Am I an Employee, a Worker or Self-Employed?

Different employment rights attach to different types of employment status i.e. whether you are an employee, a worker or self-employed.

For most people it will be clear that they are an employee. You will have applied for a job; will have been given a contract of employment; and will carry out the duties given to you in return for a wage or salary. You will also have to follow your employer’s procedures.

Likewise, if you have started your own business it will usually be fairly clear that you are self-employed. You will have registered as self-employed with HMRC; you will buy all the equipment you need; you will advertise the services you have to offer; you will decide the terms on which you want to work; and invoice your clients or customers.

But the law also gives certain rights to “workers”. “Workers” are individuals that fall between being employees and being genuinely self-employed.

In addition, some individuals are called self-employed when really the working relationship suggests otherwise. In recent years, many individuals who work in the gig economy – doing short-term assignments (such as couriers and taxi drivers) – are claiming to be workers but anyone can be classed as a worker so long as their working relationship fits within that label.

In this article, we consider what makes someone an employee or a worker and what rights you will have if the working relationship you have does fit into these labels.

The rights of employees

Employees have a lot of employment rights although many will depend on how long you have worked for your employer.

Here are some of the rights you have as an employee:

• the right to a written statement of your terms of employment (such as your hours of work, place of work, pay, and terms as to sick leave and holiday);
• the right to a minimum period of notice to end your employment;
• the right not to be unfairly dismissed (see Unfair dismissal);
• the right to a redundancy payment (see Redundancy);
• the right to request flexible working (see How can I change my working hours?); and
• various “family” based rights such as rights to maternity, paternity or shared parental leave; adoption leave; time off for dependants and parental leave (see Maternity, Paternity and Shared Parental leave – your rights, Parental leave – what is it and how does it work? and Time off for dependants).

As all employees are also “workers” they also have the rights workers enjoy, such as the right to paid holiday, which we look at in more detail below.

Who is an employee?

The laws that give employees certain rights say that an employee is someone who works under a contract of employment.

A contract of employment is a contract of service or apprenticeship. This means a contract under which you are working for someone else and under their direction rather than offering services you provide to them.

The contract can be a written contract or one that has been agreed verbally. Not having a written contract does not stop you from being an employee.

But the definition is not very helpful! It has been left to the courts and employment tribunals to decide what things should be considered when deciding whether someone is an employee.

This means that whether you are an employee will very much depend on your circumstances, what has been agreed with you and your working relationship. Just because someone has been classed as an employee and their situation is similar to yours, does not guarantee that you will also be regarded as an employee.

For most individuals, there will not be any doubt that you are an employee and your employer will not try to argue otherwise. But sometimes, especially where the employer has called you self-employed but the way you work suggests you are not, an employment tribunal will need to decide whether you are an employee and have a right to bring a claim for whichever employment right has been breached.

The tests

An employment tribunal will look at different factors to decide if you are an employee.

But you must be able to show the following:

• personal service (i.e. you have to carry out the work rather than someone else);
• that the employer has control in the relationship; and
• other factors point towards you being an employee.

You also need to show that you have to do the work that is offered to you and that the employer is under an obligation to give you work (or pay you for being available to do the work).

Personal Service

Personal service means that you personally have to carry out the work.

If you are allowed to ask someone else to do the work for you i.e. you are allowed to provide a substitute, without any limits or restrictions on your right to do so (so you can ask who you like and whenever you like), this will not be personal service and you will not be an employee.

If you have a contract that gives you the right to provide a substitute, but in reality you are not allowed to do so and never have, an employment tribunal will consider what really happens over what the contract says.

If you are allowed to provide a substitute occasionally, when you are unable to do the work, and the person you work for needs to approve or consent to the substitute, this won’t mean you don’t provide personal service.

Control

An employer has “control” over its employees. The amount of control will depend on the role of the employee. A manager or director will not need as much control as someone who is less senior or experienced but the employer will still have some control.

The following factors are examples of control:

• deciding what work needs to be done;
• deciding how the work needs to be done;
• deciding when the work needs to be done;
• deciding how much they will pay for the work;
• subjecting individuals to disciplinary proceedings if rules are not followed;
• having procedures that must be followed; and
• giving instructions.

If you can choose your own hours and how you do the work, this may suggest that the “employer” does not have enough control and that you are not an employee. But it will depend on all the circumstances.

Other factors

There are many other facts a tribunal will take into account when deciding if an individual is an employee.

These include:

• who provides equipment, materials or tools to do the work?
• is the individual investing in the business or making a profit?
• is the individual registered as self-employed and pay tax on that basis?
• how is the individual paid – a wage or after sending an invoice?
• who takes the risk in relation to the work?

An employment tribunal will consider what factor are present and decide if the working relationship is strong enough to mean the individual is an employee.

The rights of workers

Sometimes, the working relationship will not be strong enough to make you an employee. However, you might be able to show that you are a “worker” and workers also enjoy certain important employment rights (but not those listed above).

These rights include:

• the right not to be discriminated against (see Discrimination claims);
• the right to paid holiday (see Holidays);
• rights in respect of how many hours you can be asked to work and what breaks you are entitled to (see How many hours can I work and what breaks should I get?);
• protection if you are a part-time worker;
• protection from being treated unfairly if you are a whistleblower (see Whistleblowing); and
• the right to the national minimum wage.

As all employees are workers, all employees also enjoy these rights.

Who is a worker?

Again, the laws giving these rights do not explain who will be classed as a worker very clearly.

They say that to be a worker there must be:

• a contract with the individual
• under the contract the individual agrees to perform personally any work or service for another party to the contract; and
• the other party to the contract is not a client or customer of any business of the individual.

So, to be a worker, you must have agreed to do work yourself and that work must not be being done as part of your own business.

A tribunal will decide whether someone is a worker by looking at all the facts about their working relationship.

As above, while any written contract will be considered, an employment tribunal is more concerned with what happens in practice – the reality of the situation. Just because you have been called a self-employed contractor or an independent contractor, does not mean you will not be able to show you are, in fact, a worker.

Contract

Breaking the definition down, there must be a contract.

This is just an agreement between you and the other party. It does not have to be in writing.

Under this agreement, there must be some obligation for you to provide the work or service and the other party to offer the work. But this might be on a short-term basis or be based on a particular project.

Personally perform

You must be doing the work although a very limited right to provide a substitute will not mean you are not personally performing the work.

The same things are taken into account as are considered when looking at whether someone is an employee. See “Personal Service” above.

Not providing the work or services as part of your own business

As with the “other factors” that are taken into account in deciding if someone is an employee, a tribunal will look at other parts of the working relationship to see whether you are really running your own business.

These factors will include:

• how you are paid (such as whether you raise an invoice);
• how long the contract is to last;
• whether you provide your own equipment;
• how you pay tax (whether as someone who is self-employed or not);
• what insurance you have;
• whether you are registered for VAT;
• whether you are allowed to work for other businesses;
• whether you have to wear the uniform of where you work;
• how much control the other party has over how and when you do the work; and
• how you advertise your services or business.

For discrimination claims, you only have to be personally performing the work or services. It does not matter if you are doing that as part of your own business. You will still be protected.

There is a lot of overlap between what is taken into account to decide whether someone is an employee and whether someone is a worker. Generally, it is easier to show you are a worker rather than an employee.

But if you have genuinely set up your own business and have complete control over what work you take on, the hours you work and how you do the job, together with providing your own equipment, negotiating your own price, advertising widely and are able to ask others to do the work for you (without any restrictions), it will be hard for you to show that you are actually a worker.

This is a really uncertain area of law and the government may decide to change the labels and what they mean to make it clearer in the future.

How we can help

If you have been classed as self-employed but how your working relationship works in practice suggests you are really a worker, or even an employee, you may not be benefitting from all of the employment rights to which you are entitled.

Are you being:

• paid at least the national minimum wage;
• allowed to take at least 5.6 weeks’ holiday a year; and
• paid for your holiday?

If not, you will have a claim.

In addition, if you have been discriminated against or being treated unfairly after raising a serious concern, you might also have the right to bring a claim.

Contact us

With an honest and ethical approach to law, at Truth Legal you will have access to our specialist team of lawyers to help you with all your employment law matters. Our Head of Employment Law is Navya Shekhar, an employment law solicitor with over 10 years’ experience.

If you think you are worker or an employee and are being denied your rights – call us on 01423 788538 or contact us here.