I’m a big fan of the common sense approach to life, the world and business. One of my favourite adages in that vein is the one that goes: “If it looks like a duck, and quacks like a duck, then it’s probably a duck.” But it seems if a plumber looks like a contractor, gets paid and pays tax like a contractor, according to the Supreme Court, that plumber is still entitled to all the rights of a ‘worker’.
That’s the current law in the UK – and I should know. I have tested the water, right up to the highest court in the land. The judgment I’m talking about was made by the UK Supreme Court last Wednesday and concerned the employment status of Gary Smith, a plumber who signed a self-employed contract with my company, Pimlico Plumbers, in 2005.
For six years this arrangement worked well for Gary. That was until health problems changed his circumstances, leading to him claiming full employment rights. This was despite having been paid £500,000 in one three-year period as a contractor, on the understanding that such rights did not apply.
Smith 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. But, because he wasn’t able to substitute any two-bob plumber for himself on a job, rather than one from our approved list, and we wanted him to work regularly – 40 hours a week – the court decided Smith wasn’t a real contractor.
If you believe the popular press, our case was a bellwether 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, but does have a lot of reputable business people and contractors very worried that they will be adversely affected.
They may be right, although I suspect they might have less to fear that they think. Because if their people – like my plumbers – appreciate the huge financial and lifestyle benefits of contracting to a single company, they have no good reason to rock the boat.
All you have to do is talk to the plumbers, heating engineers, carpenters, electricians, builders and other related trades who are part of my team at Pimlico Plumbers 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 this: 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. God knows, with the mess that is Brexit, there’s enough business uncertainty around at the moment.
It cannot continue to be the case that a plumber, earning a six-figure salary for his or her 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 – as in the case of zero hour contracts – for the worse. In 2008, there were 3.8 million contractors in the UK economy. That figure rose to 4.6 million by 2015. 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.
Charlie Mullins is the founder of Pimlico Plumbers