Purplebricks says there is no basis for a class action legal case over the way it treated self-employed agents which it is claimed could start this month.
Contractors for Justice (C4J) is currently pursuing a proposed Group Litigation Order (GLO) against Purplebricks, on behalf of former agents that were hired as self-employed estate agents by the company.
The premise of the claim is that, in law, these self-employed agents were in effect employed for the purposes of holiday pay and pension contributions being owed by the company to the individual. The claim is for as much as 20.7% of each person’s total earnings.
But Purplebricks has told EYE: “We have always taken legal advice in regards to our model – and the advice is very clear that there is no legal basis for this potential action. The service we offer our customers is completely unaffected.”
C4J claims that it now has enough claimants with which to trigger the legal process against Purplebricks. Claimants now number in the hundreds and the current cohort will be ‘sealed’ and pre-action papers submitted to the courts from 14 December.
The pressure group says that any potential claimants that are considering joining the action have until midnight on 14th December to submit their intention to proceed via the C4J website here.
Each individual submission is anonymous and is accepted on a no win-no fee basis. If the claim is not successful, there will be no legal fees to pay. There are two choices of fee deal for each claimant with a percentage of any win being paid to C4J on such success.
Individual claims could be worth tens of thousands of pounds.
C4J spokesman Peter Fletcher is amazed at the take up.
He said: “From the day that we announced that we were supporting formerly self-employed estate agents in a claim to recompense their holiday pay and statutory pension contributions, my team have been inundated with interest from hundreds upon hundreds of Purplebricks agents in particular’.
“Our case is clear. Companies that masquerade their staff as self-employed in order to save themselves huge sums in employment costs will end up simply funnelling that cash back to the individuals that have lost out by being part of such schemes’.
“We are now full to the brim with potential claimants and will be shutting the door on this first cohort of petitioners on 14th December. It’s possible that there will be a second cohort at some point in the future but far from certain that this will be possible or needed.”
Purplebricks faces legal action from agents over holiday and pension pay
Comments (16)
For what’s its worth, the few years I had with Pb were brilliant. My clients were very happy, the earnings and lifestyle were well worth it. I’ve joined the class action only because of the way we were all treated in the final two weeks of August. Originally, Pb’s transparency to clients was fantastic. I had never witnessed the like in nearly 30 years of agency and I’ve been around a bit! If nothing else, it gives them a b loody nose and that’s good enough for me.
Translation: “Hey – I loved every minute except the last one. So I’ve jumped on the compo bandwagon… why not!”
This single post should be used as Purplebricks’ sole angle of defence against the lot of you.
Didn’t expect PB to say anything different. The fact is the whole employment landscape is changing and there is another case Stuart Deliver v Augustine which was recently heard by the Court of Appeal (Oct 21), which firmly puts another nail in PB’s coffin. They can spin any yarn they wish, but the facts are facts and the courts will eventually confirm that their TO’s and the like, were workers for the purpose of these claims.
Very conflicted on this matter – Purplebricks we’re the first to sell the dream of freedom/work life balance/greater earnings/ your own business all of which is based solely on being self employed. If you want those things and accept those terms you surely give up a fixed salary/pension contributions/company car and essentially security as a whole? You can’t go and ask for your money back when it goes south, and I do hope this serves as a message to all those attracted to the current Keller Williams, EXp, partnership offerings who skate very close to over doing the PR now in order to earn recruitment bonuses. All of that said, the confliction comes from genuinely seeing PB as the scourge of our industry, I feel for any client caught up in a chain with them, and kind of hope this action signals the death knell as the industry will be in a far better place without their awful service levels. Any business that has bought clients and not earned them has to go pop at some point.
If successful, and that is a big if, should any award consider the commission deal that was applied at the time, my thinking being that the remuneration package would have reflected the employment status the parties understood it to be at the time.
Not being privy to the new remuneration package, but, I believe it is less now that they are employed rather than self-employed.
Assuming they win, the limitation period for tax affairs is 20 years. Those who paid corporation tax on their profits and claimed back VAT on purchases that were not claimable by PAYE employees might find themselves unpicking a wonderfully complex tax investigation and then suddenly there is higher rate tax to pay on earnings and an unholy mess with the VAT man
Good luck everyone involved but my advice is don’t listen too closely to anyone who might be envious and resentful of what Michael and Kenny achieved. The solicitors will tell you you have a strong case as will the green eyed devil on your shoulder but the case alone will have to consider if those claiming were duped victims or complicit in an attempt to deceive.
I can’t see this ending well even if they win
If HMRC do investigate LPE’s, would they limit such investigations to only those involved in the class action! I doubt it; as such, it would seem to be in the best interest for all who have been self-employed LPE’s to be involved in the class action, whether they agree with the action or not.
Best try and get some recompense, if possible, to put aside for future tax liability.
Interesting point, someone has opened Pandoras’ box and potentially dropped everyone in it. If the few who who’ve been whizzed into frenzy to fight win. That could work very much against those who’ve put this all behind them and moved on.
Out of interest who is picking up the legal bill for the action?
I’m not sure the compo would come anywhere near covering the tax liability for all LPE’s who could be affected by this. HMRC would have first dibs on missing NI contributions, then there’s likely to be a sizeable lawyers bill, then there’s claimant’s legals costs and all that’s ahead of oooooew ang, there’s nowt left.
Me personally I’d treat it as a life lesson
Robert – Employment Law and Tax Law are not joined at the hip. Employment Law has created a new term called Worker which the Taxes Act does not define. What the Employment Tribunals are saying is you can still be self-employed for tax purposes but you are entitled to receive workers rights
I appreciate that but how does that help people who set up LTD firms so they were officers of a company not employees specifically to avoid working time regulation, national insurance and all the other constraints of employment and enjoy the benefits of lower taxes and claimable expenses?
Perhaps I’ve not understood there are two sets of ‘not staff’ here, some knowingly going with flow and some coerced, duped and disadvantaged.
I guess we’ll see, it will ALL come out in the wash (unintended consequences included)
“Out of interest who is picking up the legal bill for the action?”
Article stated:- Each individual submission is anonymous and is accepted on a no win-no fee basis. If the claim is not successful, there will be no legal fees to pay. There are two choices of fee deal for each claimant with a percentage of any win being paid to C4J on such success.
Why not simply charge them an upfront fee and pay nothing upon completion of the action, is this not what LPE’s better understand!
I had a look back at some of the posts made when questions over working time regulations, holiday pay, national insurance contributions were first asked, there were some very confident posts about how great it was being self employed earning upwards of £95k etc
I’m not sure how those people who knowingly contracted to a single, exclusive customer and set up LTD companies to do so can make a legitimate claim against Purplebricks.
The weight of evidence that people fully understood the basis of not being an employee is extensive.
If those who were asked to clarify the matter at the time had done so a lot of cost and distress on both sides could have been avoided. I suspect this might just backfire on those people making the claim as HMRC will likely look in detail at every record and every invoice.
They promised to protect deposits too. I don’t think they would do anything other than issue a denial. Better to have said nothing.
No showing of remorse, so if they lose then the damages should be doubled – the same with criminal sanctions in law generally, they should be doubled if someone pleads not guilty and is then found guilty.
They also said they were “proper Estate Agents” and we all know what a crock of **** that is!
Well I was hoping for a Like-v- Not Like score to rival that of our England Ladies footy team… but the opposition seem to have netted one on the counter.