Gig economy ruling could have implications for local employers

Monday 18 June 2018

A long-running court battle over the "gig economy" which ended with the UK Supreme Court upholding self-employed workers' rights may have knock-on effects in the Channel Islands, local lawyers have warned.

Ogier counsel Rachel Richardson and senior associate Daniel Read – specialists in contentious employment law – say that the verdict in the Pimlico Plumbers case may increase the pressure in the Islands to clarify the law in respect of "gig economy" or zero hours workers.

In their judgment, the UK Supreme Court concluded that Gary Smith, a plumbing and heating engineer, who worked for Pimlico Plumbers Ltd between August 2005 and April 2011, was a "worker"  and was therefore entitled to holiday and sick pay among other rights.

In Jersey, the Employment Tribunal also published a judgment after considering the same issue of the distinction between self-employment and employment. The case of David Albert Cole against Edward Jones and Kathryn Le Seelleur-Jones however had a different outcome.

Mr Cole claimed for unfair dismissal and unpaid holiday pay was struck out because he was deemed not to have been employed as a gardener. The tribunal found that although there was a "mutuality of obligations" with the people that he worked for, Mr Cole also marketed his services to others, worked the hours that he chose, took holidays and breaks when he wanted to and paid own tax.

As such, the Tribunal Deputy Chairman, Hilary Griffin, concluded that Mr Cole was self-employed and operated his own business and was therefore not an employee under the law.

Pictured: The Employment Tribunal found that Mr Cole was self-employed and not an employee under the law.

Mr Read said: "Although the verdict in the Pimlico Plumbers case hinged on its own circumstances, the Guernsey and Jersey Employment Tribunals will often look to the UK and pivotal decisions such as this for guidance. There is no distinction in Jersey between a "worker" and an "employee," so the Pimlico Plumbers case is likely to be less important for employers in Jersey as a result. Zero hours or 'gig economy' workers are already protected under Jersey law.

"The Jersey case also hinged on its own circumstances, particularly that the claimant was advertising his services to other customers while working for the respondents. This decision is a helpful clarification from the tribunal on when an individual offering services will be deemed to be an employee or when they will be held to be self-employed. Businesses need to take care when contracting with third parties, to ensure that they are not actually entering into an employment agreement."

 Ms Richardson added: "There is currently little clarity on this area of the law in Guernsey – minimum wage legislation contains a definition of worker but other employment protection legislation does not.  Nonetheless the 'gig economy' is growing in Guernsey just as it is in the UK and employers are increasingly using or attempting to use zero hours contracts to circumvent employment rights and so it may not be long before 'gig economy' workers in Guernsey are afforded enhanced rights."

Businesses who retain staff on zero hours contracts or who rely on self-employed labour and are not sure of their legal position or the true status of the worker are urged to take advice as the worker may have more rights than first thought.