Employee Status....What DOes it Mean to You?

[Employment Law Services]

Following disputes that have led to preliminary hearings at Employment Tribunals, many business owners who thought they were contracting self-employed individuals have found they are actually employing them and so immediately found themselves subject to the full force of UK employment law, and potentially vulnerable defending the employment tribunal claims that led to a preliminary hearing in the first place.

Historically various tests to determine the legal status of a working relationship have been used but the current test of choice is the 'Multiple Factor Test'.

This test looks at a number of different factors opposed to just one or two and some of the factors normally taken into consideration include but are not limited to the following:

• Does the worker receive a regular wage or a one off payment or fee?

• Can the employer dictate the place of work and the way it is to be carried out, in other words what is the employers degree of control in the relationship?

• Does the employer have the right of exclusive service?

• Does the employer have the right discipline and the power to dismiss the worker?

• Who owns the tools or other means of production?

• To what extent is the employer obliged to provide work for the worker to perform and to what extent is the worker obliged to accept such offers of work? Commonly known as 'mutual obligations'.

It is critical that employers correctly determine the nature of the working relationship they have with their workers and then review their contracts to ensure they are compliant with current legislation and are what they actually were intended to be.......the cost of compliance is nothing compared to the cost of getting it wrong!

 

[Lindsey Sharratt]

I agree totally, having a lot of experience in an industry where many people fall foul of IR35 and S660 I am frequently amazed at how many people don't understand this.