Over the past few months we have seen a number of high profile cases of workers in the so called “Gig Economy” suing the companies they work for. In most of the cases the workers have been treated as self-employed contractors by the companies and have sought to be reclassified as employees by the courts. The main reason for this is that employees have employment rights such as the right to holidays, sick pay, maternity and paternity leave and protection from unfair dismissal.
In three of the most recent cases involving Uber, Citysprint Couriers and Pimlico Plumbers the workers have won their cases and this is likely to have wide ranging consequences for those businesses who keep prices lower by treating their workforces as self-employed, saving National Insurance and minimizing employment costs.
Before we jump to the conclusion that the self-employment model is dead it’s important to understand that all of these court decisions have been based on the specific facts of the cases and this is the approach that the courts will always take. There are well established guidelines and a lot of case law on employment vs. self-employment and the judges will look at the specific arrangements between the company and the workers in each case. For example the Pimlico Plumbers Court of Appeal case reported just last week involved a very detailed 33 page decision and the judges found that the staff were “workers” rather than employees or self-employed staff. A “worker” has some employment rights, but not as many as an employee.
We will undoubtedly see many more cases of this nature in the near future, and the Government has commissioned the Taylor Review on Modern Employment Practices which will investigate and report on the Gig Economy as part of a wider look at workplace practices and norms.
Given all of the above, if you use self-employed contractors in your business then this is a good time to review the practice and to make sure that your contracts and working practices support self-employment. The consequences of getting it wrong can include claims for unfair dismissal, back holiday pay and sickness pay as well potential claims for back taxes from HMRC. For expert advice and a review of your working practices, contact a member of our employment law team today.
The Backhouse Solicitors Team
Tel: 01245 893400
Email: [email protected]