Am I Self-employed or Employed?

Gig EconomyIn the first of a string of high profile cases involving the gig economy, the Court of Appeal in the case of Pimlico Plumbers -v- Smith, ruled that a plumber, who was engaged as a self-employed operative, was actually a worker for the purposes of employment law rights.

Following this case, there have been a number of other high profile cases (eg Uber, Deliveroo, CitySprint) where individuals have been found to workers and entitled to holiday pay.

What is the difference between a self-employed individual, a worker and an employee?

An employee

A number of key employment rights such as unfair dismissal, redundancy pay, maternity leave etc. are only available to employees, i.e. those who work under a contract of employment.

A worker

More limited rights are available to a worker.  A worker is entitled to rights such as paid holiday leave, the national minimum wage and is protected from discrimination.

A self employed individual (Independent Contractor)

A self-employed individual runs their own business and does not have any of these rights.

How can I tell if I am a worker or if I am self-employed?

In broad terms a worker is an individual who is obliged to carry out the work personally him or herself and the work is being done for someone who is not a client or customer of a business being run by the individual.

When determining if an individual is a worker the Court will look at a broad range of factors.  The Court will look at the reality of the situation to determine whether the individual is an integral part of the business.

In this case, the Court found Mr Smith was a worker as he was required to:-

  • He could only be contacted by customers through Pimlico.
  • He could not use a ‘substitute’, i.e. he was not allowed to ask anyone else to do the work in his place. He was required to carry out the work personally.
  • There was a high degree of control exercised by Pimlico on Mr Smith.  For example, there was a company manual governing the working arrangement which Mr Smith had to comply with.
  • Mr Smith was obliged to work a minimum number of hours.
  • Restrictions applied to Mr Smith’s ability to work for other plumbing companies after he left Pimlico.

Next steps

If you are an individual and believe you are a worker then you should seek advice on your position as you may be entitled to claim for holiday pay and have various other rights.

If you engage self-employed contractors it is important that you review your arrangements and assess if they really are self-employed and assess your risk to any financial exposure you may have if they were found to be a worker.

Jacqueline PenfoldFor advice on all aspects of employment law please contact our experienced employment Solicitor, Jacqueline Penfold, on 01323 727321 or using the enquiry form below.

 

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