Employment Status – Employee? Worker? Self-employed?
15th December, 2014
A person’s employment status helps determine their employment rights and their employer’s responsibilities.
The three main types of employment status are “employee”, “worker” and “self-employed”. Distinguishing between them has been the subject of much debate and many factors are taken into consideration when determining a person’s employment status.
The discussion of employment status was prominent in the recent case of Pimlico Plumbers v Smith (UKEAT/0495/12/DM). The Claimant successfully brought a claim against the Respondent for direct discrimination which the Respondent appealed on the basis that he was not a worker within the meaning of Section 230(3)(b) of the Employment Rights Act 1996 and thus the ET did not have jurisdiction to consider the Claimant’s complaints of direct disability discrimination.
The Claimant was described as an independent contractor of the company, in business on his own account and liable to account for his own tax and NI. Furthermore, he provided his own equipment, accepted personal liability for work undertaken by him and provided his own insurance.
However, there was no express right for the Claimant to substitute work. Although in practice, the operatives would swap jobs around themselves as a means of distributing work there was not, on the facts, an unfettered right to substitute the work. For this reason, the EAT dismissed the Respondent’s appeal and upheld the ET’s finding that the Claimant was a worker (and therefore entitled to bring a claim for direct disability discrimination).
In deciding the employment status of a person, the Courts will consider the reality of the working relationship and not the description of it. We strongly recommend that any employers who are uncertain as to the employment status of their workforce, contact us to review the various Tribunal and HMRC risks.
You might also be interested in...
23rd January, 2020
In the recent case of Kim Beaney v Highways England and others, Miss Beaney (the “Claimant”) was awarded... Read More »
22nd January, 2020
The Acceptance in Lieu Scheme aims to allow tax efficient gifts of works of art to the nation.... Read More »