There has been a lot in the press recently about ‘worker’ status for individuals providing services to the gig economy for example, the cases relating to drivers in Uber and the bicycle couriers in City Sprint and now, plumbers in Pimlico Plumbers Ltd & Mullins v Smith (determined by the Court of Appeal last week). Such status gives workers the right to holiday pay, maximum working hours, national minimum wage and rights under the new auto-enrolment pension legislation.

These cases clearly set a precedent but it is not necessarily all good news for any individual who chooses to work under a ‘self-employed’ status, but then seeks to bring tribunal claims for compensation when they find themselves without holiday pay or a pension.

This is because an Employment Tribunal does have the strong power to decline jurisdiction to hear cases by reason of the doctrine of illegality of contract.

Illegality of contract can arise, for example, where self-employed status is selected so to as to avoid tax and/or NI liabilities.

However, an Employment Tribunal will not automatically decline jurisdiction in such circumstance. It will consider matters such as the bargaining power between the parties; whether the employee wanted self-employed status for the financial or any other advantages that such status can bring or whether the employer operated self-employed status to avoid tax and/or NI liabilities.

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Updates: For employers: Contracts and incentives |
Tagged with: Employment status |

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