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Worker or self-employed? A drive to determine status

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Uber, a company which allows users to book and pay for a cab through a smartphone app, is reportedly defending claims in the Employment Tribunal made by drivers who consider that they are workers for Uber. Uber considers these drivers are self-employed. 

The line between self-employed (also known as ‘independent contractor’) and worker is sometimes a difficult one to define, but it can have major implications for both the organisation and the individual.

Workers’ employment rights
Workers have more employment rights than those who are self-employed, including entitlement to:

               1.    Paid holiday (5.6 weeks for a full time worker)
               2.    Protection against unlawful deduction from wages
               3.    National minimum wage
               4.    Rest breaks

How can you tell if someone is a worker or self-employed?
Given that workers are entitled to certain employment rights, it is important for organisations to be able to identify which individuals are workers and which are self-employed.  While there is no black and white test to definitively determine such status, the following are a few indications of worker/self-employed status:

WorkerSelf-employed
Agrees to personally provide servicesHas an unlimited right to provide a substitute
Does not carry on their own businessHas their own business and the organisation is one of its customers
Uses the organisation’s resources and materials – may be required to wear organisation’s uniformProvides own resources and materials – not required to wear the organisation’s uniform
Organisation exercises control over individual’s workOrganisation does not control the way in which the individual carries out the work
Takes little or no financial risk and receives a fixed wage.  Relies on organisation for workTakes financial risk with an opportunity to profit from their own good performance

 

 

 

 

 

 

 

 

 

These are only some indications of status and an Employment Tribunal will take into account all of the relevant circumstances.

Although how an individual is taxed is another indication of their employment status, you should note that if an individual is taxed as self-employed, this does not necessarily mean they are considered self-employed for the purpose of determining their employment rights.

We will wait to see whether the Employment Tribunal considers that the Uber drivers are workers or self-employed and which of the above (or other) indications they take into account to determine this.

If you are not sure whether the people you engage are self-employed contractors or workers, contact our specialist team of employment lawyers, who can also advise you on the documentation you should have in place. 

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