BLP - Differentiate between employed and self-employed

Why employment status is important?

Many employment rights such as the right not to be unfairly dismissed, and the right to redundancy pay, rely on you being an employee.

Many employers take on self-employed workers in order to avoid employee rights and having to pay tax and national insurance for their employees.

It doesn’t matter how your employer refers to you as (employed or self-employed). What matters is what happens in practice, how you work? How much work you do? Do you use your own tools or the employer provides them?

The main differences:

Employee	Has a contract of service (expressly or implied). Existence of a maximum hours threshold and minimum wage.	including unfair dismissal, redundancy and maternity rights - includes all those rights enjoyed by workers
Self-Employed	A person in business on their own account. Have fewer rights except those they negotiated for themselves.	Certain rights in respect of trade unions and under the Human Rights Act only.

The courts have created a test to assess whether a worker is employed or self-employed:

• Control – the greater the control exercised by an employers over the manner in which its workers carry out their duties the more likely they are to be employees.
• Mutuality of obligation to provide and to do work – employers are obliged to offer their employees work and employees are obliged to do it, so the greater the obligation the more likely that they are employees.
• Substitution – employees are usually obligated to carry out their duties personally so If the worker can send along a “stand-in” then they are more likely to be self-employed.