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When does a kitchen, bedroom and bathroom subcontractor become an employee?

Sharps Bedrooms has been in the headlines for all the wrong reasons recently in a legal spat that highlights the changing face of the law around the definitions of sub-contractor and employee.

And while this case has been brought by a subcontractor against the national retailer – and therefore hinges on the details of his particular circumstances – it still highlights potential risks for all retailers and their regular fitters.

The Sharps case demonstrates what can happen if the relationship breaks down, however recent precedents mean that even when both retailer and subcontractor are perfectly happy with whatever arrangement they have, the law may disagree with them…

David Lockwood has worked as a subcontracted fitter for Sharps for around 30 years but is taking legal action to be classed as an employed worker with the right to claim holiday and sick pay.

Lockwood alleges that Sharps is denying him the right to work for competitor companies, as well as subjecting him to financial penalties – which he argues could define his status as an official worker of the company.

He also says that Sharps controls the dates, times and fees for the work he undertakes, and reserves the right to impose a financial penalty if he gives less than 72 hours’ notice if he cannot attend a job.

Lockwood believes that Sharps has used “unlawful loopholes” to take advantage of subcontractors, adding that he feels “totally failed and disrespected” by the company after his long years of service.

Sharps disagree with all of Lockwood’s claims and say they will challenge any legal action.

Much of this stems from the historic Uber drivers landmark employment tribunal ruling in 2016 – subsequently upheld on appeal in 2021 – that its drivers should be classed as workers and therefore be entitled to the minimum wage and paid holidays.

The court concluded that the drivers were workers because of Uber’s level of control over them, including setting fares and not informing them of a passenger’s destination until they were picked up.

When the appeal was found in favour of the drivers in 2021, it lead to the British Institute of Kitchen, Bedroom and Bathroom Installation (BiKBBI) to issue a stark warning to its members and their retailer partners.

The BiKBBI said that the Uber ruling would mean that the “totality of the relationship between businesses and subcontractors” will be looked at in determining employment status, following the ruling, rather than just the specific contractual terms.

It warned that “if businesses are recognised as having an undue level of control over how the subcontractor goes about their work and allows 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 it.”

Interestingly, news of the Sharps case was met with criticism by many independent kitchen and bathroom retailers, particularly those who enjoy healthy, long-running and mutually beneficial relationships with self-employed fitters. “You can’t have you cake and eat it,” was the most common response…

However, what is clear is that the legal precedent set by Uber drivers has now hit the kitchen and bathroom sector and, as the BiKBBI warns, the examination of the relationship between retailer and installer will not only be much more detailed, but may also come into play even when the relationship works well for both sides.

All parties would be advised to audit their relationships against this backdrop and ensure that it is fit for this newly defined purpose.

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