KBB retailers could fall foul of the precedent for employment rights of subcontracted workers set by the Supreme Court landmark ruling in the Uber case.
This was the stark warning issued by the British Institute of KBB Installation (BiKBBI) in the wake of the Supreme Court ruling that third-party subcontracted drivers working for Uber should be classified as ‘workers’ and therefore be entitled to demand benefits such as sick pay, holidays and pensions contributions.
The BiKBBI has today issued a briefing paper that gives details of the Uber ruling and what it may mean going forward for KBB retailers that use subcontracted installers.
The BiKBBI briefing warns that the Uber ruling means that the “totality of the relationship between businesses and subcontractors” will be looked at in determining employment status, rather than just the specific contractual terms.
This means that if businesses are recognised as having “an undue level of control over how the subcontractor goes about their work and allow no room for negotiation over what they are paid, they are likely to be classified as employers and carry all of the obligations that go along with that”.
The BiKBBI estimates that around 40% of skilled installers work with major and independent retailers in this way and could now be in a position to demand sick pay, paid holidays and pension contributions.
BiKBBI chief executive Damian Walters commented: “The Uber ruling is a potential game-changer for the home-improvement industry and many retailers will need to quickly adapt how they work with their installers before being forced to do so in ways that may hurt their businesses.”
In its briefing, the BiKBBI spells out the criteria that should be used to determine the level of control a business has over a subcontractor.
These include:
• Prices set for particular tasks with no freedom to negotiate;
• Standard terms and conditions the subcontractor has to sign;
• Does the business control how people can take jobs?
• Does the business have control over how they do their jobs?
• Does the business restrict communication between the contractor and end client – what can and cannot be discussed, such as pricing?
• Is there a general expectation that the contractor will do work for the business even if there’s some contractual allowance to say no?
The BiKBBI recommends retailers that use subcontractors to amend the terms of their commercial relationships according to the criteria established by the Uber ruling.
It advises that retailers should decide whether to:
• Formally agree terms of employment with installers so that they are fulfilling all necessary obligations;
• Adapt their working model and relationship with installers so that they do not meet the criteria for employment status that has been established by the Supreme Court’s Uber ruling;
• Consider use of third-party platforms, such as Protect My Install or other credible intermediaries, and a hybrid, demonstrating they no longer hold direct relationships with subcontracted installers. This could mean the sale and subcontracting of dry-fit installation, using the third-party platform to transact the supplementary work.
Walters concluded: “Subcontracting works for retailers who are able to call on a flexible, skilled workforce, and for installers who value the independence of self-employment alongside the certainty of regular work. However, the debate about ‘gig economy’ working will inevitably reach our industry soon. It’s absolutely vital to get in front of this by adopting innovative new working models that ensure installers are treated fairly and retailers can most effectively serve their customers.”