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Employment status: are you employed, self-employed or a contractor?

November 14 2017

The ins and outs of employment status and what it means for you

The so-called gig economy is big business in the UK. In the last few years it has grown to include approximately 30% of the total UK workforce, with 5 million people earning a living with companies like Uber and Deliveroo.

But whether those people are in fact ‘working for’ these companies is a moot point.

There was wide publicity for the Employment Tribunal’s recent decision that Uber drivers aren’t self-employed (as the company contested), but are workers employed by Uber. Uber’s appeal to overturn the decision has failed and it remains to be seen if they will accept the ruling or continue to appeal against it. Whatever the result, it will no doubt have implications for many thousands of workers all over the UK.

So, what are the different types of employment status and where do you fit in?

Here’s a brief guide:

WORKER

You are generally classed as a worker if:

  • You have a contract to do work or services for a reward (either money or a benefit in kind) – the contract doesn’t have to be written.
  • You have only a limited right to subcontract the work.
  • You have to turn up for work whether you want to or not.
  • Your employer has to have work for you to do.
  • The employer is not a client for whom you are doing the work as part of your own limited company.

 

EMPLOYEE

You are generally classed as an employee if most of these conditions apply to you:

  • You are required to work regularly, for a minimum number of hours (unless you are on leave) and you expect to be paid for the hours you work.
  • You can’t send someone else to do the work instead of you.
  • The business deducts tax and NI contributions from your pay and you can join the company pension scheme.
  • You get paid holiday and you are entitled to statutory sick pay and maternity/paternity leave.
  • You work at the business’s address and the business provides the tools you need for your work.
  • You are subject to the business’s disciplinary and grievance procedures and your contract sets out redundancy procedures.
  • If you have another job, it is completely separate to this work.
  • Your contract uses the terms ‘employer’ and ‘employee’.

 

SELF-EMPLOYED

You are usually self-employed if most of the following apply:

  • You are responsible for the success or failure of your business and can make a loss or a profit.
  • You can decide on the work you do; when, where and how you do it; and if you want to hire someone else to do the work.
  • You can work for as many clients as you want.
  • You buy your own tools and equipment, cover your own running costs and any business assets.
  • You are responsible for making good any unsatisfactory work in your own time.
  • You agree a fixed price for your work.

 

CONTRACTOR

You can be a contractor if you are self-employed or if you a worker or employee if you work for a client and are employed by an agency.

 

Why does employment status matter?

Your employment status determines the rights you have. For example, amongst other things a worker has the right to be paid the national minimum wage, protection against unlawful discrimination and protection for whistleblowing. An employee has all the same rights as a worker plus additional rights such as the right to ask for flexible working, a minimum notice period and statutory redundancy pay.

Your employment status also determines your employer’s responsibilities to you.

There is a full guide to employment status and the rights and responsibilities of employees and employers at https://www.gov.uk/employment-status.

 

What to do if you have been treated unfairly

If you believe your employer has not met their responsibilities or that your rights have been breached, talk to us. Our employment law experts have handled many cases for our clients, including instances of racial and sexual discrimination and whistleblowing. We have successfully taken cases to the Employment Tribunal or, more frequently, settled before they reach that stage.

Contact us on 0114 220 1795 or email disresenquiry@pm-law.co.uk.