Will more online agencies face class actions over sel...

The class action taken by former self-employed workers against two online agencies should be a warning to other firms breaking the rules.

That’s the view of employment tax compliance expert Lee McIntyre-Hamilton, a partner at Keystone Law.

Yesterday we reported that claims firm Contractors for Justice is to commence proceedings against Purplebricks and Yopa on behalf of some formerly self-employed Local Property Experts, Local Agents and Territory Owners.

Contractors For Justice, known as C4J, represents workers that claim to have been disadvantaged by companies that changed the status under which they engage workers.

The C4J statement released to the media mentioned Purplebricks and Yopa, but states that: “Hybrid agencies that merely support self-employed agents such as Keller Williams, eXp, Nested and the like are deemed to operate a significantly ‘hands-off’ model and are likely to sit outside of any such claim.”

However, not all correspondents with the trade press yesterday agreed with that view; some believed there may be other online firms falling foul in the same way.

Now Lee McIntyre-Hamilton says other companies knowing they are flouting rules must stand by for possible action.

He says: “Following this and other recent high-profile cases, together with the well-publicised HMRC changes to the IR35 legislation in recent years, there is clearly a growing awareness of employment status in the workforce.

“This growing awareness should be heeded as a warning to employers who are deliberately breaching the rules.

“However, more prominently, it will also no doubt cause concern for many employers who are genuinely trying to comply with the rules but, owing to their complexity and the fact that employment status is based largely on case law, may incorrectly assess the position.

“It is also important in these cases to recognise that there are differences in employment status for tax and employment law purposes.

“For example, in the Uber case, drivers were deemed to be ‘workers’ under employment law, giving them entitlement to certain employment rights. However, there is no ‘worker’ status for tax purposes and an individual is either employed or self-employed.

“In the Uber case, HMRC appears to be satisfied that, for tax purposes, Uber drivers are still deemed to be self-employed and do not need to be put on a payroll.”

Yopa did not respond to our request for a comment on the Contractors for Justice statement.

However, Purplebricks told us: “All Territory Operators entered into a commercial licence agreement and this was clearly set out in their contract with Purplebricks. We have always taken legal advice in regards to our licensing model – and the advice is very clear that these individuals were operating as limited companies, running their own business and with full control over their own staff.”