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Supreme Court ruling on self-employed contractors could turn lives upside down

This week, up and down the country, millions of self-employed contractors will be glued to their smartphones, radios and TV screens to discover the outcome of a court case that will have major ramifications on their livelihoods.
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On Wednesday morning a group of Supreme Court judges will reveal their judgement on the appeal case I brought before them, which has questioned the UK’s outdated employment laws.

To recap for those who haven’t heard about the case, it centres around whether a self-employed contractor, providing services to a company, should actually be treated as a “contractor”, or alternately is classed as a “worker”, and as such deserves similar employment rights to a PAYE employee.

In our particular case it was about self-employed plumber Gary Smith, who despite being paid more than £500,000 over three years by Pimlico Plumbers, sued for employment rights, even though he signed a contract as a self-employed contractor.

He won his original case, which we appealed. This led us to the subsequent hearing at the Supreme Court in February from which the judges have since retired to consider the judgement we’ll get this week.

During his time with Pimlico, Smith operated as self-employed and was VAT registered. He paid taxes on a self-employed basis and bought his own tools and materials, on which he reclaimed tax, also claiming for an office in his home. He 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 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. In my view he had already been paid to take care of this for himself.

If there was ever a case of someone wanting their cake and eating it, this is it. But in fact, the ripple effect caused by Smith’s claim could lead to a large number of self-employed people having their cake taken away from them.

Since our appearance at the Supreme Court I have bumped into so many tradespeople who are very concerned about the potential outcome. While the media is quick to lump this case into the “gig economy” basket, it’s actually nothing of the sort.

This isn’t about delivery drivers , it’s about how millions of skilled professionals ply their trade in a way that has been beneficial to them and their families for decades.

Self-employed contractors know what they are responsible for, both in terms of work and their finances, and the companies they supply their services trust them to do the jobs sent their way.

These highly-skilled people can pick and choose where they get their work from. That could be from one source or it could be multiple. But a change in the law could affect that choice and stop them only picking up work from one company and forcing them to potentially go to less lucrative sources to maintain their status as self-employed.

If the judgement doesn’t go my way it’ll cost me a few quid in holiday pay, which I can live with. But I know for sure that for all the plumbers, builders, sparkies, health services workers and even some that work in the media, it won’t be something they can live with.

In fact, it will turn their lives upside down. Where’s the common sense in that?

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About Author

Charlie Mullins

Charlie Mullins, also an OBE, is the archetypal entrepreneur – having started his business from scratch and then building it into a multi-million pound enterprise. From humble beginnings growing up on an estate in South London, he left school with no qualifications, but after a four-year plumbing apprenticeship he started his own firm, Pimlico Plumbers, which now generates a turnover in excess of £30m and boasts many well-known names among its many clients including Simon Cowell, Helen Mirren and Richard Branson. He has been a regular contributor on Real Business since 2011 and is particularly about apprenticships.

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