It’s no wonder that thousands of firms believe it’s no longer safe to use anyone who purports to be self-employed.
You only have to think about recent news stories, reporting that Uber are giving their drivers sick pay . . . Pimlico Plumbers being told (again) that calling someone self-employed doesn’t mean they actually are self-employed . . . the background noise from trade unions that fear that unless they can reverse the gig economy trend then their days really are numbered . . . it seems the media itself has decided the topic sits nicely alongside anti-Brexit gloom and doom and the way Amazon is killing off the high street while paying insufficient tax.
Meanwhile, there are at least four ongoing government reviews centred around self-employment and those who work for platforms like Deliveroo. And in the public sector, changes to IR35 have seen PAYE being applied to contractors who used personal service companies to maintain their freelance status.
When ex-employees had to pay a fee to lodge a claim there were 4,300 new cases a quarter. Now the number is around 9,200 – although more than ten thousand new claims were raised in the first three months of this year alone. It all works out to an increase of almost 120%.
Having said that, what happens to these claims is much more interesting than simply looking at the numbers alone:
- 29% are settled out of court, which is the ideal outcome for all the no-win-no-fee firms that have swooped on this money-spinner since legal fees in accident claims were capped.
- 17% are withdrawn by the claimant, which is unsurprising given that the scrapping of fees has led to a balloon in spurious claims which would never stand a chance if they actually reached a tribunal – but might just get settled before then by an ex-employer who wants to avoid the stress and cost of a hearing.
- 30% are dismissed or struck out, which often happens when a no-chance claim is lodged and then not actively pursued, or when evidence comes to light that means the claimant has zero prospect of success.
- Only 10% of claims are actually successful at hearing.
Here at Hudson Contract, as we expected, we’ve been involved with a number of claims lately. It’s been clear from the outset that various claims firms are winding people up, promising easy money and ignoring the actual facts of their ‘cases’.
Buoyed by all the self-employment chatter and confusion and the absence of tribunal fees, some law firms currently seem to think all they need to do is issue a standard set of allegations, then sit back and wait for a settlement offer.
I suppose they have a twenty-nine percent chance of being correct, which is presumably good enough to make money.
From our point of view, it’s an occupational hazard, and just something we deal with on behalf of our clients.
Our clients can continue to rest assured that if they follow our procedures and treat sub-contractors like sub-contractors any claims coming their way will most certainly not fall within the 10% of claims which go in favour of the claimants.
Even better, the Hudson Contract guarantee means that if you’re faced with an attempt to take you to tribunal, we take over the case – and all the stress – and meet all the financial costs of lawyers etc. And should we ever lose, we’ll pick up the bill.
So in a way, this is a ‘good news’ piece . . . Hudson Contract clients can ignore all the self-employment chatter, knowing that the self-employed status of their subbies is simply not up for debate.
