work (substitution) (although under limited circumstances a different pimlico employee could do work)
- There were significant limitations on his ability to work for other people or competitors

That's interesting, and probably shields some gig-economy companies from similar rulings. For regular Uber, at least:

1. You work whenever you want, as much as you want
2. You don't have to wear a uniform (but I think you need to put an Uber sign in your window when you are driving)
3. You can do whatever else you like when you aren't working for Uber.

The "sending someone else" thing doens't apply in this case, I think, because you are accepting fares from requests, nobody is ordering you to take a fare.

Re:Contractors

[cayenne8]

Contractors get no respect in California. We work side by side employees, but get none of their benefits.

Well, if you are a REAL contractor, you know you calculate your bill rate to take into consideration you paying your health care insurance and HSA, your time off for vacation and sick, etc.

That's one reason contractors' hourly bill rates look to be incredibly high, but things like that and retirement savings, etc...are all parts you pay out of that bill rate.

It is nice, to be able to come and go as you please much more than W2 employees, and you get nice tax write offs that the W2 folks don't get.

There are pros and cons to both sides of the equation....but if you do it right, contracting can give you benefits over the regular employees.

If nothing else, they usually want to work the W2 salary employees OT more often than the contractors, because the have to pay the contractors for those hours, which they get for "free" off the W2 salaried employees....that's one big benefit.