Charlie Mullins opens up about self-employment court ruling
5 min read
18 June 2018
It’s not a surprise that I was disappointed with the outcome of our Supreme Court hearing, which ruled against Pimlico Plumbers.
The truth is I am. But not necessarily because they decided plumber Gary Smith was a worker, rather than the self-employed contractor we all knew he was when carrying out work for my company.
I am more annoyed by the approach taken to modern employment by the UK’s highest court. The judges had a great opportunity to bring the employment law into the 21st century, but instead they bottled it.
Someone asked me over the weekend, how do I now feel after the dust has settled following the judgement. The simple answer is, exactly the same as the moment I walked out of court into a huddle of flashing camera bulbs and TV cameras. The dust isn’t settling.
In fact, what took place has the potential to whip up a dust storm that will engulf the country causing major issues for businesses and contractors alike. Instead of a clear resolution, the outcome is more uncertainty, which is a cancer that eats away at the economy.
I’m a big fan of the common sense approach to life, the world and business, and one of my favourite adages in that vein is: “If it looks like a duck, and quacks like a duck, then it’s probably a duck!”
But it seems that if a plumber looks like a contractor, gets paid and pays tax like a contractor, according to the law that plumber is still entitled to all the rights of a “worker”.
As anyone who followed the case will know, Smith signed a self-employed contract with Pimlico and, for six years, it was an arrangement that worked well for him and the company.
That was until health problems changed his circumstances, leading to him claiming full employment rights, despite having been paid as a contractor. This included half a million pounds in one three year period, on the understanding that such rights did not apply.
He paid his own tax; used his own tools; supplied and made a profit on the materials he used; claimed for an office in his own home, and even employed his own wife in his company.
Because he wasn’t able to substitute any two-bob plumber for himself on a job, rather than one from our approved list, and that we wanted him to work a regular 40 hour week, the court decided he wasn’t a real contractor.
If you believe the popular press our case was a watershed moment for the so-called gig-economy, which is generally understood to mean workers in low-paid, low-skilled courier and mini-cab industries, who, it is argued, are exploited by their corporate masters.
Truth is, the entire perverse ruling has little to do with exploited workers. It has a lot of reputable business people and contractors, in the building industry, and beyond, very worried that they will be adversely affected.
They may be right, although I suspect they might have less to fear than they think. Because, if their people, like my plumbers, appreciate the huge financial and life-style benefits of contracting to a single company, they have no good reason to rock the boat.
All you have to do is talk to all the plumbers, heating engineers, carpenters, electricians, builders and other related building trades, who are part of my team at Pimlico, to understand how the model benefits them.
They earn big money, drive nice cars, live in big houses, can afford to send their children to good schools, and have great holidays and lifestyles in general.
The fact is, no plumbers were exploited in the making of Pimlico Plumbers! We do, however, need a law change to give businesses and their ‘contractors’ a sense of certainty.
It cannot continue to be the case that a plumber, earning a six-figure salary for their labour, who is making a profit on materials, while claiming tax advantages of being self-employed, can demand benefits as if they were a PAYE tax paying employee.
The 21st century UK working landscape has been transformed, sometimes for the better, and sometimes, like in the case of zero hour contracts, for the worse.
This is not a passing fad, and many of these contractors have a single source of income. What we need now is for employment law to catch up with employment!