Online estate agents face ‘Uber-style’ employee claims

A leading claims firm has announced its intention to commence proceedings against online estate agency companies such as Purplebricks.
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A leading claims firm has announced its intention to commence proceedings against online estate agency companies such as Purplebricks and YOPA on behalf of thousands of formerly self-employed Local Property Experts (LPEs), Local Agents and Territory Owners (TOs) on a no-win-no fee basis.

Contractors For Justice (C4J) are a firm that seeks remedies for workers that have been disadvantaged by companies that have engaged them on a self-employed basis despite, in reality, directing them day to day as actual employees would be. In other sectors, this approach has often been proven to fall foul of HMRC IR35 regulations including food delivery and taxis. In February this year the Supreme Court upheld a high profile 2016 decision that Uber drivers were employees, not contractors.

Whilst the term ‘class action’ is a description for actions involving multiple claimants which hails from the United States, in the UK these proceedings are known as Group Litigation Orders (GLOs) and it’s this mechanism that C4J intend to apply to the courts for authority for in order to incept their legal action.

Purplebricks, as an example, state that they have 600 Local Property Experts. Their rate of churn is estimated to be 50% per annum. This could mean that since its launch in 2014 some 2700 ‘LPE’s have worked with that particular organisation plus many more TOs. Most will have previously been designated as self-employed and, based on C4J’s claim, are potentially in line for a pay-out of thousands of pounds each if the claim is successful.

The initial basis of the action centres upon the non-payment of holiday pay which C4J say previous and current workers may be due if it is proven that they were in fact employed for the purposes of the legal definition. The claim will also seek to recover the workplace pension contributions that potentially should have been made by the ‘employer’. The quantum of just these two elements is 12.07% of each year’s earnings for the former and up to 8% for the latter, plus interest.

The total quantum of the claim could therefore amount to tens of millions of pounds if current and former self-employed agents and territory owners are deemed by the courts to have been workers despite their self-employed label.

Former and current self-employed PurpleBricks and YOPA agents and those from estate agencies running similar business models can find out more information and can register their expression of interest in pursuing a joint claim via the C4J website here.

C4J stress that their action on behalf of agent individuals relates to business models that directed their agents ‘as if they were employed’. 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.

Peter Fletcher, spokesperson on behalf of Contractors for Justice Limited says: “HMRC and the courts are clear that just designating your staff as self-employed does not mean that you may operate those workers as employees in all but name just to save the company from paying holiday pay, statutory pension contributions and so on. In recent cases involving Amazon and Uber, it’s been found that self-employed contractors were in fact workers in the eyes of the law. Our action against online estate agencies, that may have designated their workers as self-employed when in fact they may not have been, is being commenced in a similar vein to these other well-known outcomes and therefore we are very confident of our success in reclaiming in some cases many thousands of pounds for the individuals concerned.

“I’d urge anyone that believes they may have been financially disadvantaged by their employment status, to register themselves at the C4J website as soon as possible.”

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