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Has a plucky plumber put some hybrid estate agent business models in doubt?

Freelance pipe bender who took 'employer' to court over his entitlement to holiday and sick pay may trigger a rethink at many hybrid agent's headquarters.

Nigel Lewis

hybrid estate agent

A freelance plumber who took the company he worked for to court over whether he was entitled to the same rights as a permanent employee has won his case in the High Court today.

The landmark decision throws huge doubt over the UK’s ‘gig economy’ including the business models of some hybrid agents.

Gary Smith took Pimlico Plumbers initially to a tribunal and later the High Court to demand his rights after working solely for the firm over a six-year period.

The outcome of the judgement is that the employment tribunal he originally took the company to after claiming to have been unfairly dismissed is “entitled to conclude” that he is a worker and entitled to employment rights.

This will worry many executives running the UK’s hybrid agencies, many of whom employ representative on the ground in a similar way to the plumber involved in today’s case. He was VAT registered and paid tax as a self-employed person.

Holiday and sick pay

Now, although workers such as Gary Smith will continue to be employed as freelancers, they may be entitled to holiday and sick pay.

The colourful chief executive of Pimlico Plumbers Charlie Mullins told the BBC he was “disgusted by the approach taken to this case by the highest court in the United Kingdom”.

“This was a poor decision that will potentially leave thousands of companies, employing millions of contractors, wondering if one day soon they will get a nasty surprise from a former contractor demanding more money, despite having been paid in full years ago”.

The case comes at an important time for ‘gig economy’ employers who use freelance representatives and who view them as quasi-franchisees. The government is currently considering legislation to sharpen up these blurred employment lines.

Chris Wood NAEA Propertymark“This is going to put a spanner in the works of some hybrid estate agents like Purplebricks but not all – some like eMoov do directly employ their local representatives,” says Cornish agent Chris Wood of PDQ Properties.

“But remember some traditional estate agents employ negotiators this way too, so it’s not just about the online agents. But anyone employing people this way will need to now think long and hard about several topics including National Insurance, tax and holiday and sick pay costs.

Chris also says today’s High Court case also throws the positions taken by Trading Standards and the Property Ombudsman recently on gig workers within the industry.

Read more about hybrid estate agents.

June 13, 2018

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