A ruling in favour of a self-employed worker claiming sickness benefit from Pimlico Plumbers could have far-reaching consequences for contractors including accountants and IT professionals, according to lawyers.
The Court of Appeal rejected an appeal by Pimlico on the employment status of the former plumber Gary Smith.
Lawyers said that the ruling, coming three months after a similar verdict against Uber and another case against Deliveroo, would also affect the burgeoning “gig economy”, where people supplement their income with part-time work.
It could have implications for “restrictive covenants” — contractual constraints on working for competitors — that are commonly applied to contractor accountants and IT specialists.
Sean Nesbitt, an employment partner at Taylor Wessing, the law firm, said: “A business like Pimlico cannot have its cake and eat it. If it wants to say someone is self-employed, their economic freedom and ability to compete are an important feature of that status.”
Charlie Mullins, founder of Pimlico Plumbers, said after the ruling that self-employed workers could earn twice as much as if they were directly employed.
The body representing self-employed workers welcomed the ruling.
Jordan Marshall, a policy manager at IPSE, the Association of Independent Professionals and the Self Employed, said: “What is clear is there’s a great deal of interest in gaining clarity on what it means to be self-employed and where does freelancing begin.”
The Road Haulage Association has been warning that “bogus self-employment” is a growing problem for the industry. Jack Semple, head of policy for the RHA, said: “We’re talking about substantial sums of taxpayers’ money being lost, a growing culture of non-compliance and an undermining of the employment rights of lorry drivers.”
The RHA has raised the matter with Revenue and Customs, which said in a last year that it was “concerned by increasing pressure on haulage operators to treat workers wrongly as self-employed, or to hire workers through their own companies in ways that are not compliant with tax laws.”
Self-employment has grown from 3.8 million in 2008 to 4.6 million. The growth was strongest in part-time self-employment, which rose by 88 per cent between 2001 and 2015.