It’s time for regional bosses to know their self-employed contractors from their workers and employees

Tom Martin - firing a warning shot over the bows of regional bosses.

EMPLOYMENT law expert Tom Martin has fired a warning shot over the bows of regional bosses who support the UK’s burgeoning ‘gig’ economy, after a recent case heard by the Employment Appeal Tribunal (EAT).

Tom, in the employment team at Wilkin Chapman solicitors, highlighted the case of a doctor who had provided ‘freelance’ out of hours GP services for a company called Community Based Care Health Limited (CBCH) for over 12 years. He said it represented the latest in a line of tribunal decisions where judges had protected individuals’ rights when determining employment status.

The doctor operated through her own limited company, held her own insurance, was not obliged to accept shifts given by the company and provided her own equipment. Despite this, the EAT upheld an Employment Tribunal decision that the doctor should be classed as a worker rather than self-employed and was entitled to the various rights and protections associated with that title.

Tom explained how this case followed on from two high-profile cases over the last year. One involved Uber drivers who won their right to be classed as workers rather than independent contractors, and the other being that of Pimlico Plumbers’ founder Charlie Mullins, who lost a Supreme Court challenge against the decision that one of his contractors (Gary Smith) should be classed as a ‘worker’.

This all comes as the IR35 ‘off-payroll’ worker regulations, which have operated in the public sector since 2016, are due to be extended into the private sector next April. These rules apply to businesses that engage individuals to provide services through a Personal Service Company (PSC) – such as consultants and contractors. These businesses are obliged to deduct the appropriate tax and National Insurance Contributions at source from the payments made to the PSC, where that individual’s ‘employment status’ would ordinarily be that of an employee or worker. It is for that end-user business to make this determination, rather than the individual in question or the PSC.

“It is critical that businesses make a clear separation between those people who are directly employed by them and have the protection of the employment rights which come along with this, and those who are self-employed contractors or freelancers and as a result are not entrenched into the business in the same way,” explained Tom.

“And, when we examine this most recent case, we see a number of facts that would ordinarily suggest self-employed status, but a Judge finding that they are in fact workers. This is further evidence of the trend of tribunals finding in favour of individuals, granting them as much protection as can be afforded. With the introduction of the new off-payroll working rules coming in under IR35, which place a further burden on employers to make determinations regarding employment status, it is becoming increasingly more important for bosses to know who is working for their organisations, and in what capacity,” he added.