Self Employment - Further Caselaw Clarifies Rules
- Date: Wednesday 30th August 2017
- PDF: Download
As expected, following the Uber case last year, we are now seeing more court proceedings in regards to self-employment.
As a result of Gascoigne v Addison Lee, tribunals have been encouraged to make a judgement on the reality of the employment relationship, rather than the contract or agreement title.
Simply issuing a ‘Service Agreement’ as opposed to a ‘Contract of Employment’ or changing the ‘timesheet’ to an ‘invoice’ may not be enough to prove that the relationship is not based on contractual employment.
As previously advised, you must:
- Ensure that you are clear at the outset of the nature of the relationship.
- Set up a comprehensive Service Agreement, which includes clauses on insurance and subcontracting.
- Review the way in which you pay for PPE, uniforms, tools and training. In a true contractor relationship, these are not your responsibility in the first instance. The contractor may invoice you for certain expenses (such as materials), but expecting you to provide all of the above could indicate an employment relationship.
- Check that your contractors are trained and insured. If insurance is covered by your own public liability insurance, that’s fine. Just make sure that you mention this in your agreement. If your contractor requires certain qualifications, then they should already have these before you engage them. If you are willing to support them financially, a repayment plan should be set up and signed by both parties.
- Let the contractor set their own rates of pay. This can obviously be discussed but you should ask them for a service quote, not expect them to fall in line with whatever you pay your employees.
- Introduce contractors as such – not as part of your team. If they run their own company, they are working on your behalf as a subcontractor, not as an employee.