Consensus HR

Your outsourced HR department.

Employment Status – Employee, Worker, Self-Employed?

Published in Employment Law, General, Handbook

The news is currently a blaze with the status of people within companies at the moment with Uber, Addison Lee & Pimlico plumbers all having been (or still going through appeal) to an Employment Tribunal (ET) to justify why they have Self Employed people in their businesses and not Employees or Workers.

But what is the difference? Matthew Pinto-Chilcott – MD of Consensus HR states “This is an area that has been a nightmare for business owners for an extremely long time with many believing that it is more tax efficient and easier to manage if you do not have employees / workers and make everyone self-employed and just pay their invoice. But is this really the case? Is it really not that simple? Unfortunately not as is currently being shown at the Employment Tribunals. It would seem that for too long the status of members of the team has not been fully addressed and now the Government / Employment Tribunals & people it ultimately effects are fighting back.”

An article by the Financial Times – 25th September titled Uber rival’s drivers are ‘workers’, Employment Tribunal (ET) rules discusses this further.

Also to assist people, I have listed below the differences of each of the statuses.

EMPLOYEE:

An employee is someone who works under an employment contract.

Employment rights

All employees are workers, but an employee has extra employment rights and responsibilities that don’t apply to workers who aren’t employees.

These rights include all of the rights workers have and:

Some of these rights require a minimum length of continuous employment before an employee qualifies for them. An employment contract may state how long this qualification period is.

SELF-EMPLOYED:

A person is self-employed if they run their business for themselves and take responsibility for its success or failure.

Self-employed workers aren’t paid through PAYE, and they don’t have the employment rights and responsibilities of employees.

Someone can be both employed and self-employed at the same time, for example if they work for an employer during the day and run their own business in the evenings.

Self Employed Employment rights

Employment law doesn’t cover self-employed people in most cases because they are their own boss.

However, if a person is self-employed:

  • they still have protection for their health and safety and, in some cases, protection against discrimination
  • their rights and responsibilities are set out by the terms of the contract they have with their client

WORKER:

A person is generally classed as a ‘worker’ if:

  • they have a contractor other arrangement to do work or services personally for a reward (your contract doesn’t have to be written)
  • their reward is for money or a benefit in kind, for example the promise of a contract or future work
  • they only have a limited right to send someone else to do the work (subcontract)
  • they have to turn up for work even if they don’t want to
  • their employer has to have work for them to do as long as the contract or arrangement lasts
  • they aren’t doing the work as part of their own limited company in an arrangement where the ‘employer’ is actually a customer or client

Worker Employment rights

Workers are entitled to certain employment rights, including:

They may also be entitled to:

If you find this area of Employment Law complicated and a nightmare and are unsure of the status of your members of the team, give us a call on 01462 621243 or alternatively complete our ‘Contact’ form and we will get in touch.