UK plumber Gary Smith has won his case against his former employer Pimlico Plumbers in the Supreme Court, which rejected the company’s contention that Smith had been self-employed and upheld his claim to basic workers’ rights like paid leave, Jo Faragher reports at Personnel Today:
Smith’s case against Pimlico Plumbers, which has been running since 2011, is the latest in a long line of legal challenges on employment status, and “is in line with a number of recent decisions relating to gig economy workers”, according to Jeremy Coy, an associate in the employment team at law firm Russell-Cooke.
He said: “The judgment of the UK’s highest court underlines the point that simply labelling workers ‘self-employed’ does not guarantee the corresponding legal status. The nature of the relationship and the degree of bargaining power and obligation between the parties is crucial in determining workers’ rights.”
Smith had prevailed in the Court of Appeal last year, but Pimlico challenged that ruling in the high court, which took up the case in February. The company considered Smith a self-employed independent contractor, and he was described as such in his agreement with Pimlico and in his tax filings. Smith did not claim to be an “employee” of the company, but rather a “worker”—a designation specific to UK law that falls between “employee” and “contractor” and entitles an individual to certain rights like a minimum wage and paid annual leave. The Court of Appeal had ruled in Smith’s favor largely on the basis that his contract with Pimlico required him to provide his services personally, such that he could not re-subcontract the work out to someone else.
In ruling for Smith, however, the Supreme Court stressed that its decision rested on the unique facts of the case and did not establish any new legal guidelines for employers to follow in determining whether they could safely classify workers as self-employed, much to the dismay of UK employers and their attorneys:
Amazon has become the latest company to draw fire from labor advocates in the UK over alleged mistreatment of independent contractors: The GMB, a general trade union representing a wide swath of the British workforce, announced on Monday that it was suing three delivery companies that contract with Amazon to fulfill orders in the UK: Prospect Commercials Limited, Box Group Limited and Lloyd Link Logistics Limited. The union alleges that delivery drivers working for these companies were incorrectly classified as self-employed, denied statutory rights as employees, compelled to work unsafely long hours, docked pay for failing to meet impossible quotas, and in some cases retaliated against after raising concerns about their conditions.
The claimants all worked for the companies as couriers, delivering parcels for Amazon. GMB say the drivers were employees, and the companies used the bogus self- employment model to wrongly deny them employment rights such as the national minimum wage and holiday pay. The drivers were required to attend scheduled shifts that were controlled by Amazon, meaning they did not have the flexibility that is integral to being self-employed. In this situation, the couriers were treated like employees in terms of their working hours, GMB Union contends they should be treated as employees in terms of their rights too.
Two of the members are also claiming that they were dismissed because of whistleblowing, saying that their roles were terminated because they raised concerns about working practices[.] … These whistleblowing claims are also being brought directly against Amazon on the basis that it was Amazon who determined the way that the drivers should work.
Tim Roache, general secretary of the GMB, tells TechCrunch’s Natasha Lomas that the union considers it “absolutely galling” that Amazon subjects these workers to “unrealistic targets, slogging their guts out only to have deductions made from their pay when those targets aren’t met and being told they’re self-employed without the freedom that affords.” Amazon, for its part, said in a statement to TechCrunch that the practices alleged in this lawsuit are not representative of the dozens of contractors the e-commerce giant uses to provide delivery services in the country:
The UK’s Employment Appeal Tribunal ruled last week in favor of a bicycle courier working for Addison Lee who sued claiming that the taxi and courier company had incorrectly classified him as a self-employed contractor rather than an employee, Jo Faragher reported at Personnel Today:
The Independent Workers’ Union of Great Britain (IWGB) represented Christopher Gascoigne, who first took the taxi and courier firm to an employment tribunal last August. … The tribunal heard that Gascoigne had to re-sign his contract every three months, terms of which included: “You agree that you are an independent contractor and that nothing in this agreement shall render you an employee, worker, agent or partner of Addison Lee and you shall not hold yourself out as such.”
In dismissing Addison Lee’s appeal against Gascoigne’s claim, the EAT referred to the fact that Gascoigne had claimed he could get into a “tricky situation” for not accepting a job, and that his location was often tightly controlled so he was well placed for future deliveries during the day.
Gascoigne’s successful suit is the latest in a series of decisions to come out of the tribunal system against gig economy companies with businesses built on the contractor model, beginning with a ruling for Uber drivers in 2016 and for another bike courier for CitySprint in January 2017. Uber lost its appeal of the 2016 ruling last November, though the company said it would appeal again to higher courts, including the Court of Appeals and the Supreme Court. The Supreme Court is currently hearing an appeal by Pimlico Plumbers, which had lost a case brought against them in which one of their former plumbers was deemed a worker (a classification in UK law with more rights than “contractors” but fewer than “employees”), not self-employed.
In a ruling handed down on Monday, the California Supreme Court found in favor of drivers for the last-mile delivery service company Dynamex, who claimed to have been misclassified by the company as independent contractors when they were really its employees. Gizmodo’s Brian Menegus outlines the facts at issue in the lawsuit, first filed in 2005:
Starting in 2004, drivers were required to provide their own vehicles—and pay for all the incurred costs that came with that, like gas, maintenance, insurance, and tolls—while being “generally expected to wear Dynamex shirts and badges […] and/or the customer’s decals to their vehicles when making deliveries for the customer.” … They were converted from employees to this new, more precarious classification “after management concluded that such a conversion would generate economic savings for the company,” the ruling states, creating a deeply lopsided power dynamic.
The court’s decision will have far-reaching consequences, as it ruled not only on the merits of these drivers’ complaint, but also on the manner in which the distinction between employees and contractors should be drawn. The judges significantly reinterpreted their predecessors’ ruling in the 1989 case of S. G. Borello & Sons, Inc. v Dept. of Industrial Relations, which had historically been cited as establishing a standard for classifying workers as contractors based largely on the degree of control a company exercised over their work. The court instead favored the “ABC” standard used in other jurisdictions like Massachusetts and New Jersey, which treats workers as contractors only under the following conditions:
The UK government has issued a series of policy proposals designed to bolster the rights of workers in the country, hinting at new legislation on how workers are classified as employees or contractors, new rights for agency workers, and updated minimum wage and living wage policies, Emily Burt reported at People Management last week:
The government said it would look to amend the Agency Workers Regulations 2010 to remove the opt-out for equal pay, preventing organisations from recruiting workers on extended agency contracts that keep them on low pay through the ‘Swedish derogation’ loophole for businesses recruiting through agencies. This followed a recent report into agency workers, published in March by the TUC, which found that six in 10 agency workers were employed for more than a year in the same role at the same workplace, driving pay levels down. …
The government responded to calls by MPs to bolster the position of precarious workers by exploring a pilot of a pay premium to the national minimum wage and national living wage for workers on non-contracted hours, assisted by the Low Pay Commission.
The proposals come less than a year after the Independent Review of Employment Practices in the Modern Economy, led by Matthew Taylor, a former advisor to Tony Blair, released its findings and recommendations on how regulators should handle the gig economy. In its proposals last week, the government adopted some of these recommendations and indicated that it was considering others:
A year ago, UK plumber Gary Smith won a case in the Court of Appeal against Pimlico Plumbers, where he had worked for six years and from which he contended he was unfairly dismissed after seeking to reduce his hours. Pimlico considered Smith a self-employed independent contractor and contended it had no obligations to him as an employee. The Court of Appeal accepted that he was not an employee, but ruled that he was properly classified as a worker, entitling him to some (but not all) the rights enjoyed by regular employees, such as holiday and sick pay.
The company chose to appeal that ruling further, and on Tuesday, the UK Supreme Court began hearing arguments in the case, the BBC reports:
The case hinges on the distinction between Mr Smith’s status as either a self-employed contractor, or a worker for the company. He was VAT-registered and paying tax on a self-employed basis, but worked solely for Pimlico Plumbers. After he suffered a heart attack in 2010, Mr Smith, from Kent, wanted to work three days a week rather than five. Pimlico refused his request and took away his branded van, which he had hired. He claims he was dismissed. …
[Charlie] Mullins, the founder of London-based Pimlico Plumbers, says that plumbers were hired on the basis that they were self-employed, provided their own materials and did not have workers’ benefits, but were paid significantly more as a result. He argues that the case has nothing to do with the gig economy and that Mr Smith is not in the same as an Uber driver.
The Trump administration and the Republican leadership in the US Congress intend to take up the issue of the gig economy this spring and propose labor law reforms to address the unique circumstances of this segment of the workforce, Sean Higgins reports at the Washington Examiner:
The big issue: When do workers for those companies stop being contractors and become employees? Business groups are eager to limit those circumstances, which the Obama administration and court rulings have chipped away at. The Trump [administration] will offer its take when the Bureau of Labor Statistics publishes its Contingent Worker Survey in the spring that will offer new data on workers doing short-term, nonsalaried “gig” jobs. …
A source in the Labor Department who requested anonymity said the study probably will be published in April. It will become a springboard for legislation to clarify a host of issues, including potentially the most controversial one: the contractor-or-employee issue. … The Trump administration has been tight-lipped on its plans, saying only that it wants to modernize the rules.
The Contingent Worker Supplement to the Current Population Survey was reintroduced during the Obama administration by former Labor Secretary Tom Perez in January 2016. Independent estimates of the size of the alternative workforce in the US vary dramatically, whereas the dearth of official data has limited policy makers’ ability to address the challenges created by the advent of the gig economy.
Speaking at an event in October, Labor Secretary Alexander Acosta expressed support for overhauling US employment laws to account for the advent of the gig economy and the changing relationship between workers and employers. The government needs to “keep pace with the pace of change in the private sector” and “re-examine the rules that regulate the employer-employee relationships that have an impact on the ability of individuals to work in a modern system,” Acosta said.