Back in February 2021 I wrote a post on the subject of ascertaining whether an individual is a ‘worker’ or a truly ‘self employed contractor’.  It is very important that employers reach the right conclusion if they are not to fall foul of HMRC, or the Employment Tribunals.

A string of cases have come before the Courts in the past six months which show that the bar is very low when it comes to deciding whether an individual is a worker.  The Uber case hit the media headlines but a similar case against Pimlico Plumbers was almost as expensive for the Respondent and more recently the Nursing & Midwifery Council have found themselves on the wrong side of the law.

A ‘worker’ is someone who provides a personal service to your organisation, whether that is frequent or infrequent.  And importantly whether there is a mutuality of obligation – that is whether you are obliged to provide work and whether they are obliged to accept work – or not.

Workers are entitled to annual leave and it is the failure to provide paid annual leave that often brings a claim to the Employment Tribunals – and compensation may be backdated over many years.  And that is before HMRC become involved!

The Courts will always look at the reality of the situation so what you write in any contract may not hold any water when it comes to a legal decision as to whether or not an individual is a ‘worker’ or a truly independent contractor.

An independent contractor must provide their own tools and supplies and keep their training up to date at their own expense.  If your organisation provides tools and/or training then the individual is almost certainly a worker.

An independent contractor does not have to comply with the organisation’s hours of work or the organisation’s policies and procedures – they are contracted to provide an outcome to contractually specified standards and time scales.  If your organisation controls the way in which the work is delivered, the individual is almost certainly a worker.

An independent contractor is not part of your organisation.  The independent contractor does not wear your ‘uniform’ or logo and does not manage your staff.  If you want the individual to wear your logo then they are almost certainly a ‘worker’.  In the case of Pimlico Plumbers the individual drove a Pimlico Plumbers’ van and wore a Pimlico Plumbers logo so clearly not an independent contractor.

An independent contractor can send a suitably qualified substitute, specifically they do not have to provide the service personally.  If you insist on a personal service the individual is likely to be a ‘worker’ and entitled to annual leave.

If you are using an independent contractor make sure you do your due diligence.  For example, you will want to see a copy of their professional liability insurance certificate and, if appropriate, evidence of their qualifications.

If you want someone to turn up for work regularly for a short period of time; if you want them to wear your company logo and perhaps supervise your staff then you really should consider employing that individual on a fixed term contract rather than trying to negotiate your way around the worker v independent contractor minefield.

Need help? Advice and guidance is available at 07766 167160

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