Are they or aren't they an employee?

Gemma Workman

Gemma Workman

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Phone 01952 525967

Are your contractors self-employed for tax purposes and personally registered for VAT? Then your company may be walking a very fine line when it comes to employment rights.

Gemma Workman, from Martin-Kaye Solicitors in Telford, said the Court of Appeal had ruled that a plumber who was considered to be self-employed was actually employed by the business that hired him.

“The plumber carried out work solely for the one company and signed an agreement that his work would be governed by terms and conditions set out in their staff manual.

“This included rules on working hours, uniform and appearance, restricted his ability to work for himself or other companies, insisted he should use a company van, and said that he could only swap jobs with other members of their staff.

“But after several years working under this arrangement, the plumber had a heart attack and the company ended their association with him.

“He took them to a tribunal, but because of his tax status and the fact he had submitted invoices for his work, the company said he was not entitled to make a claim.

“But as part of his case, the plumber had made claims for unpaid holiday pay and unlawful deductions from his wages, for which he didn’t need to show he was an employee, he just needed to be a ‘worker’ for the company.

“The court agreed he was a worker because under the terms of the agreement, he was forbidden to send anyone in his place to do the work required as the company insisted he should carry out the work in person.

“And despite the company taking the case right to the Court of Appeal, they upheld the tribunal’s decision that the plumber was a worker regardless of his self-employed tax status.

“The message to employers is very clear – if you place any restrictions on who else a self-employed contractor can work for while they are working for you, you will almost certainly be storing up trouble.

“You must also allow them to send someone else to work in their place if they are unable to fulfil their work obligations for you.

“If you’re not flexible in your approach and you do impose restrictions, they will be your worker no matter how they are registered for tax purposes, and they will be entitled to a whole raft of worker’s rights.”


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