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Supreme Court hears its first ever gig economy case

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Far-reaching changes to employment law on the horizon

Image credit: Instagram (@thisgirlobsessed)

The Supreme Court will hear its first ever case on the gig economy today. Lady Hale will sit alongside Lord Wilson, Lord Hughes, Lord Lloyd-Jones and Lady Black in a case set to have far-reaching consequences for employment law.

While you might assume it’d be Uber leading the Supreme Court’s first ever gig economy dabble, that honour instead goes to Pimlico Plumbers.

Gary Smith, the respondent in the case, is a plumber who undertook work for the business over a five-year period. Despite Pimlico Plumbers’ steadfast contention Smith is a self-employed contractor, the Court of Appeal agreed with a number of lower court rulings that granted Smith worker status. Given the rights this status confers, Smith was entitled to bring legal claims against Pimlico Plumbers, including disability discrimination.

The Supreme Court justices hearing the Pimlico Plumbers case. Image credit: © UK Supreme Court / Kevin Leighton

Charlie Mullins, chief executive of Pimlico Plumbers and the second appellant in the case, said:

“During [Smith’s] 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.”

Mullins, who substantially funded the Gina Miller Article 50 challenge, continued:

“In one three-year period 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 landmark legal challenge marks the first gig economy case to reach the highest court in the United Kingdom, though the employee status battle fought between drivers Yaseen Aslam and James Farrar against transport behemoth Uber is perhaps more well known.

The pair, backed by trade union GMB, believe they are entitled to employment rights such as minimum wage and protection from working excessive hours. Uber’s unwavering dismissal of its drivers’ claim hasn’t washed with judges so far, and the taxi-hailing app’s worker status case is to be heard in the Court of Appeal this year. A claim brought by 40 Deliveroo drivers will have its day in court (well, the employment tribunal) this year, too.

But Uber and Deliveroo riders aren’t the only ones chasing worker status; a district judge had also sought the apparent panacea to all our employment law woes.

The case, born out of the judge’s desire to take advantage of whistleblowing legislation, made it to the Court of Appeal last year. There, however, the bench unanimously ruled judges aren’t entitled to the same benefits as workers largely because of a lack of employment contract. (The appellant had tried to argue this relationship existed between judges and the Lord Chancellor.)

Christopher Mallon, a law PhD student at Queen’s University Belfast, is also claiming employee status. Mallon — who has an anxiety disorder, arthritis and Crohn’s disease — claims that a “catalogue of failings” at the law school led to his alleged constructive dismissal from his teaching post. He too will be watching this week’s Supreme Court hearing with interest.

The latest comments from across Legal Cheek

Given the very wide-ranging implications of today’s case, it’s unsurprising there are a number of swish barristers involved. Matrix Chambers‘ Thomas Linden QC and Devereux Chambers‘ Akash Nawbatt QC will be representing Pimlico Plumbers and Mullins, as instructed by Mishcon de Reya. Karon Monaghan QC, also of Matrix fame, 1MCB’s David Stephenson and TMP Solicitors will be acting for Smith.

This week looks set to be a busy one for the Supreme Court judges. Tomorrow, judgment is expected in a case involving victims of John Worboys, the black cab rapist.

The women involved both reported their sex assaults to and later brought damages proceedings against the police, alleging a failure to carry out effective investigations into these complaints. The Supreme Court will decide whether there is a legal obligation to investigate ill-treatment which has been perpetrated by a private individual, without the complicity of a public authority.

Also due out tomorrow is a judgment involving the amusingly-named law firm Wright Hassall and a litigant-in-person wishing to bring professional negligence proceedings against them. The case considers whether a litigant-in-person’s service of claim by email should be considered as valid service.

The Pimlico Plumbers case is scheduled to finish tomorrow.

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32 Comments

Not Amused

I am uncomfortable with this sort of decision being made by judges. I think this is one for parliament.

The more the court is willing to become political, the closer we get to elected judges.

(12)(9)

Anonymous

Why is that a worry?

(0)(8)

Anonymous

Ooooooh

Je

Re

My

Cor-byn

About time the UKSC makes this illegal. The man was b l a t a n t l y employed and not self-employed. It’s unbelievable that sham self-employment is even allowed.

(0)(11)

Anonymous

Not sure it’s as clear cut as you say. He’s paid taxes at 20% and anything above is at 40%. He enjoyed the boon when he was able to work and now that he isn’t, he is claiming to be an employee. It will always be a difficult situation, however, most people are happy with their contractor status, that is until something goes wrong and then they claim to be an employee!!!

Will Mr Smith make the relevant back payments for tax, or will this case result in the company having to back pay this amount to the treasury??? Not really an ideal outcome either way.

(9)(0)

Anonymous

What on earth are you on about. Self-employed people pay higher rate tax if their earnings are over the threshold, same as everybody else. Would have thought on a blog aimed at barristers people might know how self-employed taxes work.

(4)(1)

Anonymous

It depends. If you trade as a PLC, then you pay 20% Corporation Tax and pay normal tax rates on your drawing and off-set the Corporation Tax already paid. Being self-employed also means you get to off-set your fuel, mobile phone bills, motor insurance, cost of employees etc against tax, which employed people are not entitled to do.

He did all of these things and was self-employed when it suited him and wanted to tax-deduct his expenses (including employing his wife!). It would seem unfair if he was self-employed when it came to taxation and took all the benefits that self-employed people receive (because they don’t have employment rights) and be given the benefits of being employed as well.

(5)(2)

Anonymous

And where in the reporting does it suggest that he incorporated? Ask yourself this question. If incorporating is such a good idea why have only a tiny minority of barristers incorporated since it became permissible.

Seems to be a misunderstanding here that being self-employed is some kind of privilege rather than being a massive pain every January.

(1)(0)

Anonymous

I am self-employed as a barrister and don’t run as a PLC. It is slightly more tax efficient to do so if your business involves deprecating capital assets like vans, black cabs etc but most barristers don’t bother as they don’t have deprecating capital assets.

I do however deduct against Tax and VAT on my expenses. I also pay tax two years after I’ve received the money (unlike an employee on PAYE) Those are pluses to being self-employed. Yep, it is a pain every January and July and that is certainly a minus, as is making payments on account.

Sorry, but I don’t get your point? Whether its better to be self-employed or employed isn’t the point. The point is whether he is in fact self-employed. He’s been turning over £170k+ a year, registered as self-employed with the tax man, deducted his expenses against VAT and Tax and even off-setting employee costs. Since the employee was his wife, that did give him a tax advantage.

If he pays tax in exactly the same way a self-employed barrister (or any other self-employed person does) how is he not self-employed? Or can I argue that although I’ve been paying tax on a self-employed basis for 20 years, if my practice takes a nose-dive or I become ill I was really employed by Chambers all along?

Anonymous

This only goes to bolster my longstanding suspicion that you are not a lawyer. This is the Supreme Court interpreting a specific piece of legislation made by Parliament. It is exactly what the courts are meant to do.

(3)(0)

Employment pupillage applicant

Would an employment practitioner please give a ballpark figure of what top employment barristers make gross a year?

(0)(6)

Anonymous

Over £9,000.00.

(8)(0)

Anonymous

In excess of £4,000,000,000.

(2)(1)

Anonymous

More than £0, less than £18tn.

(7)(0)

Anonymous

Well, you’re not wrong…

(0)(2)

BPTC student

Of what relevance to an employment *pupillage applicant* is what *top* employment barristers make?

(5)(0)

Anonymous

Seems like a pretty relevant question for somebody making a choice about the career they wish to pursue.

Newsflash – people care about the lifestyle that they can lead.

(1)(5)

Anonymous

Yeah but if they’re an employment pupillage applicant, sounds like they’ve already more or less made up their mind? No way out…

(0)(0)

BPTC student

That wasn’t my point. My point was that they are asking what the top 5 employment QCs make, instead of asking about average earnings of, for example, a junior of 10 years’ call in a good employment set. Whatever career you’re choosing, it’s idiotic to decide whether to do it on the basis of earnings of the select few at the top.

It’s like saying “I’m going to go into stock trading because Warren Buffett is worth $70bn.

However bright and talented the person who asked that question is, by definition of “top” their chances of becoming a *top* employment barrister are very small, and if it happens, it will only happen in 30 years.

Unless they meant Legal Cheek definition of “top”, which is synonymous with “any”.

(3)(1)

Tenant

Do you have a pupillage?

(1)(0)

BPTC student

Yes, but what does it matter for my point?

(0)(0)

Anonymous

Lord Hughes is such a nice chap. Can go on a bit, mind.

(2)(0)

Legna & Lived

what a beautiful ethnically diverse group.

(1)(2)

Anonymous

Katie? Is that you?

(1)(0)

Anonymous

Please write a 100 times “Pimlico Plumbers v Smith is not a gig economy case” because it isn’t.

It’s a simple employment status case of the traditional kind.

(5)(1)

Anonymous

What on earth are you on about. Self-employed people pay higher rate tax if their earnings are over the threshold, same as everybody else. Would have thought on a blog aimed at barristers people might know how self-employed taxes work.

(1)(2)

Anonymous

Sorry that was aimed at the comment above about him underpaying tax.

(0)(0)

Anonymous

Apology accepted!

(0)(0)

Anonymous

This case *is* a gig economy case. In fact, it’s one of the most important. Regardless of the fact that Mr Smith was not a gig economy worker.

Every single gig economy case revolves around the question of employment status. So this case, which will look to settle that issue, is absolutely fundamental to every single gig economy case that is going on right now.

(1)(0)

Anonymous

The case is not about whether he was self employed or employed. The issue is whether he is a worker. Whilst all employees are workers only some self-employed people are. The lower courts have all agreed that Mr Smith is a worker (3-0). Mr Smith decided not to appeal the finding that he was not an employee to the CoA and that issue is not before the Supreme Court (it was truly hopeless).

(0)(0)

Anonymous

You seem to be ignoring the Equality Act dimension, under which the s.83 question is whether he’s in employment. You’d be right to point out that an issue is whether that corresponds to limb (b) worker status under the ERA, but the EqA dimension clearly renders it legitimate for someone to refer to this as a case about whether he was employed (albeit as defined under the EqA rather than the ERA or WTR).

(0)(0)

Anonymous

No.

First, this is about whether he was a worker or a self-employed contractor. This is a case about employment status.

Second, this statement is wrong: “all employees are workers only some self-employed people are”. Self-employed persons, or ‘contractors’, are never, ever workers.

This case is about whether, for the purposes of EqA 2010, Mr Smith was a self-employed contractor or a worker. If it is the former, he is entitled to nothing. If it is the latter, he is entitled to protection against discrimination, which in this case took the form of his being dismissed because of his disability.

(1)(0)

Anonymous

Surely Autoclenz v Belcher was also gig economy case heard by Supreme Court?

(0)(0)

Comments are closed.

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