IR35: Post Office case ‘could be UK’s watershed moment for status’

An employer as big as the Post Office being fought on the employment status of its ‘posties’ will force the UK to confront the issue, much as contractors have had to confront IR35.

Delivering this verdict, Pendragon Consultancy said that if they win their claim to be ‘workers,’ an action by 120 sub-postmasters will see all 8,500 of them owed millions in compensation.   

The advisory says such a massive, backdated bill, comprised of holiday pay and National Minimum Wage payments for the Post Office to pay, would make other national employers take notice.

'All sectors'

Pendragon’s founder and CEO Janet DeHavilland explained: “A win here will reverberate across all sectors of businesses if this claim is upheld.

“The engagement of self-employment people will become front and centre of the stage, just like IR35.”

Qdos agrees the ramifications could be on a larger scale than that seen from other ‘gig economy’ cases, like Uber, where initially self-employed individuals fight for worker rights.

'Could inspire millions of others'

Ahead of the 120 sub-postmasters having their day at Central London’s Employment tribunal later this month, the firm said a win might “inspire millions of other gig economy workers to stake their claim for rights.”

Qdos CEO Seb Maley added: “The implications for the Post Office could be severe, reputationally and financially – and so other companies would be wise to take note.

“[And] the rapid growth of the gig economy along with complex employment status rules, means there are likely to be many more [status cases] on the horizon.”

'Grey area'

Although the Post Office seems to be the most high-profile name to be hauled to court over status so far, it is the “surge” in cases which makes IPSE believe that enough is enough.

“The crucial problem is that in the UK, while worker and employee status are defined, there is no such clarity on self-employment.

“This grey area is leading to the chaos of the gig economy and a situation where status can only be defined by lengthy employment tribunals: this cannot continue,” the contractor body says, adding:

“To protect the freedom of the many legitimate freelancers – and also secure the rights of falsely self-employed people – government should define self-employed status in law.”

'Liable'

Without a solution, Qdos fears some employers could even go under, should they be found to have wrongly categorised some self-employed individuals whose court-backed worker status is subsequently rolled out to the remaining workforce.

Mr Maley warned: “Engage self-employed workers when the relationship reflects employment and the company wouldn’t just need to cover the cost of employment rights – they would be liable for missing employment taxes too.”

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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