Purplebricks faces legal action from agents over holiday and pension pay

More than 100 estate agents are preparing to take legal action against Purplebricks because they believe they are entitled to holiday pay and pension contributions given that they effectively worked for the company despite being classed as self-employed.

They are hoping to match the success achieved by other gig economy workers against high-profile firms, such as Uber Addison Lee.

Contractors for Justice (C4J), which is bringing the Purplebricks claim, is aiming to appeal to more of the 2,500 property agents it believes might qualify before it files the legal paperwork.

Central to Purplebricks’ low-cost proposition were hundreds of self-employed “territory owners”, who managed the firm’s customers in large areas, and “local property experts” who worked under them. Many are now claiming their work should have been designated as full-time employment.

If the online estate agency was found to have been treating self-employed agents as if they were employed then each of those agents could be owed thousands of pounds, according to Peter Fletcher, a consultant for Contractors for Justice. He estimates the total claim could be worth £20m to £100m.

Fletcher, the spokesperson on behalf of C4J, said: “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.”

Russell Quirk
Russell Quirk

C4J has hired property sector PR agency ProperPR as its media and communications partner.

Russell Quirk, co-founder of ProperPR, commented: “We’ve been selected as C4J’s media and communications partner due to our in-depth knowledge of the property industry and our large number of contacts within it.

“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.”

A spokesperson for Purplebricks told EYE this morning: “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.”

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26 Comments

  1. Property Poke In The Eye

    Ouch!!    Pension, Holiday Pay and Minimum Wages will make this model void especially with a tougher market on the horizon.
      #LevelPlayingInAction

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    1. Gloslet

      The irony of no-win, no fee ‘estate agents’ being pursued by no-win, no fee solicitors.

      What’s that old joke

      Q. Why did God invent solicitors?

      A. So estate agents would have someone to look down on.

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  2. OneEyedJack

    “ 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.” They might need to go back to that legal advice … as I know a number of the former LPE’s can prove they never had ‘full control’ over their ‘staff’ ! Also all the LPE’s that were sacked unfairly … couldn’t have been sacked and the ‘Limited Company’ would have had rights to the contract and it’s termination. in fact let me just dig out that contract and see if it’s worth the paper it’s written on …

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    1. Bosky

      It will no doubt come down to the service agreement between PB and the LPE’s under Ltd. company status (LCS) as to how the relationship should be interpreted.
       
      If, for example, the LCS’s have to seek permission to have a holiday and when it is to take place, just like an employee, this could imply employee status, but, then again, PB could argue that the LCS is key to the “project” so a degree of control is essential. If the agreement restricts the LCS from working with other companies or doing their own estate agency, as oppose to the LCS simply not seeking other clients, this could imply employee status. Ltd companies can opt to just work for one company of course.
       
      Unless one is privy to the agreement between PB & LCS, it is simply guess work as to what the agreement implies. I would though expect the agreement to be on a business to business footing.
       
      As for “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“, consider that they were “self-employed contractors” and not limited companies, so not really a comparison.
       
      It would interesting to see what happens, because, if PB are proved right, I can see more of this type of arrangement coming into play; Spicerhaart come to mind.

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  3. MarkJ

    PPI  =>  Dieselgate => C4J
     
    Interested to know if Russells earlier pieces about Purple Bricks self employed to employed transition were written when he was retained by C4J……or did he get the gig as a result of the pieces?
     
    I wonder if PIE requires you to make such declarations?

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    1. RussellQ

      C4J approached me about two weeks ago way after I wrote the pieces on PB. The power of PR 😉

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      1. MarkJ

        Fair enough. I appreciate the clarification….

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      2. PeeBee

        “The power of EYE

        There – corrected that for you, Mr Quirk.  Always a pleasure – never a chore.

        Anyway – back to your bus…

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      3. Dick Value

        Thought you never read the comments under pieces on PIE?

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  4. Diogenes

    Maybe Rob Ellice could arrange one of his infamous funeral marches?

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  5. DerekSharpham

    Just when my retirement couldn’t get any better. I paid my £250 a couple of days ago after being alerted by a former co-worker (the class action offers a free option too).
    If Uber were caught then it only stands to reason that Purplebricks will go the same way. They used and abused us, so it’s only fair that they should get their comeuppance.
    https://c4j.org.uk/estateagents/

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    1. AgentQ73

      Were the LPEs not employed/contracted by the TPOs ? Would that not leave the TPOs on the hook ?

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      1. Emerypiper

        As a former TO, the licenses were signed by the individual directly to PB.

        I am surprised that this has taken so long for a class action suit to be formed.

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  6. Andrew Stanton Proptech Real Estate Influencer

    So who is going to earn out of this? If claimants are succesful they lose either 2%% or 40% of monies owed to them, if it is proven to be the case. So maybe other solicitors might be ambulance chasing this cause … as 25% to 40% of what potentially could be £60M of claims – remember there are many online agents out there, (some of which are no longer trading) including of course the now defunct Russell Quirke Emoov 1.
     
    Were Mr Q’s teams employed or self employed? If so can they claim back monies from the official receiver who wound up Emoov1?
     
    According to Contractors for Justice … who strangley have a Rightmove logo on their landing page … (naughty) if you click to their T/C’s
    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.  

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    1. RussellQ

      Employed, not self-employed

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    2. 456Lets

      In most legal cases is the lawyers who win.  Does that mean that people shouldn’t take legal action against injustices?  As long as people go into this knowing exactly what they are potentially handing over in the case of winning there is nothing wrong with that.  Most “little people” can’t and don’t go up against big companies as they don’t have the financial ability to take action against them and that’s why big corporations get away with so much.

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  7. Robert_May

    This is going to be interesting to watch, anyone who set up a limited company  to work the system designed to avoid working time regulations, national insurance contributions, minimum wage etc is going  to find it difficult to prove they were not complicit in the alleged arrangement. Anyone who then worked for the tier below those limited companies, the lister drones will  presumably have a case against the limited company that ” ” didn’t” ” employ them rather than  Purplebricks.

    Purplebricks will  be able to  call on  NTSELAT, Propertymark, redress schemes & ASA as expert witness in their defence each  were approached with IC35 concerns  from 2014 onwards to how the company was operating, each  seemingly approved and condoned the set up.

    Chris Wood will be sat there very satisfied that his long journey from Penzance to Westminster to address all of these  concerns was well founded and  was not “a vendetta against a single company”

     

    The regulations that govern  how we operate govern us all. It is not down to individual organisations to pick and choose who  regulations do and don’t apply to based on the strength or aggression of the litigation team

     

     

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  8. The No.1 Hybrid Agent Book

    If the contract/agreement of an LPE or TO states that they cannot contract or work for any other organization and that this breaks said contract so that you lose your job then that is surely being employed /engaged solely by one ’employer’…

     

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  9. The Yorkshireman

    It will be interesting to watch the share price of all online estate agents as this case develops. We may also see some consolidation in the sector as some may struggle to survive.
    Pass the popcorn.

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  10. Barnabus

    Whilst a potential legal case is of course very bad news, I actually think there is a bigger problem here for PB in the wake of this latest news – we all know that the best people create the best agency teams, regardless of the model. How can PB possible retain or attract any agent worth their salt with such in house turmoil and a market place that gets tighter by the day?! If the rumour mill is accurate some staff recently converted to ‘employed’ still haven’t been given clarity on their commission structures!! All that will be left is micro managed LPE’s happy to sit on a basic wage. Why else would you join or stay?!?

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  11. smile please

    Getting Quirk to do the PR for this is a joke.

     

    He left investors and staff out of pocket when going bust.

     

     

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  12. seenitall

    Game changer

    Disruptive

    lol

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  13. DefinitelyNotMW

    £20 to £80 million.  There goes all of Purplebricks PLC’s cash reserves.  So without further investment they will have to trade profitably.  Best wishes.

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  14. PeeBee

    From what I understand not one of the TOs or LPEs were forced – at gunpoint, knifepoint, PowerPoint or any point whatsoever – to join the likes of Purplebricks.  They simply saw what they thought was greener grass and jumped over the fence – the way that millions of others have done… and will continue to do.  They were given Contracts (or whatever fancy term you’d like to give them) – and they signed them of their own free will.  They took the money they were paid.

    They swallowed the bait.  Their choice.  Their decision.  Their tough luck.

    If it is deemed that PB and any other Agent of its’ type has wrongly treated staff then they should face the maximum penalties that the current legislation allows – both financial and ‘physical’.  Those staff crying hard done by now when they think there’s a sniff of a payout on the horizon epitomise what is wrong with the whole debacle of “online” agency.

    Maybe one of these ambulance-chasing lawfirms should consider an action against those individuals who, on behalf of these outfits, promised the earth to would-be homesellers in order to tie them into non-refundable upfront or “deferred” fee packages, primarily in order to swell their own bank balances.

    Looking forward to the responses…

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    1. 456Lets

      when was the last time you applied for a job with an employer and then it turned out to be not quite as you thought?

      You stick it out though as you don’t chop and change like that and maybe its not quite as you thought, but its not THAT bad.  You’ve invested time and effort, but you aren’t massively happy.

      You were promised certain things that weren’t true – but you can’t do anything about it as you are just one person against a massive company and its suck it up or leave, and will it be any better anywhere else?

      Many large corporations treat their employees like **** and get away with it.  Does that make it right?

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      1. PeeBee

        “Many large corporations treat their employees like **** and get away with it.  Does that make it right?”

        No – it doesn’t.  But then staff do something magical to rid themselves of the burden.

        The technical term for this cat of riddance is LEAVE THE JOB.

        As I said above, NO-ONE has ever been forced to take a job (not in recent history, at least…).  No-one is ever forced to stay in a job either.  You find that the grass is paler, more bitter than you were led to believe – you exit the field and move on to the next one of choice.

        And that is the key here… OF CHOICE.

        Much as it pains me to appear to be defending firms like PB – this is not about them.  They dangled a carrot – the donkeys bit.  These companies simply exploit loopholes in Company Law that were left there to be exploited.

        Find the Tw@tter or LinkedIn pages for some of the donkeys that took the carrot – you’ll soon get wazzxed off reading the same rhetoric – “Lovin’ the life…” “Why didn’t I do this earlier…” – and more importantly IMPLORING OTHERS TO COME JOIN THEM!

        I have no sympathy whatsoever for these workers. They made their beds.  They even made them for others.

        The sympathy I have is for the people they took money from in order to enjoy the life they stated they loved…

        …but apparently the love didn’t run deep enough to stop a lawsuit when that carrot is waved in front of them.

        And you wonder why there’s so much mistrust of our industry.

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