Is a worker an Employee or Self-Employed?
The difference between being an employee or self-employed will affect that person's employment rights. In deciding this question the law considers these factors, the following would indicate that a person is an employee (and not self-employed):
The person is required to work regularly.
They are required to work a minimum number of hours and are paid for those hours.
The employer, (usually through a manager or supervisor) is in charge of their workload, and how the work should be undertaken and where it should be done.
The employer provides the necessary tools, materials, equipment and infrastructure for the work done.
The person (employee) must turn up for work and cannot send another person, so they cannot sub-contract the work.
The employer deducts tax and National Insurance contributions from the person's pay, so they are paid net.
The person receives holiday pay.
The person receives or is entitled to other employment benefits & protections, such as sick pay, maternity pay or paternity pay - whether this is the statutory minimum or a more generous contractual entitlement.
There is pension scheme, and the person can join it.
They are subject to and bound by the employer's grievance & disciplinary procedures. This can also include confidentiality and restrictive covenant clauses in their contract. Also where they are subject to the employer's redundancy procedures, such as selection and payments.
Where the employer is taking the financial risk.
Finally, where the person/employee has been given an initial offer letter setting out their basic terms, (hours, pay, etc.). Or has been given a written employment contract or a written statement of terms. This is the last item on the list, simply because a significant minority of employers still do not issue formal written employment contracts - despite the legal risk, this exposes them to. If the person benefits from (and is subject to the above), they are more likely to be employed, rather than self-employed - despite what the employer may contend.
Questions & Answers
- Is a worker an employee or self-employed?
- What information must an employer give to an employee when they start?
- What should be in an employment statement?
- What happens if the employer decides to change the employment statement?
- Should an employer give an employee a written contract?
- If an employee does not have a contract what are the terms of their employment?
- What obligations/duties does the employee owe to their employer?
- What obligations/duties does the employer owe to the employee?
- What are the employee's rights to notice before dismissal?
- Can an employee bring a claim for both?
- What are an employee's Maternity Rights?
- What are an employee's rights under Sex and Race Discrimination law?