An individual may be an ‘employee’, a self-employed ‘worker’ or a self-employed ‘independent contractor’. This employment status determines the employment rights and tax status of the individual.
An ‘employee’ has the greatest range of employment rights, including the rights not to be unfairly dismissed, to redundancy pay and to maternity pay. A ‘worker’ has fewer rights, but these include a right to 28 days’ paid holiday and to be paid at least the national minimum wage. An ‘independent contractor’ is in business on his or her own account and has no employment protection. Agency ‘workers’ are not normally employees.
The sheer diversity of working arrangements means that employment tribunals often have to decide an individual’s employment status. They will look at contractual documents, consider whether these properly set out the parties’ intentions, and explore what happens in practice. Important factors are:
- whether there is a mutual obligation to offer and supply work;
- whether the contract is personal to the ‘worker’;
- the degree of ’employer’s’ control over how the work is performed; and
- the degree of economic risk accepted by the ‘worker’.
“Thank you for your deep and expert analysis and professional advice.” – Dr K L, Hampshire
We can help to ensure that you achieve the employment status best for your business.
Some employers prefer to avoid giving their suppliers employment status. They use ‘workers’ as independent contractors, sometimes through agencies or personal limited companies. Whatever your arrangement, careful documentation is required.
Excellent all round. Everyone extremely courteous and professional at all times.” – Mr R C, Middlesex
Are you an employee or self-employed? Many employment rights depend upon the answer to this question?
If you have a problem employer, it may be that you have more employment rights than you think.