The status of someone’s employment is a lot more complicated than it used to be. With contractors, freelance staff, workers and employees making up the workplace it’s become a complex issue for employers to work out the rights of each person. The guidelines we’ve laid out here might help you make sense of it all.
What is an employee?
Some core legal protections only apply to employees, for example the right not to be unfairly dismissed, so it’s useful to know what an employee is.
- An employee is an individual who has entered into or works (or worked) under the terms of a contract of employment. The contract can be expressly agreed (in writing or orally) or implied by the nature of the relationship
To have employee status:
- An individual must be obliged to do the work personally (rather than being able to send a substitute)
- The employer needs to provide the work and the employee is obliged to accept the work
- The employer needs to have some control over the way the employee does the work
Workers are entitled to fewer statutory rights than employees, but do have some key legal rights, including:
- Protection from discrimination
- Protection against unlawful deduction from wages
- Entitlement to the national minimum wage
Just because you’re viewed as self-employed by HMRC for tax reasons it doesn’t necessarily mean you’ll be viewed like that for employment reasons, so it’s really important for you to know the terms of your employment. This really will affect your rights as:
- The self-employed enjoy no statutory employment rights (although they may be protected by discrimination law)
- An employer is responsible for deducting tax and national insurance at source (PAYE) from the salary paid to employees. Self-employed individuals are responsible for paying their own tax and national insurance under self-assessment
As you can see, none of this is particularly straightforward but the effects can be considerable. If you have any questions we’re more than happy to advise you in more detail on any of the above.