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Do employees and the self-employed have different rights?

Telling the differnce between the employed and the self-employed can be tricky but is important - because they do indeed have different rights, stress barristers Michael Salter and Chris Bryden

Telling the differnce between the employed and the self-employed can be tricky but is important - because they do indeed have different rights, stress barristers Michael Salter and Chris Bryden

THE SITUATION

Technically some of our staff are self-employed.

I have heard that there is a difference in the rights afforded to employees and those afforded to the self-employed. Is this right?

THE ADVICE

The short answer to this is: yes.

The most fundamental right that is afforded to an employee is the right not to be unfairly dismissed. Self-employed workers do not receive such protection.

However, certain protections apply to all workers, whether they are employees or self-employed.

For example, self-employed workers are protected from discrimination in the same way as employees.

It may be that the practice engages a number of workers, some of whom are employees and some of whom are not.

A practical difficulty is telling the difference between the two categories. This can be extremely important, particularly when considering "dismissing" a worker.

The law looks for three features when determining a worker's employment status: the obligation to provide work personally; mutuality of obligation, and control.

First, the obligation to provide work personally means that the worker is not allowed to send someone else in their place to carry out the work.

So, a practice manager is likely to be required to do the work personally; an IT contractor may not be.

Mutuality of obligation means exactly what it says. Both the employer and employee are bound by mutual obligations to one another.

This would include the obligation on the employer to provide work and the obligation on the employee to carry out that work.

A further mutual obligation is for the employer to pay for that work and for the employee to carry out that work.

So, again, a practice manager must carry out the work she is provided with and is entitled to payment for it. An IT contractor may be able to refuse to carry out work; and if he does not work, he does not get paid.

Finally, control.

This of course does not mean that the employer must sit watching the employee every day, just that the ultimate authority for the performance of the work by the employee rests with the employer.

The practice manager must therefore act in accordance with instructions; an IT contractor can carry out an assigned task as he chooses, within agreed parameters.

These three factors are called the "irreducible minimum." Without them there can be no contract of employment at all.

However, confusingly, the presence of them does not necessarily mean that the worker must be an employee.

Instead all the surrounding circumstances must also be examined, where the irreducible minimum is present, to determine whether a worker is an employee.

The details that a tribunal would look for include who provides the worker with equipment; whether the worker is an integral part of the practice, and whether the worker has the opportunity of profiting from the performance of their role (e.g. rather than being on a set wage they stand to receive more money the more work they do).

Other more obvious factors include who pays the worker's tax and national insurance, or what the parties themselves define their relationship as, although neither of these factors on their own are conclusive.

Michael Salter and Chris Bryden are barristers at 2 Gray's Inn Square Chambers: www.2gis.co.uk Michael Salter is also able to accept instructions directly from readrs of Pulse. Please visit www.michaelsalter.net for guidance on how to instruct him. Legal points are provided for discussion only and are given without obligation. For specific legal advice consult your solicitor or contact Michael Salter via his website

Legal lessons: Do employees and the self-employed have different rights?

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