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https://www.bbc.co.uk/news/business-44465639
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.
Pimlico Plumbers chief executive Charlie Mullins said he was "disgusted by the approach taken to this case by the highest court in the United Kingdom".
Mr Mullins said: "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.
Next PPI type phone call?
Good.
Blame that one on the EU you bunch of pricks.
Good, Pimlico Plumbers are run by a Brexit supporter.
Heres hoping they end up with many more disgruntled contractors claiming against them...
If he's paid/recalimed VAT AND paid SA tax then he should be paid the SA back, the VAT he couldn't pay/reclaim and then he should be taxed at the relevant PAYE rate.
Watch how fast he suddenly pedals backwards when handed the bill.
Can't do both - one or the other.
Charlie Mullins looks like he stepped out of the 70's..
+1 you can't have it both ways.
Well in this case they are going to allow the tribunal to discuss unfair dismissal which will be interesting
If he’s paid/recalimed VAT AND paid SA tax then he should be paid the SA back, the VAT he couldn’t pay/reclaim and then he should be taxed at the relevant PAYE rate.
Watch how fast he suddenly pedals backwards when handed the bill.
Can’t do both – one or the other.
This.
In my workplace it has been made clear that if it is decided that if the contractors are declared employees then they will be treated as PAYE and their day rate will NOT be increased to compensate. The cost to the company will stay the same.
you can’t have it both ways
I agree, but it seems the law doesn’t.
Can’t do both – one or the other.
This I firmly agree with.
IMO the decision is the right one.
“disgusted by the approach taken to this case by the highest court in the United Kingdom”
do you think he'll apeal to the ECJ 🙂
hold on, So the guys self employed? but wants to claim sick pay and holidays?
but hasnt contributed to the company or tax?
hows that work?
He’s claiming unfair dismissal due to health reasons (he wanted to go to 3 days a week after a heart attack. Pimlico didn’t renew his contract.
hold on, So the guys self employed? but wants to claim sick pay and holidays?
but hasnt contributed to the company or tax?
hows that work?
Or the company deliberately avoided taking on people as staff to improve flexibility and keep costs/liability low but treated them as long term employees by retaining them for longer than any temp/contractor should be - hence the defacto employment rights question that will be answered
Plenty of organisations happy to have a fleet of long term contractors on board for their benefit.
Mullins is a classic entitled prick, blaming the courts and calling them disgusting.
Mullins is a classic entitled prick, blaming the courts and calling them disgusting
My Daughter is at school with his Gran daughter, we see him around as the whole family live close to us.
Your description is pretty accurate.
It's not as if they can't afford to treat their contractors as employees. I got a quote from them once and thought the guy was writing down his telephone number.
When you take a contract as a contractor you have to except e extra risk, hence some of the extra money.
When you take a contract as a contractor you have to except e extra risk, hence some of the extra money.
Certainly, but if they wish to retain you for longer than "contract" but won't offer you full time something is wrong - they were playing the system to their advantage.
Do we want a world where we can have cast iron employment rights but then get round them by not actually employing anyone
So, guy has a heart attack, and quite understandably says he'd like to work less. Bosses response is to show him the door....
Ignoring the rights and wrongs of contractor/gig economy argument, that's a shit thing to do to someone.
Certainly, but if they wish to retain you for longer than “contract” but won’t offer you full time something is wrong – they were playing the system to their advantage.
I thought the contracts were for finite amount of time renewed, by mutual agreement of both parties, as and when they ran out. It’s a risk on both sides, that’s the point.
Ignoring the rights and wrongs of contractor/gig economy argument, that’s a shit thing to do to someone
That what is what the plumber is trying to do. Ignore the contractor part of it as, in these circumstances, it suits him.
To say he’s an interesting character is slightly understating it.
From rumours I’ve heard he is not a pleasant person and the company has a real cake and eat it working practice.
Mind you, you probably wont be able to find anything about him online.....
Its a bullshit con both ways. Company saves NI contributions and employment costs. Plumber pays less tax and n.i whilst having a relatively stable "employment" We get regular hassle fro the revenue about having "subbies" on for more than a few months at a time. Have to let them go elsewhere for short periods to run below the radar.
Dont know how some get away with it.
I thought the contracts were for finite amount of time renewed, by mutual agreement of both parties, as and when they ran out. It’s a risk on both sides, that’s the point.
You mean there were options to be a full time employee of the company?
You mean there were options to be a full time employee of the company?
No, there weren’t. Were other companies offering full time available?
OMG. He has actually just announced that he is, in fact, taking this to the ECJ.....
The ironing.....
Charlie Mullins is a big 'Remainer' - I think I read he funded the Gina Miller case.
charlie the chimp mullins , top tory donor , another wretched creature who wants to rip off his workers as well as his punters .....
No, there weren’t. Were other companies offering full time available?
Not the point.
It’s exactly the point. I don’t do contracting work as I’m averse to risk, and would rather have a bit of backup if my employer suddenly turns out to be a shit. It means I don’t earn as much, and am less flexible, but it means I’m not over a barrel if the unexpected happens.
But in this case the company (not an actual employer really) set up to remove all the risk from them and transfer it to the individuals. They were set up to avoid any employment obligations. It appears that the court has ruled they cannot do that. They treated the people like employees but gave them no choice.
I'd say it's a really shitty way of dealing with it - then to not take any flexibility from their contractors does seem like they didn't want contractors but didn't want to play with/pay for employees....
If you set up your business to avoid employing people but want people there then you are taking the piss out of the system and the court seems to have agreed with that.
Finally some rights for the small guy. Myself and many friends as self employed subcontractors have been screwed many times through the years from a few pounds to thousands without a leg to stand on. Only for the main contractor to boast about profits made that year. Wait to see news reports like this very regularly.
You accept the job that's offered to you under the terms given.
As mentioned above I now assume he's going to have ALL his t&c's made representative of a PAYE employee including back income tax and NI payed.
As mentioned above I now assume he’s going to have ALL his t&c’s made representative of a PAYE employee including back income tax and NI payed.
It's not as black & white as that (as usual). The court have, apparently, differentiated between what is an employee, subcontractor or worker. It seems he is the latter because of the restrictive nature of his contract.
I have clients who offer their subbies PAYE or self-employed & a large number choose the latter because of CIS rules & tax benefits. They even set up one-man limited companies as well as VAT registration to circumvent the various rules around PAYE.
Whilst I agree with the (published) court findings it might just be a case of greed on both sides.
Those Pimlico boys (and girls ?) don't too bad though do they. Read somewhere half of them are on over £100k a year with a handful on £200k +
Though why they didn't agree to him cutting his hours is beyond my simple thinking. Would of saved themselves a lot of hassle ( and potentially money )
Though why they didn’t agree to him cutting his hours is beyond my simple thinking. Would of saved themselves a lot of hassle ( and potentially money )
Therein lies one of the problems with this kind of contract. If they had allowed it there are 2 downsides - firstly, there would likely be others wanting the same, especially considering some of the earnings figures being banded about. Secondly, there would still be the same amount of work coming in so it would be necessary to either bring someone else in to cover the shortfall in labour or share it out amongst the existing contractors creating similar expense & (probably) greater admin.
I’m no tax expert but I thought contractors linked to only one supplier after two years were classified as IR35 inclusive ?
As said, no expert but I have taken on contractors (short and long term) and always running upto the two year period had to release them or they’ve left because of the rules..
I’m sure the implication from earlier reporting was Pimlico didn’t permit people to go “part time” because the assumption was you were doing other plumbing work “on the fly”. They *may* have a legitimate concern there - if you do a good job for someone and then undercut Pimlico on future work. However, it’s easy to see how a court joins the dots from those sort of restrictions to the person being a worker; now what doesn’t make sense is how HMRC can’t/don’t join the same dots.
I’m no tax expert but I thought contractors linked to only one supplier after two years were classified as IR35 inclusive ?
As said, no expert but I have taken on contractors (short and long term) and always running upto the two year period had to release them or they’ve left because of the rules
If they have other clients and aren't just working for one at the same time then ir35 is falling over.
However he worked just for them for 6 years no?
I’m pretty certain that Pimlico staff have to generate their own work so having too much work shouldn’t have been a problem.
I’m no tax expert but I thought contractors linked to only one supplier after two years were classified as IR35 inclusive ?
As said, no expert but I have taken on contractors (short and long term) and always running upto the two year period had to release them or they’ve left because of the rules..
Not correct - IR35 has no such time limit . IR35 is very complex. But if you run a few scenarios through the govts CEST tool you'll start to get a feel what the govt considers makes a contract inside or outside ir35
I’m no tax expert but I thought contractors linked to only one supplier after two years were classified as IR35 inclusive ?
Nope. That's a strange bullshit myth that seems to persist and a lot of companies seem to believe it. No idea why. There just is no such limit, even in the tests that are run for status under IR35.
However the ruling with this plumber guy has stated he was basically failing all the tests for IR35, so really he should be hit for back tax ruling him inside IR35 (which goes further back than 6 years. They just can't do the initial investigation looking at your contracts and accounts beyond 6 years, unless there's a suspicion of illegal activity).
Awkward this one. If I were to be ruled inside IR35 and thus pay full PAYE/NI but not have any of the employee benefits, then I'd be demanding sick & holiday pay also. So this ruling works in my favour. However it's also completely pointless contracting. May as well be an employee. That's a negative for companies who will have to go through an expensive long winded process to recruit employees, providing full benefits and employee rights.
And trying to be a true freelancer working independent of specific companies with full flexibility, and of course the tax benefits that come with managing the money on an invoice & payment for work basis, the last thing I want is to be forced into a client's PAYE and/or sick/holiday regime. More so if more than one client is involved or a series of short term contracts with clients. It's going to get very complicated, plus the rates will be a lot lower to compensate.
Where this ruling is good is for the Uber types, but they've already had a ruling under dependent contractors, i.e. they depend on the likes of Uber who effectively become their employer. Like an umbrella or agency worker company.