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A British Plumber May Show Uber the Future of Employment (bloomberg.com) 98

A British plumber may show Uber the future of employment. From a report: The U.K.'s top judges ruled Wednesday that Pimlico Plumbers Ltd. should've treated one of its tradesman as a "worker," giving him the right to vacation pay and to sue the company in a decision that could have ramifications for other gig economy lawsuits. Supreme Court judges found that plumber Gary Smith, who worked for London-based Pimlico Plumbers between August 2005 and April 2011, wasn't self-employed or a client of the firm, giving him the right to sue the company under discrimination laws.

"This is one of the most significant employment status decisions we have seen in the last five years," said James Murray, an employment lawyer at Kingsley Napley in London. Uber and other app-based firms will be watching the ruling with interest as they face similar legal challenges over the way they treat employees. Uber's appeal of a decision granting its drivers benefits including overtime and paid vacation is scheduled to be heard by another court October 30. Meanwhile Deliveroo, the food-delivery service, is currently battling the IWGB union over its riders' employment status and in May, taxi service Addison Lee lost an appeal over whether drivers were independent contractors or employees with rights to benefits.

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A British Plumber May Show Uber the Future of Employment

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  • by MancunianMaskMan ( 701642 ) on Friday June 15, 2018 @01:36AM (#56788380)
    If he wasn't self employed, he should have payed a higher rate of NI (for all you non-UK people: in the UK, income tax is split in a weird way into 2 pieces: i) income tax and ii) Natonal Insurance (NI). NI is not payed by pensioners, and a lower rate applies to the self-employed). I wonder if he's due a tax bill.
    • by demon driver ( 1046738 ) on Friday June 15, 2018 @01:53AM (#56788430) Journal

      This being 2018, I could very easily imagine governments demanding something like that, but perhaps as the culprit wasn't the worker but the company it would rather be fair that the company would have to repay him so that his net wages, after paying that tax bill, would equal what he had earned being self-employed?

      • Re: (Score:3, Interesting)

        This has been the subject of much debate and law-making in the Netherlands. The issue isn't new, and better believe that someone will pay this tax.


        Not long ago, legistlaters thought the VAR system was needlessly burdensome, and changed it so that self-employed and their clients had to enter into a pre-approved "model agreement". No one understood this system; some large companies (typically the worst offenders such as Deliveroo) got their model agreements stamped, the rest simply stopped hiring freelan
        • by JaredOfEuropa ( 526365 ) on Friday June 15, 2018 @03:22AM (#56788598) Journal
          ./ ate a paragraph there:

          This has been the subject of much debate and law-making in the Netherlands. The issue isn't new, and better believe that someone will pay this tax.

          In the old days, self-employed people did pay the national insurance tax without actually being covered. Then, the tax was repealed, but if the Revenue Service ruled that your work constitued employment rather than self-employment, you still had to pay (and were retroactively covered). Most freelancers were fine with this as they were in the best position to assess how much of a risk this actually was. But some thought this to be "unfair" and the law shifted the burden to the freelancers' clients. Still not a big deal, clients were ok with this if you could show a VAR, an individual ruling on the nature of your worker status, issued by the Revenue Service.

          Not long ago, legistlaters thought the VAR system was needlessly burdensome, and changed it so that self-employed and their clients had to enter into a pre-approved "model agreement". No one understands this system; some large companies (typically the worst offenders such as Deliveroo) got their model agreements stamped and carried on with the practices that started this whole debate in the first place; the rest more or less completely stopped hiring freelancers except through payroll companies (who are just highly expensive middlemen). This went on for the better part of 2016, until the new law was suspended. It still is, and they are still debating on where to draw the line between self-employment and employment.
        • by Anonymous Coward

          Canada has the same problem. If you're determined to be a personal services business your tax rate effectively becomes 58% (highest tax bracket in the country). But if you're not, your taxes are around 40% depending on what your dividends are.

          The difference is not well explained and many times the government will retroactively take a 28% increase in taxes for up to 7 years should they feel you fit the definition.

          Here's the government's definition:

          https://www.canada.ca/en/revenue-agency/services/forms-publ

      • Geez, you always have this one asshole, that goes and ruins a good thing for the rest of the many that enjoy the freedoms and tax benefits that can be attained by contracting.
        • by JonnyCalcutta ( 524825 ) on Friday June 15, 2018 @09:39AM (#56789532)

          Or...thank God for the guy that's prepared to stand up for what is right, despite the personal cost should they lose.

          This isn't about contracting on its own (which is still 100% allowable), this is about using contracting as a scam to avoid paying the full costs of employing someone. I actually think this is more cut and dried than e.g.. Uber, because these guys supplied him with his tools, uniform, van, jobs and demanded a minimum number of hours worked - that's pretty much employment where I come from.

        • Perhaps.

          However, in this particular case, the asshole was not the worker, but rather the management.

          The guy had a very serious health episode, was in hospital, went home, and asked the company to let him cut back on his hours while he recovered. This was an eminently reasonable request, under the circumstances, and a reasonable manager would not have hesitated for a moment before granting it.

          However, Pimlico Plumbers was not a reasonable manager. Instead of allowing him to cut back on his hours, and conti

    • by cardpuncher ( 713057 ) on Friday June 15, 2018 @02:35AM (#56788510)

      The court decided he was a "worker" - that's an intermediate category between being employed and self-employed. You'd think the categories would be aligned for the purposes of employment law and tax law, but that would be too easy...

      HMRC are coming after people who were operating through service companies (and paid themselves mostly in dividends therefore avoiding NI altogether). but self-employed people now pay a substantially similar level of NI to the employed for the services they receive (given that they don't get unemployment benefit, for example) so there would be little benefit in trying to make a case.

    • Re: (Score:2, Informative)

      by Anonymous Coward

      Depends how much he earned; his employer would certainly be on the hook for a bill. Assuming the median wage of about 24k a year:

      EMPLOYEE:
      Gross Income: £24k (Employer also pays £2k in NI)
      Income Tax: £2.5k (20% of above £12k)
      Employee NI: £1.9 (12% Class 1 NI above £8k)
      Total tax paid: 6.4
      Employee Net: 19.6

      CONTRACTOR:
      Gross income: £24k ("Customer" pays no NI)
      Income Tax: £2.5k (20% of above £12k)
      Employee NI: £2 (9% Class 4 NI above £8k, plus

      • Does a "contractor" get similar tax advantages as the US for deducting costs? In the US, that can be up to 50% of income that isn't taxed (if you know how to play the game).

        • Does a "contractor" get similar tax advantages as the US for deducting costs?

          If you are a true 1099 contractor, then absolutely YES!!

          I find it is best to incorporate yourself, be a company of one....and do your 1099 work corp-to-corp.

          You can write off a lot of things, very legally with no need whatsoever to push the boundaries of what might be shady or illegal.

          IN fact, that is one of the very good reasons to work contracting.

          However, it comes with a good deal of responsibilities...you have to pay month

      • Comment removed based on user account deletion
    • but those calculations would have factored into Uber's pay offering too. If Uber knows their employees get a tax advantage then they're smart enough to know they can offer less pay with the understanding that the lower pay gets made up in the backend when the employee files for taxes. In America we see this with Walmart paying their employees so little they qualify for food stamps (and in America if you qualify for food stamps you _really_ need them, we're kinda petty about who qualifies).
      • by Strider- ( 39683 )

        And herein is why someone working for Uber and the like is not a contractor. They do not have the ability to negotiate the level of compensation. It's take it or leave it on Uber's part, with no room for negotiation.

  • by overnight_failure ( 1032886 ) on Friday June 15, 2018 @01:46AM (#56788406)
    Depends which lawyers you speak to I guess. How about this opinion from another employment lawyer:

    Alan Lewis, employment partner at law firm Irwin Mitchell said the decision was not a "game changer" and that cases would continue to be argued on their specific facts and, for businesses that rely on self employed contracts, that means further uncertainty.

    "This decision is not necessarily a win for 'gig economy' workers seeking to challenge their employment status."

    Pimlico Plumbers does "not operate a gig model and the implications for Uber, City Sprint, Deliveroo etc may be limited, although the publicity around this case may encourage other 'self employed' contractors to challenge their legal status," added Mr Lewis.


    Source: https://www.bbc.co.uk/news/bus... [bbc.co.uk]
    • by Sique ( 173459 ) on Friday June 15, 2018 @02:37AM (#56788512) Homepage
      I don't know for the UK, but in other countries, the question of self employment or not depends on who is your largest customer, and if this customer demands priority services or other exclusivity, limiting your ability to search for other contracts. If your ability to independently decide which assignment to take is severly limited by your largest customer, and your income strongly depends on his jobs, then you are in fact employed and not a free agent.
      • by mikael ( 484 ) on Friday June 15, 2018 @05:57AM (#56788852)

        For the UK, HMRC look to see whether an individual is an "employee in disguise". Do they work at the customers premises. Does the company provide tools. Does the individual work his own hours? Does the individual service multiple clients?

        In this case, the plumbing company provided the van, the tools and customer bookings, plus require the individual works a minimum number of hours.

      • by AmiMoJo ( 196126 )

        That's basically how it is here. If Uber assigns you work, tells you where to go and when, sets your fares and monitors your performance then they are your employer.

        • How can uber not set your fares? Do contractors decide how much they want to be paid each day in the UK ?

          Today, my salary will be one million quids!

      • I don't know for the UK, but in other countries, the question of self employment or not depends on who is your largest customer, and if this customer demands priority services or other exclusivity, limiting your ability to search for other contracts. If your ability to independently decide which assignment to take is severly limited by your largest customer, and your income strongly depends on his jobs, then you are in fact employed and not a free agent.

        Agreed. And that means that Uber drivers cannot be employees because they always have the option to turn off the Uber app on their phone and do something else. They're not compelled to do anything. It's so far from actual employment that it's barely even similar.

        • There is a whole list of things which can categorise you as an employee, just because you can turn off the app doesn't mean you don't count under other criteria.

    • Exactly, it's down to the facts. In such 'self employed' arrangements it comes down to what contracts were in place and questions such as what freedom the worker has to send someone else etc to determine whether they should be classed as truly self employed or not.
    • Considering it's in the best interests of an employment lawyer for there to be as much employment litigation as possible that's a pretty predictable statement to make. Precedent, which this makes, has a pretty huge impact on how court cases go and most companies and individuals don't just try to take every grievance to court, they make an assessment of their chances before they make that decision and precedent is obviously a factor in that assessment.

      Sure, precedent won't stop a particular type of case f
    • by PPH ( 736903 )

      Depends which lawyers you speak to I guess. How about this opinion from another employment lawyer:

      I wonder how many billable hours that partner charged for that opinion. It's interesting to note that high value professional workers (attorneys, engineers, doctors) tend to want to be sole proprietors, partners, etc. Anything but employees. It's the bottom tiers of the labor force that want to be classified as employees.

  • by serviscope_minor ( 664417 ) on Friday June 15, 2018 @02:50AM (#56788530) Journal

    The main thing I knew about Pimlico plumbers is they have the most incredible Christmas decorations which you can see from the Waterloo mainline (left hand side as you're leaving London).

    Shame to hear that they've been a bunch of wankers.

  • by ConfusedVorlon ( 657247 ) on Friday June 15, 2018 @02:56AM (#56788544) Homepage

    Key facts in this case
    - He had to work 5 days a week for a minimum of 40 hours
    - He had to wear the company uniform and drive a company-logo van
    - He couldn't send someone else to do the work (substitution) (although under limited circumstances a different pimlico employee could do work)
    - There were significant limitations on his ability to work for other people or competitors

    the courts basically looked at this and said; Yup - he looks an awful lot like an employee rather than an independent self-employed person.

    More generally, the way the contract was written shows that Pimlico were trying to present to customers that the plumbers were employees, whilst making the plumbers not employees so that they could limit tax and avoid certain obligations. The UK courts are getting increasingly vociferous in saying that this is not ok.

    http://www.bailii.org/uk/cases... [bailii.org]

    • by JBMcB ( 73720 )

      Key facts in this case
      - He had to work 5 days a week for a minimum of 40 hours
      - He had to wear the company uniform and drive a company-logo van
      - He couldn't send someone else to do the work (substitution) (although under limited circumstances a different pimlico employee could do work)
      - There were significant limitations on his ability to work for other people or competitors

      That's interesting, and probably shields some gig-economy companies from similar rulings. For regular Uber, at least:

      1. You work whenever you want, as much as you want
      2. You don't have to wear a uniform (but I think you need to put an Uber sign in your window when you are driving)
      3. You can do whatever else you like when you aren't working for Uber.

      The "sending someone else" thing doens't apply in this case, I think, because you are accepting fares from requests, nobody is ordering you to take a fare.

      • Actually, Uber punishes drivers for refusing fares. And they're not allowed to negotiate the price.

        Uber has lost a key legal battle in the UK after a London tribunal upheld a ruling that the ride-hailing app must treat its drivers as “workers” entitled to the minimum wage and holiday pay.

        Here's a list of criteria for self employment:

        * Ultimate control of the work. A self-employed person should exercise independent control and judgement over how the work is carried out i.e. the means and methods
        *

  • I would have thought this was basic IR35 stuff. if you do work only for one employer, wether via a shell "service" company or not, then you are not an independent contractor you are an employee, and all the standard payroll taxes and procedures apply.

    • by Cederic ( 9623 )

      Six years with the company goes way beyond a standard independent contractor gig. He'll be lucky if the Inland Revenue don't invite him to hand over far more than he picks up from the company.

  • I keep pointing out that Uber could fix this.

    It would cost about $12 million for every Uber contractor to incorporate into a contracting company, and then contract their employees services to Uber.

    They all become employees... of the contracting company that they own, not of Uber.

    • by jabuzz ( 182671 ) on Friday June 15, 2018 @04:36AM (#56788718) Homepage

      Yeah that won't work in the UK. The government became wise to that years ago.

  • "Fake Self-Employment" is already a law in Germany for decades. If you match certain criterias like "working just for one customer who also gives yu all your orders and tells you what to do" then you are automatically declared "fake self-employed" and your employer has to treat you as employee with all the benefits

    • Here in the US, each state has tax laws that basically state that if someone works full time for a year, it constitutes "nexus". That means that the company is established in that state and is bound to obey tax and other laws in that particular state.

      The real issue is enforcement. I imagine most places have all kinds of laws that negate the benefits of "fake self employment" but if they are not uniformly imposed, corruption takes root.
      • by PPH ( 736903 )

        if someone works full time for a year

        For a single employer.

        Solution: Make sure you have more then one client. This may be a problem if one of your customers needs you for a critical project. But that trigger is creeping up and you've got to take 6 months and go work for his competitor. Too bad. We'll just see who gets their product to the market first.

  • I've seen several things criticizing Uber for not having PTO, benefits, etc. I've always wondered exactly how people want that treated. Do they mean that for every single person at Uber? Or does it require 30+ hours a week every week of the year? Because I know several Uber drivers just do it 1-2 days a week, sometimes they take a break, etc. How would PTO work out for someone who just does 3-6 hours a week? Benefits, etc? Would it be a situation where Uber would have to make them employees once they
    • Here in the UK every single employee is entitled to 5.6 weeks pro rata holiday pay no matter how few hours they work. In the case of someone who works different hours every week the way holiday pay is calculated is as an average of the previous 12 weeks replacing any week where no work was done with one that was so for example if in the last 12 weeks you had a week with no pay you would include the week prior to this 12 week period in the calculation. Every employee is also entitled to a workplace pension a
      • by PPH ( 736903 )

        This would prompt employers to hire fewer employees and work them full time. To keep the benefits cost down. This is good if you want to be an employee, but bad if you wanted short hours, flexible work.

        • No because it's pro rated. If you work one day per week and are entitled to 5.6 weeks off, then you get about five and half days off.

          You multiply the number of hours worked per week by 5.6 weeks to work out the number of hours paid leave.

    • Well, for instance, the people buying/leasing a car through Uber could easily be classified as employees. Uber and Lyft each have bonus structures around driving during rush hours (so less than 30 hours per week, but giving N rides during rush hours that involve being on the road for the entire time). People who want to Uber for a living make sure to hit those bonuses. Those people are de facto employees.

      The problem is, any rules we put down will be gamed by Uber (since they don't want an employee). So

      • The problem is, any rules we put down will be gamed by Uber (since they don't want an employee).

        "Gamed" meaning Uber will comply with the law and alter the driver agreements as needed to maintain their status as contractors. So then the government will change the law again to try to catch Uber out.

        This is about government trying to all but eliminate individuals working for themselves as independents. Controlling people is made much harder when government can't simply go to a person's employer and 'suggest' they could see costly legal/regulatory problems in the near future if person 'X' is not fired be

        • "Gamed" meaning Uber will comply with the law and alter the driver agreements as needed to maintain their status as contractors.

          Yes, that's precisely what I mean. Avoiding Uber technically complying while violating the intent of the rules.

          This is about government trying to all but eliminate individuals working for themselves as independents. Controlling people [by threatening that tehy get fired]

          That's just stupid paranoid bullshit. First, it's no easier to get someone fired than to suggest Uber delist th

          • Avoiding Uber technically complying while violating the intent of the rules.

            Ah I see, when Uber violates the law they're bad, and when they comply with the law they're even worse.

            The rest of your post is just hand-waving, strawmen, and attempting to take the high moral ground and not worth the time & trouble to bother refuting as those with less bias will see it for what it is while the kool-ade drinkers will never concede anything.

            Enjoy your UK police-state.

            Strat

        • I don't get it. Both the_donald and /pol/ exist for you fucking nut-job libertarian Trumpanzee shitlords, why do you have to come here and shit up our tech forum?

  • by TJHook3r ( 4699685 ) on Friday June 15, 2018 @06:49AM (#56788974)
    British plumbers are notorious for high prices and bum cleavage. I'm hoping that Uber don't adopt either of those!
    • That's why the Brits use Polish plumbers -- might be drunkards but can tell a pipe from their ass. Any who couldn't stayed in Poland.

    • You only get to see the builders bum if they actually turn up, something the great British plumber is notorious for not doing. Then there's the endless cups of tea and sucking air through the teeth before telling you it's going to be expensive, mate.

      • by mi ( 197448 )

        Viva la employee-protections, mate!

        • Viva la employee-protections, mate!

          Certianly. We tried not having them a while back. It worked great for some people, but not the majority. We're trying a different way now and it seems to be better.

          • by mi ( 197448 )

            Well, you've already admitted — in an unguarded moment of levity — that it is not better. Now you are back to the party line...

    • British plumbers are notorious for high prices and bum cleavage.

      High prices? You obviously haven't employed a plumber in California.

      As for the bum cleavage: to each his (or her) own.

  • For some reason they never seem to effect Uber. They've consistently won despite all evidence. They're the Donald Trump of companies and in more ways than one.
  • It should be up to the Company and the employee to decide what kind of relationship they want to engage in. I don't want the govt to tell me if I am a worker or a freelancer/contractor.
  • UK tax and employment law recognises three classes of person working in or for a company:
    a) Employee (full right to benefits , holidays, pension etc by law)
    b) "Worker" (gets some rights of employee, but not all of them)
    c) "Self employed" (no rights , has unlimited personal liability for tax and events)
    d) "Limited Company" (one man incorporation) (No rights, but only monies paid up as shares on incorporation and residual retained profits can be at risk) Thus no personal liability and house etc and

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