Employed or Self Employed?

A recent Supreme Court judgement has again highlighted the troubled area of what is employment and what is self-employment and shows that it is not just H M Revenue & Customs who can challenge the status.  The case was Autoclenz Limited v Belcher and Others and involved a car-cleaning company.  The company had a workforce of self-employed valeters and was taken to an Employment Tribunal by its workers who claimed that they were in fact employees and entitled to National Minimum Wage, holidays and other employment rights.

The company had a contract in place that did and said all the right things regarding having a self-employed workforce and an HMRC review in 2004 had concluded that the ‘balance of probabilities’ supported self-employment. But in a case brought by the workers in 2008, the Employment Tribunal came to a different conclusion and in a judgement delivered in July this year the Supreme Court has backed that decision.  The main reason was simply that what happened in practice differed from the terms of the contract.  Looking at the day to day behaviour of the company and the workforce led the Employment tribunal to conclude that the workforce were employees.

This all goes to show that the area remains a potential financial and legal minefield and that proper advice is needed and should then be followed.

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