The Big Debate
There has always been an element of uncertainty around what constitutes self-employment. However, more recently the ‘gig economy’ has received a lot of press regarding the status of so called self-employed contractors especially when working for the likes of Uber and Deliveroo.
In the case of Uber, the Employment Tribunal found that they had incorrectly contracted with their workers and as a result 40,000 licensed drivers were reclassified as employed staff, all now with workers’ rights. As employers, can we afford to ignore or misunderstand the formalities required when providing contracts to our workforce, especially if we are not setting out to create the traditional employee/employer relationship?
Getting it right is fundamental, although not always straight forward and with flexible working rights coming to the forefront over recent years the lines have been blurred even further.
So when considering the status of your workers there are some key questions you should be looking at;
- Do you have ultimate control of the work? – a self-employed person would generally have more of a say and exercise independent control over how the work is carried out!
- Does the worker have the right to contract with other company’s or are they only allowed to work for your business?
- Is the worker obligated to accept work from you? Are you obligated to provide work? – a self-employed person generally does not have to accept assignments from you.
- Do you control the workers hours and place of work? – only employees would generally be subject to such control!
Some company’s fall into the trap of believing that if a worker is responsible for their own tax formalities then they must be self-employed. However, it is worth noting that HMRC still have discretion under the IR35 rule to find that a worker is employed even when your contract deems otherwise which could leave you an employer severely out of pocket.
Employed and self-employed can be a tricky one to navigate, especially with the increase in the gig economy. If you’re unsure on where you stand, make sure to speak to an expert. An employment tribunal dispute is the last thing any employer wants, especially over contract types and the status of work one may do. Cover yourself and your business, having that peace of mind means your business is set up for success!