‘Thousands’ of former workers lining up to sue online estate agents

Thousands of formerly self-employed workers are preparing a bid to sue online estate agents including Purplebricks and Yopa, amid claims that they should have been treated like employees and are therefore owed holiday pay and pension contributions.

Should the bid to sue the estate agents prove successful, the firms could face legal bills in the ‘tens of millions of pounds’, the lawyers behind the claims suggest.

Contractors For Justice, which is acting on behalf of local property experts, local agents and territory owners who have worked for the online agents, is currently applying to the courts for authority to engage a group litigation order against the firms.

C4J say their clients could be owed thousands of pounds each, having been disadvantaged by companies engaging them on a self-employed basis ‘despite… directing them day to day as actual employees would be’.

The claims firm asserts that in other sectors this approach could fall foul of HMRC tax regulations known as IR35.

Introduced in 2000, IR35 was designed to close a loophole by which contractors could avoid tax by working in the same manner as regular employees, but through an intermediary.

According to C4J, Purplebricks has 600 Local Property Experts, with a rate of churn estimated to be 50 per cent per annum.

‘This could mean that since its launch in 2014 some 2700 ‘LPE’s have worked with that particular organisation plus many more [territory owners],’ C4J said.

‘Most will have previously been designated as self-employed and, based on C4J’s claim, are potentially in line for a pay-out of thousands of pounds each if the claim is successful.’

For its part, Purplebricks maintains that its contractor practices are legitimate.

A Purplebricks spokesperson said: ‘All territory operators entered into a commercial licence agreement and this was clearly set out in their contract with Purplebricks.

‘We have always taken legal advice in regards to our licensing model – and the advice is very clear that these individuals were operating as limited companies, running their own business and with full control over their own staff.’

The initial basis of the intended legal action focuses on non-payment of holiday pay, which C4J say previous and current workers may be due if it is proven that they were in fact ’employed’ in terms of the legal definition.

C4J’s claim will also seek to recover the workplace pension contributions that potentially should have been made by the employer.

C4J: ‘We are very confident of our success in reclaiming in some cases many thousands of pounds for the individuals concerned.’

This amounts to 12.07 per cent of each year’s earnings for holiday pay and up to 8 per cent for pension contributions, plus interest.

C4J said: ‘The total quantum of the claim could therefore amount to tens of millions of pounds if current and former self-employed agents and territory owners are, in fact, deemed by the courts to have been workers despite their self-employed label.’

A spokesperson on behalf of the group, Peter Fletcher, added: ‘HMRC and the courts are clear that just designating your staff as self-employed does not mean that you may operate those workers as employees in all but name just to save the company from paying holiday pay, statutory pension contributions and so on.

‘In recent cases involving Amazon and Uber, it’s been found that self-employed contractors were in fact workers in the eyes of the law.’

‘Our action against online estate agencies, that may have designated their workers as self-employed when in fact they may not have been, is being commenced in a similar vein to these other well-known outcomes and therefore we are very confident of our success in reclaiming in some cases many thousands of pounds for the individuals concerned.’

Yopa did not respond to requests for comment.