Employed or Not Employed – Is That The Question?
Recently a plumber won a legal battle for working rights in the latest of what has been a spate of court rulings over freelance operations in the modern workplace. The Court of Appeal case against Pimlico Plumbers decided that the plumber who had been working on a self-employed contractor basis for a number of years was really an employee and as such was entitled to normal employee protection.
Pimlico Plumbers have said that they will be taking the case to the UK Supreme Court to try to get the decision overturned and we will be watching to see how that turns out. But this is not the first case to challenge the Employed or Self-employed status of workers; Uber was also recently challenged in the courts. Two Uber drivers claimed the company was acting unlawfully by not paying holiday or sick pay, despite them being classed by Uber as “Self-Employed”. An employment tribunal in London ruled that those Uber drivers were ‘workers’ and were NOT self-employed.
Unions hate this type of ‘contract’ because the lose membership and so does the ‘taxman’ because it loses revenue and because of this industries with large numbers of self-employed workers are under ever increasing scrutiny and this very much applies to the Transport industry, where a high number of drivers are working as self-employed contractors. Operators should not assume that they can just call someone an independent driver and pay them on a gross basis leaving them to sort out their own tax and other arrangements. There are may other factors which have to be considered when determining who is and who is not, in reality, a true contractor and therefore entitled to be treated as being ‘self-employed’. It can be an expensive business if a judgement goes against a company as there is the matter of back tax, NI etcetera to be accounted for and the possibility of a fine on top.
Operators should also keep a wary eye on the view that their Traffic Commissioner might take – ‘fair competition’ includes paying taxes properly owed, and Traffic Commissioners are entitled to take into account the way in which operators employ their drivers when considering issues going to ‘good repute’.
The question in the title is well put. How do you know if your drivers are “proper” contractors, or workers masquerading to the outside world as independent contractors? And is your business possibly at risk? If you have contractors working for you make sure their paperwork is correct and ensure that your working arrangements reflect the legal requirements of each of the specific definitions.
If you need help with this, then please call us now on 01279 818280, or click here. One of our employment team will be happy to help.