The boss of Pimlico Plumbers sounds quite embittered about the recent court ruling that found against him. The employee is victorious. The government silent, and that silence is a scandal in itself.
What has Theresa May to say, since she claims to be the champion of those who are maltreated by the powerful? Philip Hammond should also explain his view, because this isn’t just a story of employment rules, it’s also a story of tax revenue loss on a gigantic scale. Some £4bn a year, no less.
In this case, the company argument was that both sides agreed to the terms of the contract. However, the court ruled that the contract was unfair, as it created terms of employment, but gave the employee the status of self-employed. This was for the purposes of a tax advantage to Pimlico, and allowing the employer the flexibility to drop him at any time. In other words the contract was an agreement to avoid aspects of employment law. The court ruled that a company cannot pick and chose the laws they wish to follow.
In this case, the plumber was contracted to work 40 hours per week, drive a van with the company logo, and wear a company uniform. He was there for almost six years, so would have had employment protections, if he was an employee in law.
However, his self employed status could allow him to make deductions on his tax return. No doubt, many workers would happily have such a tax advantage. The company say he was waiving his employment rights and that they acted legally. They could sack him at any time. He claims this happened when he suffered a heart attack and asked for lower hours.
I myself work in the gig economy as a legal adviser, but the difference is that I work for lots of different companies, with no set hours, often in the middle of the night, sometimes going days without work, which is when I write these blogs. I am in business on my own account. The benefit of paying less tax is recompense for filling in the gaps in the industry I work for. I’m good for the economy. That why the law was constructed this way.
The problem is that when companies discovered a good way of ignoring elements of employment law, the culture of hire and fire filtered down to the low paid, with no advantage of low tax. This plumber may have a mortgage and foreign holidays, so may be a less extreme example of the gig economy gone wrong, but when the gig economy is applied to those on minimum wage, genuine poverty is the net result.
An additional problem is the loss of taxable income to the treasury. All the talk by George Osborne of reducing tax avoidance came to relatively little. Osborne was only concerned with the transparency of tax havens. This isn’t about the Cayman Islands. It’s about a government that is so slack that they allow companies to abuse the law, and they don’t lift a finger. The TUC estimate that £4bn a year is lost through employees paying tax through self assessment. Many of those employees have no idea of the consequences when it comes to their protections, if they fall ill, or some other circumstance befalls them.
It is the unions and the judiciary who are taking on this issue. It was Uber and City Sprint workers who pursued similar cases, and now a plumber. The government likes to make speeches about defending ordinary people, but they perpetuate the culture that allows certain abuses to continue.
When will this incompetent Tory government live up to their promise to protect the rights of ordinary people by enforcing the law properly? The answer is never. And their silence in the case of Pimlico Plumbers speaks volumes.