How to identify who is a ‘true’ self-employed individual

Boards will have individuals providing services in all capacities, including as an employee and self-employed consultant.

However, the ‘label’ which the board attaches to the individual is not conclusive and an employment tribunal can look behind the label and determine that an individual is actually an employee or worker. Therefore, it’s important that boards are aware of, and can correctly ascertain the status of a worker.

A consultant working under a consultancy agreement will not be entitled to many rights that employees benefit from including holiday pay and statutory sick pay.  Importantly, the protection of unfair dismissal is only provided to employees.

Whilst it is important to have contractual documents with the individual, worker status is often ascertained by what happens in practice. The employment tribunal would look at the facts of each case, including what control the board has over the individual, whether the individual is required to provide personal service and whether the board is required to provide work.

In 2018, Gary Smith won a landmark case against Pimlico Plumbers when the Supreme Court upheld previous decisions that a ‘self-employed’ plumber was classed as a worker, giving him access to crucial employment rights. This case returned to the Court of Appeal as it involved £74,000 holiday pay! Furthermore, in 2021, Uber has been involved in decisions which have again held that the court can determine someone is actually a worker, despite what the contract says.

For further information, please contact Katie Davies on 01472 253917 or email katie.davies@wilkinchapman.co.uk