16 Nov 2017
We analyse what the outcome means for employers
What the differences are between an employee, worker and self employed
3 key Findings UK Employers Need to KnowHere are 3 findings from Croner’s Employment Law experts to come out of the latest tribunal:
- Uber drivers are workers and, as a result, are legally entitled to be paid national minimum/living wage for each hour they are logged into the app, so long as they are working in their area.
- Uber drivers are entitled to future, and previous, holiday pay and other rights such as pension contributions, whistleblowing protection and minimum rest periods.
- For other employers who operate on a similar basis to Uber, the intention to appeal again creates a limbo situation. However, it is possible the Court of Appeal will overturn the decision meaning that employers may continue to hold their workforce as self-employed.
So What are the Differences Between a Worker, Employee and Self Employed?Croner Employment law expert Amanda Beattie: said: "Before we start it’s important to note that each case will turn on its own facts and there is no one factor which will be conclusive in determining the employment status of an individual that you engage the services of. However, these are general principles of guidance, which can assist you."
- Summary: They work slightly more autonomously than an employee, although the individual may still be under the supervision or control of a Manager. A worker will have a contract or other arrangement in place with you, which doesn’t always have to be written.
- How do you determine if they are a worker? A worker will have some form of arrangement to personally provide services for you, in return they will be given a reward such as money, or a benefit in kind.
- Their obligation to you: There will be an obligation to personally perform the services to you, in that there will be no right to substitute themselves for another person for the work they have agreed to provide. However they may be able to accept or refuse any work that you offer them.
- How do you determine if they are a worker? Workers are entitled to certain employment rights, including, but not restricted to being paid the minimum wage, the statutory minimum level of paid holiday entitlement, the statutory minimum length of rest breaks, protection from unlawful discrimination, and for whistleblowing. A worker may also be entitled to statutory sick, maternity/paternity, adoption, and shared parental pay.
- What are they not entitled to? Workers are not normally entitled to protection against unfair dismissal, time off for emergencies, the right to request flexible working, or statutory redundancy pay.
- Summary: They will work under an employment contract, which features terms such as employer and employee.
- How do you determine if they are an employee? They are most likely an employee if they are required to work regularly for a set number of hours and to be subject to your working practices and rules. They usually report to a manager or supervisor.
- Pay and benefits: You should deduct tax and national insurance. Where necessary your businesses disciplinary and grievance procedures apply, as does your redundancy.
- What rights do they have? There is a huge range of rights that an employee will have but mainly they are Salutatory Sick Pay, Maternity/ Paternity pay, and they will be entitled to Holiday Pay. They can also bring claims for breach of contract at an Employment Tribunal to enforce such claims as notice pay. In addition, subject to length of service restrictions, they are able to bring claims for unfair dismissal.
- Summary: They will be an independent business entity with full accountability for themselves. Someone can be employed and self-employed concurrently, for example they can work for an employer during the day, and run their own business in their own time.
- How do you determine if they are self-employed? A few main indicators are that they are autonomous, meaning they can choose the work they undertake, where, and how they do it. These individuals will put in bids, or provide quotes to secure work/projects, and will submit invoices once the work is completed. They could also have the ability to substitute themselves for another to carry out the services for you.
- Things to watch out for: It’s very important for employers to ascertain that self-employed people are being engaged correctly, as unpaid tax and penalties could potentially fall at your door, or entitlement to certain benefits could be lost, if not handled in the right way. They can also hire someone else to provide the work in their absence, so long as the replacement is suitable. Self-employed individuals are also able to work for more than one client at any one time, and are not normally under any direct supervision or control.
- What rights do they have? Self-employed individuals are normally exempt from PAYE and do not have the rights of an employee, such as they are not entitled to holiday and sick pay. Self-employed status is relatively complex, so it is advisable to seek advice if you have concerns or queries regarding any of your workforce operating in this manner.
Free to Download Employer Resources
Ready to focus on what you do best?
Get your free consultation and speak to an expert today.