Pimlico Plumbers and other employment status news

Late last month the Supreme Court delivered its long-awaited if not altogether surprising decision in Pimlico Plumbers v Smith. It upheld the decisions of the lower courts that Mr Smith should properly be classified as a worker, with attendant rights (including discrimination rights and holiday pay), rather than being self-employed.

Gary Smith worked for Pimlico Plumbers for six years (from 2005-2011). Although he was VAT registered and paid self-employed tax, from an employment law perspective, he was nonetheless entitled to workers’ rights.

The judgment was unanimous and the lead judgment was provided by Lord Wilson. Having considered the history of the law concerning the status of workers (dating back to 1875), he considered the written agreements between Pimlico and Mr Smith (the original dated 2005 and a replacement issued in 2009), both of which he thought were confusing. However, he noted the extent of control exercised over Mr Smith including the right to dismiss him for gross misconduct, how he should provide his services, an obligation to provide advance notification of absences and the supply of tools. The second agreement included an obligation to wear Pimlico’s uniform, a minimum 40 hours’ working week, advance notice of annual leave and provision for warnings and dismissal.

He also noted that there was no provision for Mr Smith to appoint a substitute to do his work (other than by another Pimlico operative). Having considered relevant authorities, he concluded that “the dominant feature of Mr Smith’s contracts with Pimlico was an obligation of personal performance”.

There was an “umbrella contract” between Mr Smith and Pimlico whereby, if work was available to be done by him, he would be expected to do it. Nonetheless, Mr Smith correctly presented himself as self-employed for tax purposes.

Equal pay at the BBC

Eddie MairFollowing last year’s widely publicised equal pay audit at the BBC, there has been a good deal of concern expressed about the disparities between the earnings of some of the Corporation’s best known presenters.

The BBC’s former China editor, Carrie Gracie, complained that the male Middle East and North America editors, Jeremy Bowen and Jon Sopel, were earning at least 50% more than her. Her complaint attracted national newspaper coverage and widespread support from her colleagues. Last month the BBC backed down, apologised to her for underpaying her and said it had “now put this right” by giving her back pay. Ms Gracie donated the back pay to the Fawcett Society, which campaigns for women’s rights.

She had refused a £45,000 pay rise because this still left “a big gap” between her and her male counterparts and her objective was to secure equality. She will now, at her request, take six months’ unpaid leave. What struck me as odd about the matter is that the jobs were regarded as equal in the first place. It is undeniably the case that, over many years, the Middle East and North America editors have had a much higher profile than the China editor, whether male or female. Perhaps the most stark disparity between the jobs is the amount of significant news coverage emanating from the different locations. However, the crucial difference in this case was that, when accepting the appointment, Ms Gracie was told that her pay would be “on a par” with that of the North America editor. It turned out that he was in a bracket of £200,000 to £250,000, whereas she was paid £135,000 (Jeremy Bowen was in a bracket of £150,000 to £199,000).

Following Ms Gracie’s resignation last January, a number of well-known male presenters, including John Humphrys, Jeremy Vine, Nick Robinson, Huw Edwards and Jon Sopel, agreed to take pay cuts as part of a move to harmonise salaries.

However, one who notably refused to do so was the presenter of BBC Radio 4’s PM programme, Eddie Mair.

DPD relaxes onerous terms imposed on its delivery drivers

A year ago I wrote about the onerous terms imposed on DPD couriers, which had come to the attention of the Work and Pensions Select Committee:

“Meanwhile, it has emerged that DPD, which deliver parcels for Marks & Spencer, John Lewis and River Island, fines their couriers £150 per day if they cannot find cover when they are ill. This has resulted in drivers being forced to work when they are sick. The fine, which is described as “liquidated damages”, means that couriers who earn on average £200 a day, lose £350 if they cannot work through illness and are unable to find a substitute.”

Chair of the Committee (and my MP) Frank Field, commented at the time:

“The gig economy is producing wave after wave of evidence on the grim reality of life at the bottom of Britain’s labour market…A group of companies now controls the working lives of an unknown number of people, and yet evades its own responsibilities as employers and taxpayers by labelling those people as self-employed… This move [by DPD] makes the rest of the gig economy look as though it operates in the Garden of Eden.”

In February 2018 The Guardian reported the sad story of Don Lane, a DPD courier, who was fined £150 for attending a medical appointment to treat his diabetes and who, at age 53, subsequently collapsed and died for reasons connected with the disease. His widow, Ruth, disclosed that he had missed medical appointments because he felt under pressure to cover his round. He had collapsed twice, including once into a diabetic coma, while at the wheel of his DPD van. His fine was imposed when he went to see a specialist about eye damage caused by his diabetes. He collapsed in late December, having worked through illness during the Christmas rush and died in the Royal Bournemouth Hospital on 4 January.

More unrest at the BBC – now it’s about personal service contracts and a word of warning about the ostensibly self-employed

Perhaps the most surprising aspect of “employment” provided through personal service companies is that such arrangements have lasted as long as they have.

When the BBC first published the salaries of its top presenters last year there were some notable omissions. For example David Dimbleby didn’t appear on the list. Why? Because he is paid by the BBC through a separate production company. Similar arrangements are in place for Lord Alan Sugar, John Torode and Gregg Wallace.

For years the BBC has encouraged and, some have argued, mandated some of their key talent to be paid through a personal service company. The idea is that the company provides the services of, say, the presenter to the BBC and the BBC therefore pays the company for the services provided. The upshot is that the presenter benefits from the lower tax regime for limited companies (currently 20%) rather than the higher personal tax rates of 40% over £45,000 and 45% over £150,000.

Unsurprisingly, HMRC have been chipping away at such arrangements for a number of years and, as far as the BBC is concerned, matters recently came to a head with a victory in the High Court against BBC Look North presenter Christa Ackroyd. Ms Ackroyd was sacked by the BBC in 2013 after HMRC demanded unpaid taxes from her on the basis that she was, in reality, an employee of the BBC and therefore required to be taxed under Schedule E. Her HMRC appeal was unsuccessful and she is now facing a bill for £419,151 in back taxes, plus undisclosed legal costs. An HMRC spokesman reiterated their long held view that “employment status is never a matter of choice…It is always dictated by the facts and when the wrong tax is being paid we put things right”.

You may take the view that Ms Ackroyd had tried it on and been caught out but, as is so often the case, it is by no means that straightforward and the BBC is very much under scrutiny as a result of its actions.

Voluntary overtime included within holiday pay: freely given time isn’t free!

The Employment Appeal Tribunal (EAT), the Tribunal which hears appeals from the regular Employment Tribunal, has recently confirmed that regular payments for overtime incurred voluntarily by employees should be taken into account when calculating an employee’s allowance of 20 days of holiday pay (this is the statutory minimum amount of holiday leave outside of the…

European Court of Justice gives OPINION on unpaid and untaken holidays

Does a worker’s holiday entitlement continue to accrue into successive years if they do not take their annual leave because their employer will not pay them for these holidays? The Advocate General at the European Court of Justice (ECJ) has answered ‘yes’ to this question, in a non-binding opinion. In the case of King v…

Do employees have to disclose their intention to compete?

In the case of MPT Group Ltd v Peel and others [2017] EWHC 1222 (Ch), the High Court was asked to decide whether employees were under a duty to disclose their intention to compete to their employer. The facts of the case were that Mr Peel and Mr Birtwistle were employed by MPT Group Ltd…

Deliveroo makes changes to contracts for UK Couriers

Following on from my colleague Martin Malone’s article back in March, takeaway delivery Company Deliveroo have now removed the clause in their self-employed courier’s contracts (or ‘supplier agreements’), which stated that the couriers would not be permitted to challenge their self-employed status at an Employment Tribunal. New contracts (which are now just four pages long)…