A legal ruling giving Uber drivers the right to be classed as employees has no implications for Purplebricks, the agent has told EYE.
Uber drivers, previously treated as self-employed, will now be entitled to the national living wage, holiday and sick pay, after an employment tribunal decision on Friday.
Uber insists that it does not give its drivers in England and Wales employee benefits because they are self-employed contractors who choose when and where to work.
At the tribunal, Judge Anthony Snelson accused the firm of using “twisted language and brand new terminology” in its contracts for workers.
The tribunal decision could mean that Uber drivers will be able to claim compensation for missed holiday and sick pay, plus back payments if they did not earn the living wage.
According to Citizens Advice, up to 460,000 people could be wrongly classified as self-employed, at a cost of £314m in lost tax and National Insurance contributions.
Uber is to appeal the ruling, which online agent Russell Quirk said could affect his competitors – those using self-employed Local Property Experts.
Quirk, founder of eMoov, said: “This is a monumental decision and will have implications that stretch far beyond Uber and its self-employed drivers.
“If it overlaps into the online estate agency sector, our competitors that choose to hire self-employed agents will feel the financial brunt of now having to unexpectedly pay out a national minimal wage, holiday pay, sickness pay and so on to hundreds of boots on the ground who currently live solely on the commission they make, or in some cases the money from other jobs that they do in-between.
“Our policy at eMoov is to fully employ our Local Property Directors, specifically from the property industry itself and with proper basic salaries, car allowances and incentives.
“In this way we ensure a genuine and wholehearted buy-in to our standards, our training and our culture from the team that value the homes of potential customers. And no legislative surprises that might wrong-foot our specific business model and which, fortunately, is differentiated from others in our space.”
By far the biggest agent to use self-employed Local Property Experts is Purplebricks, which said in August it was aiming for 300 in the near future.
Recruitment adverts for the roles have said that “many” of Purplebricks’ property professionals earn in excess of £95,000 a year.
Asked on Friday to comment on the Uber ruling, a Purplebricks spokesperson said: “We do not consider the ruling relating to Uber, which looks to be centred on issues such as low pay, has any implications for Purplebricks and our relationship with our Local Property Experts (LPEs).
“LPEs run their own independent business, engage and employ their own people, and as a result have become very successful business people, personally and professionally.”
Comments (11)
Anyone who has look at the legal issues with defining an employee will know that “HMRC own guidelines” are not the law and have been overridden at court. It does not help that there is no clear law defining what an employee is, just a collection test cases that are out of day with modem working methods.
Meter readers for example have been deemed to be self employed!
What we do know is that many organizations are right on the ridge of the legal definition of “employee”. It gets even more complex if each Purrplebricks “service providers” operates var their own limited company.
I am not expecting a test case over Purrplebricks, unless HMRC decides to bring one, as Trade Unions are unlikely to like Purrplebricks “service providers” , so are unlikely to fund the test case. It also needs someone that has lost out by not being classed as a employee, I expect that most Purrplebricks “service providers” grain more in reduced NI, then they lose in holiday pay.
What did the investors invest in? One of the Bruces promised to deliver £25 million profit for investors in 2015-2016 trading year (he delivered a loss of £12 million) Was the £25 million profit going to be £25m combined profits of 300 individual limited companies trading together as Purplebricks or was the £25million going to be separate profit earned by the firm the investors thought they were buying into?
It looks to me like the investors have been sold one thing but the tag along internet listers are operating a contradictory system.
If this is a pyramid scheme of sub firms working for sub firms that wasn’t made clear when to company was floated so it is important that it is now clarified what is going on. Is there a staff of people working together to make combined profits or have investors bought into a fragmented system designed to defeat employment legislation?
H’mmmm here again we have a PB spokesperson at odds with others in their organisation. It strikes me that no-one is control or knows what they are doing in that organisation, everything seems to be on a wing and a prayer so long as Kenny & Bruce make their money? Mud is starting to stick and they are getting a dreadful reputation? HMRC own guidelines makes LPE employee’s from the information that is circulating in the public domain recently and as such do not need own PI, CMP, Redress and yet on those very subjects they are half in and half out! What a shambles and still we await a confirmation from any regulator that they are investigating this multi-million pound company to ensure they are acting legally and protecting the consumer. Not forgetting they will have to start providing pensions to LPE’s.
I expect this ruling will have no effect on Purplebricks as the contracts with the “service providers” are very different.
However it is very possible that if a case was brought against Purplebricks at an employment tribunal it would be decided that their “service providers” are employees. Purplebricks has more options then Uber over this, as for example Purplebricks could allow their “service providers” to employee people to do viewings, rather than requiring personal service.
I expect that Uber will appeal, and at that point we may get the law clarified.
In my extended area a total of 5% of the property for sale is with an on line offering. for PB that’s 1 property. (1 to Tepilo nothing with Yopa or the other better know brands rest just weird little companies).
That’s calculated over the last 12 months. Ignoring their losses, I really don’t know how PB can be even making the same money they made last year?
@Property Paddy.
Have all the traditionals come offline in your area?
Think when applying to cheaper models we need to add ‘Budget onliners’
Think you need to explain your comment, Mr Mealham.
Should think some of their LPE, s in the peripheral areas are having a hard time of it . Instruction rates have fallen since the summer. In my home town they havent added one for 2 months and 33% of the current instructions have been littering the site for more than 12 months
That’s our experience as well. Seven previous years of fairly consistent take on levels (even through the really hard times), and then since May dropped like a stone to a third of normal. Wonder what other agents out there are experiencing?
So according to PurpleBricks this legislation only affects people who have not “become very successful business people, personally and professionally.”?
Wow! Aside from the arrogance of the tone, I genuinely don’t know what that statement means!
If I engage with people I am successful personally and professionally?
Seem to remember a story few weeks back where LPE”s were not allowed to work for other property related businesses.
Wis PB would make their minds up. Are their LPE”s self employed or not?
To it just looks like they are trying to dodge their responsibilities as an employer.