Pimlico Plumbers is consulting with lawyers over a probable appeal of today's court ruling on the employment status of the tradesmen it hires.
Charlie Mullins, who owns and runs the company, told City A.M. he was "quite surprised" by the Court of Appeal decision handed down this morning.
He said the group was in discussions with its lawyers and would "more than likely appeal" the ruling.
"It's highly likely that we'll be appealing, because we can't get our heads around this word 'worker' and what it means," he said.
Worker or employee… or both?
The court held that Gary Smith, who brought the original case to the employment tribunal, was not an employee but was a "worker", and as such should be afforded workers' rights such as holidays and sick pay.
Mullins said the appeal decision had offered a little more clarity on what constitutes a worker, but it wasn't enough.
"A worker isn't necessarily an employee but all employees are workers… it's a grey area. I think we need input from the government to clarify things," he said.
According to Mullins, Pimlico Plumbers hires a range of tradesmen who can either work on a PAYE basis, or sign a contract as a self-employed worker.
When Smith got involved with the company, he signed a contract to work on a self-employed basis that had been looked over by Pimlico's lawyers and accountants, as well as the Inland Revenue – all of whom deemed it good to go.
However, Mullins said, Smith found a loophole in this contract and is now "trying to have his cake and eat it", by claiming he was a "worker", and not self-employed.
"But he was clearly self-employed," said the Pimlico founder. "He was VAT registered, and he benefited from paying lower tax."
Pimlico has since changed the contract it offers self-employed tradesmen – "and I believe it's watertight", Mullins told City A.M.
And although tradesmen can work for Pimlico on a PAYE basis, most prefer to operate as self-employed workers because it offers a higher salary, Mullins said.
"You're looking at £60-80K on a self-employed basis, and £30-40K on PAYE," he claimed.
"Holidays and sick pay are the only benefits (Smith) wants to go after."
Mullins is not worried that other tradesmen will want to switch to PAYE because it wouldn't make sense for them financially.
Wages, not prices, would change
And, he added, if the company is forced to change the way it hires people, it won't be customers who are affected.
"The plumbers would be paid less," he stated. "The prices wouldn't change, but the wages would."
"At the end of the day we will offer people whatever works for them – we just want to get people in to work," he added.
And the plumbing boss said he bears no ill-will towards Smith. "Gary was a great engineer and quite a nice fellow," Mullins commented. "I wish him well."