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28 May Employee, Worker or Self-employed? The Difference Really Does Matter!

In our Employment Law Solicitors practice advising employers, we often come across cases of mistaken legal employment status along with its frequently major impact on both the employer and the individual doing the work. Here’s a summary of key issues from both sides.

Employee, Worker or Self-employed The Difference Really Does Matter!

What’s the key difference in status and why does it matter?

The three statuses in employment law are summarised (very simply) as follows:

Self-employed: this person controls their work, their time, uses their own tools, doesn’t have to turn up, can send someone else. They are self-employed, meaning no holiday pay, no minimum wage and generally no rights to make the claims employees could make, and no PAYE.

 

Worker: they can’t send a substitute, they work personally, with some flexibility, they don’t have to accept work BUT they must be on PAYE, they have the right to minimum wage and holiday pay, and the working time regulations apply to them.

 

Employee: they have to do the work personally, they are under complete control of the employer and are on PAYE, they have holiday pay and minimum wage plus generally rights not to be unfairly dismissed, notice pay and a much wider range of rights and obligations. We have rulings of ‘employee’ status even where they worked via their own, personal company!

 

Getting status wrong can have a huge impact. Often employers think they have self-employed contractors but, actually, they have workers or employees.

 

What can the wrong employment status expose THe employer and the Individual to?


For employers: getting this wrong means unexpected claims for PAYE liabilities and penalties that an employer didn’t even know they had, backdated holiday pay, income tax, NI etc. and minimum wage too and, if they are treated as employees, then claims for unfair dismissal! It isn’t just about what you and the contract call them, it’s also about how you manage them on the ground.

For individuals: it can mean less pay, no holiday pay, no protections when dismissed, no rights to regulated working hours, rest breaks and other protections.



What can you do?

If you have anyone on what you refer to as ‘zero-hours’, ‘consultancy’ or ‘self-employed contractor’ terms, contact us for a free audit.

Being fully aware of the status of your staff will mean that you hugely reduce the risk of unexpected and costly claims.

 

 

Posted by Lee Stephens

Lee Stephens heads up the team with the help of his co-Directors, Lee has practiced as a specialist employment Solicitor for almost 20 years now, formerly as a Partner with a leading UK law firm Lee Stephens advises SME’s to PLCs and he has a wealth of experience in successfully helping businesses with all aspects of employment law from the day to day to complex reorganizations, TUPE, senior executive removals and disputes through to Tribunal too. KEY AREAS OF WORK Lee has significant experience on:- Post termination and confidentiality breaches and injunctive relief work TUPE transfers and consultations; Senior executive disputes and removals Re-organizations and restructures in various sectors from healthcare, manufacturing to independent schools Agency and self-employed contracts and related claims Employment Tribunal defence and claims Lee has spoken on invitation on various aspects of employment law for various groups across the UK. Using his knowledge and experience Lee solves problems for clients and provides excellent service too. Lee also undertakes his own advocacy and delivers management training workshops and he has particular experience working with clients within the Private School, Veterinary, Care, Recruitment and Production, Logistics & Manufacturing sectors.

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