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Pimlico Plumbers case starts, Uber will be watching with a keen eye

21 Feb 2018

 

 

Pimlico Plumbers could get that sinking feeling as their case in the Supreme Court as to how "gig economy" workers should be treated begain on Tuesday.

 

The plumbing company, which boasts a 270 strong workforce, is arguing that not all of its staff are employees, but are independent contractors, and are therefore not responsible for worker benefits such as minimum wage or paid holiday leave. The result of the case is not due for several months.

 

The action has received significant interest from minicab giant Uber, who wanted to "piggy-back" onto the Pimlico Plumbers case. Unfortunately for Uber, it is alleged that they were advised that they would have to cut their own path through this particular legal quagmire.

 

Uber, made an eye-watering $1.1 billion net loss in its fourth quarter last year, after subsidising fares in some areas as well paying their drivers and spending on expansion, despite gleaning $11 billion in revenue.

 

Should the case go against Pimlico Plumbers, then Uber, with a 40,000 man workforce, could potentially be liable for an estimated £13 million a month National Insurance bill from the Inland Revenue. 

 

There is no doubt that Dara Khosrowshahi, Uber's CEO, who has recently been travelling the globe trying to reverse Uber's questionable image, will be watching this case very closely.

 

Ahead of Pimlico Plumbers’ UK Supreme Court appeal hearing, the company’s Chief Executive Charlie Mullins believes the case should help create employment law that reflects modern business practices.

He also suggests the appeal hearing, which begins tomorrow, will have significant ramifications on employment law for a number of industries.

Charlie said: “Tomorrow we are going to battle in the UK Supreme Court and the outcome of the case will have huge ramifications for a large part of the economy, including the media, the health service, and of course the construction industry of which plumbing and other trades undertaken by Pimlico Plumbers, make up a huge part.

“In Isolation the case we are fighting tomorrow started six years ago when a self-employed plumber, Gary Smith, who did work for Pimlico Plumbers decided that despite the fact that he had always known he was a self-employed contractor, decided that he would demand employment rights that only employees, not contractors, are entitled to.

“And now all these years later we find ourselves still fighting to prove that a man, who took every advantage of being a self-employed plumber when it suited him, is indeed a contractor.

“During his time with Pimlico Plumbers, he operated as self-employed and was VAT registered. He paid taxes on a self-employed basis, bought his own tools and materials, on which he reclaimed tax, also claiming for an office in his home, chose when he wanted to work, and even employed his wife to carry out secretarial tasks for him and offset that as a business expense.

“In one three-year period Mr Smith earned more than £500,000 as a self-employed contractor, but when his circumstances changed he wanted me to foot the bill for sick and holiday pay, as well as to grant him other employment rights, which he was not entitled to, and which in my view he had already been paid to take care of for himself.

“This case is not like Uber and the other ‘gig-economy’ cases. The engineers who contract to Pimlico Plumbers are very highly-skilled individuals, can go anywhere and do whatever they want. They earn six-figures when they work with our customers, which is why they are so keen to do it!

“It is also true that engineers can choose when they want to work. They do not have to make themselves available to Pimlico Plumbers, and can take time off whenever they want.

“As a company Pimlico Plumbers wants to comply with its obligations and it has always been our genuine belief that we have been doing that. HMRC has looked into the situation in the past and told us that engineers are self-employed. We have been operating in accordance with that.

“I've always been a self-employed entrepreneur and I've always seen the engineers in the same way, and I feel that Gary Smith is trying to have his cake and eat it. Mr Smith's approach to this case has felt he's been trying to hold me to ransom and I don’t take kindly to that.”

On the wider issue of the need to evolve employment law, Charlie added:

“Employment law is very unclear, and hopefully we can all get some clarity from the Supreme Court on this situation, which I have already said will have huge implications for many industries, including plumbing and construction.

“And it doesn't stop here either; the UK is going through a huge cultural change in how people work, and how they are paid, and what we need more than anything else here is a ruling that takes into account what is happening on the building sites, offices, press rooms and hospital wards of the 21st century, not one that harks back a to the 1950s.”    

 

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