Aside from being able to tell you the news on Monday that PurpleBricks is drastically changing its business model to a model that now uses more than 600 LPEs, more information will reach me in an envelope that will be left on my usual dead-drop site .
Yes, it has been confirmed that our scoop was 100% correct and that my numbers were pretty accurate too, as this step into hiring instead of self-employment will cost PurpleBricks between £ 5 million and £ 6 million a year, plus the unquantifiable , inevitable costs of labor compensation over time.
The PurpleBricks document given to me comes from a “well-placed insider” entitled “Common FAQs”. It’s a question-and-answer sheet that tries to answer some of the questions but definitely not all of the many questions from LPEs who were unsettled by the shock pivot in order to turn them into employees.
Aside from the U-turn and altered narrative now trying to sell the opposite benefits to what the previous regime sold as being beneficial to the self-employed, the document is instructive. It says what it says and what it does Not say.
First commission. However, it states that a “competitive, true-to-scale base salary” is now being offered. It does Not Tell me how much that will be – £ 10,000? € 20,000 ?. Is it negotiable? Regionally variable? Who knows? But that’s a big question that certainly needs to be answered and is blatantly missing from what may be referred to as the Frequently Asked Questions Sheet.
On Monday I awakened the specter of a cut in the commission and sources tell me it will. However, the ‘FAQ’ document I saw mentions that a ‘fair commission’ is paid. Fair to whom, one wonders? Almost certainly it will be less per listing than it is now and will no doubt prove to be a great deterrent to current LPEs. Maybe this will turn into a commission for each sale actually completed? No, that’s just silly.
But there is also this revelation. LPEs must reapply for their position and there is no guarantee that they will be accepted. So this is both a separation of listing employees and an attempt to fend off the curious glances of the HMRC via the IR35 rules. Additionally, LPEs and TOs that have Administrators on YOUR payroll may have to fire them – at the expense of the LPE / TOs, of course. Not Purplebricks’.
Oh, and all who are accepted have a six month trial period. Ouch.
Vic Darvey wonders why, as he speculates in the document, some might make negative noises on social media for a few days. Well, Vic, you’ve just taken job security and some potential net income away from 600 families – that’s why you’re getting some cane. And no gloss from press releases will detract from it.
In terms of deadlines, do LPEs and TOs have a maximum of 20 days to make the life changing decision – move into employment status with any additional controls and management reviews that PB has planned? Or be unemployed.
There are advantages, however. 25 days of vacation. A pension. And paid maternity and paternity leave – as I have described it, it should be too. Though it’s spun as benevolence from Solihull, it’s actually all required by law. But Vic will allow you to take a day off here and there. “Birthdays and your wedding day,” he says. Very gracious.
This sad saga is portrayed as a boon to LPEs. By and large, it’s not. And it’s also being sold to hit the 10% market share that is getting further and further removed from Vic Darvey’s reach and is now a target that has just been refocused on 2025.
How it can help discourage 600 people by cutting their salaries and laying off some is a mystery to me.
Russell Quirk is co-founder of real estate PR specialist ProperPR and a regular commentator on the industry and housing market for broadcast media. The opinions expressed are his own.
