The boundary between employee, where you work for someone else, and when you’re a worker, again, working for someone else is not clear in the law. Whereas the self-employed have a checklist of tests to fulfil before HMRC recognises them as self-employed (the issue of contractors being another story), employees/workers do not have such a specified set of criteria.
Employment is how we traditionally understand ‘working for other people’: you have an employment contract, required to work regularly, cannot send someone else to be replaced and are entitled to various pay benefits such as Statutory Sick Pay and Maternity/Paternity Pay amongst other things.
Employees have a base level of rights, such as the right to request flexible working, time off for emergencies and protection against unfair dismissal.
Workers on the other hand are less easy to define. They may still have a contract or agree to the company’s terms and conditions in some other way, including by verbal agreement, but the work may be on a ‘casual basis’ also known as zero-hour contracts.
Workers may also have a limited right to send someone else in their place to do the work (known as subcontracting) but the employer must still have some degree of control over the manner and location of where the individual works.
Workers cannot claim unfair dismissal or statutory redundancy; however, they are entitled to the national minimum wage and annual leave.
If you run your own business or partnership, you are likely to ‘work for yourself’ and therefore be classed as self-employed. This means you are responsible for how, when and where you work. You can set the fees your charge clients and send them invoices rather than receive a wage from anyone else.
You have some rights, such as from health and safety legislation when working on a client’s premises and protection against discrimination. However, you do not benefit from sick pay or paid holidays. You are also responsible for your own tax and National Insurance Contributions.
Why does this matter?
If you are unsure as to your employment status, this can have a knock-on effect on your rights and obligations. It can also affect whether you are able to bring a claim against you employer for misconduct or unfair dismissal.