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Saturday, 21 November 2009

How to work out your employment status

There is no one thing that completely determines your employment status. If there is a dispute about your status between you and the person or company for whom you work, an Employment Tribunal will make its decision based on all the circumstances of a case.

How to work out your employment status for employment rights

When looking at your employment status the sorts of things the Employment Tribunal will look at fall into four main categories. If you are unsure if you are a worker, employee or self-employed try answering the questions below that are divided into the categories.

The more of the questions you answer 'yes' to, the more likely it is that you are self-employed. If you answer 'no' to most of the questions then you are likely to be an employee. If you answer yes to some of the questions and you are not in business on your own account, you are likely to be considered a worker rather than employee.

Try thinking about it as a sliding scale with 'employee' at one end and 'genuinely self-employed' at the other.

Category one: control

The extent to which the employer decides what tasks you do and how you do them:

  • do you have the final say in how the business is run?
  • can you choose whether to do the work yourself, or send someone else?
  • can you choose when and how you will work?

Category two: integration

The extent to which you are part of the organisation:

  • if you need assistance, are you responsible for hiring other people and setting their terms of employment?
  • are you excluded from internal company matters such as corporate training and staff meetings?
  • are you exempt from having action taken against you using the company disciplinary procedure?
  • are you excluded from company benefits and pension schemes?

Category three: mutuality of obligations

The extent to which your employer is required to offer you work and whether you are expected to do it:

  • does your employer offer work only if and when it is available?
  • can you decide when you will work and can you turn down work when offered?

Category four: economic reality

The extent to which you bear the financial risk:

  • are you responsible for meeting the losses as well as taking the profits?
  • are you responsible for correcting unsatisfactory work at your own expense?
  • do you have to submit an invoice to the company for your pay?
  • do you get a fixed payment for a job (including materials and labour)?
  • do you provide the main items of equipment needed to do the job?
  • do you work for a range of different employers?

Remember that this is for guidance only and a definitive answer can only be given by an Employment Tribunal or court.  You should get advice from an expert if you are unsure. The Advisory, Conciliation and Arbitration Service (Acas) offers a free, confidential and impartial helpline that can offer you guidance on your employment status.

What to do if you have problems

If you have a disagreement with your employer about your status and associated employment rights, try to resolve the matter with them directly first of all. For example, if your employer is refusing you holiday pay because they say you are self-employed. If you have a workplace representative (eg a trade union official), they may be able to help.

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