Thank you. A person’s legal rights in the workplace largely depend on their employment status, such as whether they are a worker, an employee, an agency worker, self-employed, etc. However, establishing a person’s employment status is not always an easy task. Problems may arise when there is uncertainty over it or when someone disagrees with what they are officially referred as by the employer.
It is usually irrelevant what a person is labelled as by their employer because their actual status would depend on the overall employment relationship and how they were treated, rather than what they were labelled as.
The main problem is that there is no single official way to determine someone’s status and it is usually done by checking if certain factors are satisfied. These factors have been established over years of case law and are still open to interpretation. Therefore, whilst they serve as a good reference point, in reality only a court can provide a definitive answer.
Generally there are three main types of employment status which are relevant in these circumstances: employee, worker and contractor (self-employed). As workers’ and employees’ rights largely overlap, the main issues are in distinguishing whether someone is self-employed or a worker/employee. The following factors are usually taken into account:
1. Personal service – contractors will provide their own services, but may also sub-contract work to others, or bring in outside assistance. Employees only provide their personal services.
2. Mutuality of obligation – contractors are free to accept or turn down work if they want to and the employer is under no obligation to offer them any work. Employees are obliged to accept work offered by their employer who also has a duty to offer work in the first place.
3. Right of control – contractors are likely to be in control of most aspects of the work done. Employees’ activities may be controlled by their employer, such as "what", "how", "where" and "when" work is done.
4. Right of substitution – contractors can sub-contract work, or bring in assistance. Employees, on the other hand, are unlikely to be able to offer a substitute for the work they do.
5. Provision of own equipment – contractors will normally supply all small tools and bring in or hire plant and machinery. Employees may sometimes supply own small tools or equipment but the employer will provide all plant and machinery.
6. Financial risk – contractors will quote on a job-by-job basis and can make more profit by more efficient working, or may incur loss if they overrun on time. Employees are paid whatever work is done, bear little risk and poor performance generally only affects appraisals or additional payments like bonus/commission.
7. Part and parcel of the organisation – contractors may become "a fixture" in that their work brings them to the company regularly, but acquire no additional responsibilities or privileges as a result. Employees are capable of being promoted or manage other staff. They also benefit from being in a pension scheme and get other benefits/perks usually given to employees.
The above are the most common factors used when determining a person’s employment status and should hopefully provide a reasonable indication of what the status in this case is. They can be useful in negotiations with the employer. However, as mentioned, in the end only a court can decide what the true employment status is so if you strongly believe that you are an employee then you have to take it further formally to be able to assert any of your rights.
Does this answer your query?