Definitions for 'worker,' 'self-employed,' and 'agency
worker'
‘WORKER’
‘Worker’ is a
hybrid category, somewhere between ‘employee’ and ‘self-employed’.
A worker is an individual who works for an employer, not under a
contract of employment, but under ‘a contract for services (like
those who are self-employed)’. The key distinction between ‘worker’
and ‘self-employed’ is whether the worker has to provide his or her
services personally (in which case they will usually be a ‘worker’,
or whether they are entitled to substitute someone else to do their
work for them (in which case they will usually be ‘self-employed’).
Workers qualify for some, but not all, statutory employment
rights.
‘SELF-EMPLOYED’
Self-employed people, on the
other hand, are not entitled to most statutory employment rights.
The only rights they enjoy are the benefits under their contract
and, in some limited circumstances, the right not to have
unauthorised deductions made from their pay and not to be
discriminated against on grounds of sex, race, nationality,
disability, religion or belief, or sexual orientation. A
self-employed person provides the employer with his or her services
but remains independent (i.e. they are genuinely in business on
their own account). The agreement between the two parties in this
situation is a ‘contract for services’. It is always worth querying
whether an individual is in fact self-employed. For example, even
if the contract allows for a substitute to do the work but in
reality it is the employer who decides who the substitute can be,
the individual may in fact be a ‘worker’ and will therefore qualify
for some employment rights.
The issue of an individual’s employment status
can be complex. You should never assume that a member does not have
employment rights due to their employment status, and should always
contact your full-time officer for advice.
THE DIFFERENCE BETWEEN BEING EMPLOYED
AND SELF-EMPLOYED:
Whether someone is an employee or self-employed may, ultimately, be
a matter for the courts to decide. In such circumstances, courts
and tribunals apply a series of tests in order to decide whether an
individual is employed or self-employed. These are summarised in
the following table:
|
Test
|
Employed
|
Self-employed
|
|
Degree of control
|
The worker is told what to do, how and when to
do it.
|
The worker is taken on to do a particular job
and decides how it should be done.
|
|
Integration
|
The worker forms part of the organisation.
|
The worker is in business on his or her own
account – he or she can work for other people and employ
others.
|
|
Obligations
|
The organisation is obliged to provide work,
and the worker is obliged to do it.
|
There is no obligation on either side.
|
|
Payment
|
The worker receives pay or salary with PAYE
deductions, a payslip, etc.
|
The worker issues an invoice when job is
finished and receives a fee with no deductions. The worker also has
the ability to make a profit or loss.
|
|
Benefits
|
The worker has rights to paid holidays and
sick leave.
|
The organisation has no involvement when
worker is unavailable for work.
|
|
Ownership of equipment
|
The equipment and materials are provided by
the organisation.
|
The worker’s own premises, tools and
materials.
|
'AGENCY WORKERS'
These
are arguably a further category. They may be classed as
self-employed or employees of the agency who provides them with
work depending on their circumstances and changing case
law.
A worker supplied through an agency will not
normally be considered an employee of the organisation in which he
or she is working, even though the organisation effectively
controls what the worker does. In the majority of circumstances,
they will be considered as an employee of the agency and are
therefore able to claim employment rights from the agency.
The European Commission is currently
considering introducing legislation to give agency workers the
right to be no less favourably treated than other employees at the
organisation in which he or she is working. However, it will be
some time before this right comes into force in the
UK.
Legal provisions that apply specifically to
agency workers are:
- No fees – an employment agency cannot charge
you a fee simply for finding you work or putting you on their
books;
- Getting your wages – an agency cannot
withhold your pay simply because they haven’t received their
payment from the company or organisation where you worked;
- A written statement of terms and conditions –
when you sign on with an agency you should be given a written
statement of terms and conditions before you start any work;
- Workers seeking employment through an agency
have the right not to be discriminated against in the offered terms
of employment (this includes on grounds of their sex, race, trade
union activities, etc.);
- In cases of discrimination, it is usually
possible to claim both against the agency and the principal
employer (where the latter discriminated).
