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Purplebricks faces legal action from agents over holiday and pension pay

A claims firm wants to commence proceedings against online estate agency companies such as Purplebricks and Yopa.

It's on behalf of thousands of formerly self-employed Local Property Experts, Local Agents and Territory Owners.

Contractors For Justice, known as C4J, represents workers that claim to have been disadvantaged by companies that changed the status under which they engage workers. 

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C4J says that in other sectors such as food delivery and taxis, this approach has been proven to fall foul of HMRC IR.35 regulations.  

C4J wants to set up Group Litigation Orders - popularly known as ‘class actions’ - and a representative has told Estate Agent Today that some 100 formerly self employed agency workers have already signed up. 

A C4J statement says: “Purplebricks, as an example, state that they have 600 Local Property Experts. Their rate of churn is estimated to be 50 per cent per annum. This could mean that since launch in 2014 some 2,700 LPEs have worked with that particular organisation plus many more TOs. 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.”

Peter Fletcher, spokesperson for Contractors for Justice, says: “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. 

“I’d urge anyone that believes they may have been financially disadvantaged by their employment status, to register themselves at the C4J website as soon as possible.”        

C4J says the initial basis of the action centres upon the non-payment of holiday pay which the claims company states previous and current workers may be due if it is proven that they were in fact employed. 

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

C4J says these two elements alone add up to 12.07 per cent of each year’s earnings for holiday pay and up to 8.0 per cent for pension contributions, plus interest.

The C4J statement continues: “The total 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.”

C4J says its action on behalf of individuals would relate to business models that directed agents ‘as if they were employed’. 

The C4J statement specifically mentions Purplebricks and Yopa as being in that category, but it goes on to say: “Hybrid agencies that merely support self-employed agents such as Keller Williams, eXp, Nested and the like are deemed to operate a significantly ‘hands-off’ model and are likely to sit outside of any such claim.” 

The claims company, which says its representing agent workers on a no-win no-fee basis, has set up a claims line for individuals who believe they may be in the affected categories. You can see that here.

C4J has also instructed Proper PR, a specialist property public relations firm led by Russell Quirk - the founder and head of the original Emoov online agency.

“Clearly this proposed action is just that, an action, and no-one is as yet pre-empting the outcome or presupposing that any specific online estate agency will be proven culpable. Our job is simply to raise awareness of this issue so that individual agents that may have a claim are able to put that claim to the test formally and in the knowledge that they sit with hundreds of like-minded agents that might each be owed a substantial sum of money” says Quirk.

Purplebricks this morning told EAT: “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.”

Yopa has this morning been asked for its response.

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    The difference with the likes of Keller Williams and Exp is that the agents aren't self employed in that sense. Each agent is an owner of a limited company and then employed by that company. You then just pay the brand for their support. The limited companies then pay holiday pay pensions etc... like any normal company would.

  • Andrew Stanton CEO Proptech-PR    Proptech Real Estate Influencer

    A few things here. I have been writing since 2017 that HMRC should have intervened as clearly LPE's were probably 'employees' on the grounds that the work, training etc was supplied by PB, and they did no other work. So why has it taken so long.

    It is up to the court to decide if my thinking was correct if indeed a class action goes that far.

    What I find curious is that Russel Quirke was of course the head of Emoov 1, an online agent, so will his ex employees be looking to bring an action against him/Emoov1, (or were they fully employed) or at least make petition to the official receiver who wound up the business?

    Will prospective claimants who worked for other defunct online agents, if not directly employed be able to claim, should this class action work. And are the fees that C4J the best for those seeking a financial outcome, as on their website - it looks like a great money spinner for solicitors -

    'There are two bases of registration: Initial Fee of £249.99; Plus a success fee pursuant to our DBA agreement. The success fee will be 25% plus VAT at the prevailing rate and is calculated on the amount of monies recovered in respect of your claim.

    No initial fee: Only a success fee pursuant to our DBA agreement. The success fee will be 40% plus VAT at the prevailing rate and is calculated on the amount of monies recovered in respect of your claim.

    Lastly does anyone know the 'official status' of people working within Strike, Doorsteps etc, are they self-employed, employed, or likely to join this circus?

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    To be truly classed as self employed, the representative and limited company MUST be allowed to pass on leads to any BRAND / Business in return for an agreed comission.

    A particular agency brand may agree commercially offer higher comissions to secure the income, but if they operate any exclusivity clauses, they will lose any legal challenge.

    If they must pass to one entity, they are classed as employed in all but name, So the likes of Keller Williams and Exp need to check contracts

  • Algarve  Investor

    Oh dear. I'm sure this won't be the first set of class actions and this will run and run. I'm surprised it hasn't happened before.

    I think the other self-employed models might need to be careful, too. Is it any surprise that PB has now shifted to a fully employed model? All very suspect.

    We saw Uber and other gig economy companies get it in the neck a few years ago over things like workers' rights and pay, and I think the reckoning could be coming to a few in the property world now too.

  • Samantha Sullivan

    How many times did you make TO's sign new contracts throughout their time working for you PB? How many times did you re-structure and take their areas from under them PB? I know I was burnt and so were many others. The top earners, the top TO's who built the business were used.
    An experience yes, stress yes, being treated like cattle, yes, always and no back up for your self employed agents when anything goes pear shaped (death threats from violet sellers who paid up front and threatened to turn up on our doorsteps)
    Edit: I've had some messages on this. I hope this part helps the case. Within our contracts we had an opportunity to sell postcode areas. I had 3 opportunities to sell to surrounding TO's and good LPE's but was told no by PB. Then as my areas grew to a team of 12 plus support staff, I had those areas taken off me 'because I was too busy to manage them' with no renumeration. I was one of the top 12 TO's, we had regular meetings on how we saw the future of the business, the future was purple. Such a shame, such a con and a waste.

  • CONTRACTORS FOR JUSTICE

    Hi Samantha, we hear stories like this alot.

    If you give us a call on 08000 99 66 99 we would be happy to discuss the situation with you,

    regards,
    C4J.

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