Am I a worker, an employee or self-employed?

This depends on the contractual relationship you have with your employer. The distinction is important because many important rights – such as the right to claim unfair dismissal or maternity leave – depend on being an employee. For other rights, such as the right to be paid the National Minimum Wage, you must be a worker.

All employees are workers, but not all workers are employees. The third category – the genuinely self-employed – have very few employment rights.

Every year court cases hang on the distinction between the three categories and unfortunately there is no clear definition. However, there is a rough rule of thumb:

  • If your employer has to provide work for you personally, which you can't turn down, on a regular basis, says when and where the work is to be done, supplies the tools or other equipment, pays tax and National Insurance on your behalf, and can subject you to a disciplinary procedure if you don’t follow the rules or if your performance is ‘unsatisfactory’, then you are probably an employee, and have what is known as a 'contract of employment'.
  • If you are contracted to do work personally but you are not an employee, then unless you are genuinely running your own business, freely supplying goods or services to your own customers, then you are likely to be a 'worker'. You are therefore entitled, for example, to the National Minimum Wage, holiday pay and other working time rights.
  • If you are genuinely running your own business, meaning that you are free to decide when you work, can choose to substitute someone else to do your work instead of you, can carry out work in the manner you best see fit, make your own sickness and holiday arrangements, and pay your own tax and National Insurance, you could be a self-employed person, contracted to provide a service to the employer. Hence your contract is known as a 'contract for services'.

Many people are happy to be self-employed and some occupations, such as journalism, are likely to have a high proportion of self-employed workers. However, some unscrupulous employers deliberately miscategorise individuals as self-employed to avoid tax, National Insurance Contributions and employment obligations, such as the National Minimum Wage or holiday pay.

Important case law, especially the landmark Supreme Court judgement of Autoclenz Limited v Belcher [2011] UKSC 41, makes it clear that just because signed contract documentation makes it look as if someone is self-employed, that is by no means the end of the story. Employment tribunals must take into account the inequality of bargaining power between employer and employee, and must look at the whole context, not just the contract documents, to make sure the written contract document genuinely reflects what the parties intended the employment relationship to be.

Working out who is an employee and who is self-employed is contentious and often unclear. If you are unsure, you should seek advice from Citizens Advice. Contact your union if you are a member, or use one of the resources on workSMART's free help page.

Note: This content is provided as general background information and should not be taken as legal advice or financial advice for your particular situation. Make sure to get individual advice on your case from your union, a source on our free help page or an independent financial advisor before taking any action.

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