A recent employment tribunal has sent a clear message to contractors across the UK: being paid under CIS does not automatically mean someone is self-employed.
The case, heard in Manchester, involved a joiner who took his claim for unpaid holiday and unlawful deductions against a small contractor, Rivergate Developments Ltd.
The tribunal sided with the joiner, awarding him over £1,000 in compensation.
So what went wrong?
The details of the employment tribunal
The joiner, known only as Mr K Brophy, worked for Rivergate from December 2024 until the end of January 2025. He was paid under the Construction Industry Scheme (CIS) at £95 per day.
Rivergate argued he was self-employed and therefore not entitled to holiday pay, and that they were justified in deducting money for what they described as poor workmanship.
But the tribunal judge didn’t agree.
CIS = tax status, not employment status
Judge Barker ruled that CIS status does not decide employment status. An individual can be paid under CIS and still be considered a “worker” under employment law.
The judge looked at how the joiner was actually engaged:
- He worked full-time, with set hours, under supervision.
- He had no say in the terms of his engagement.
- He was provided with a “starter pack” of instructions.
- He couldn’t send a substitute to do the work.
- He used the company’s materials and was paid by the day.
- He had no insurance of his own.
- These factors led the judge to conclude that Brophy was a worker — even though he wasn’t technically an employee. As such, he was protected under the Employment Rights Act 1996. That meant:
- He was entitled to holiday pay.
- His wages couldn’t be deducted without written consent.
Paying through CIS: the bigger picture
This ruling underlines a crucial point for contractors: simply paying someone through CIS does not shield you from employment claims.
If the working relationship looks like employment – regular hours, supervision, no substitution – then a tribunal may decide that your subcontractor is legally a “worker.” And that comes with extra rights, including paid holiday.
This is not an isolated risk. It follows the same principles as the Uber drivers case in 2021, where the Supreme Court ruled drivers were workers, not self-employed, despite how the business defined them.
Why this matters to contractors
For small contractors, the consequences can be costly. As this case shows, a relatively short engagement led to over £1,000 being paid out in backdated holiday pay and deductions. Longer-term arrangements could see claims reach far higher sums.
And beyond the financial hit, defending yourself at tribunal is time-consuming and stressful — especially when the case revolves around technicalities of worker status.
How EEBS protects you
At EEBS, we make sure this situation can’t happen. Our model is different from an umbrella company or a DIY CIS arrangement. When you engage subcontractors through EEBS, we take them on as our subcontractors. We manage the CIS, payroll, compliance and HMRC obligations.
Our Managing Director, Nick Pilgrim says, “This case is a reminder that CIS is about tax status, not employment law. Too many contractors think CIS alone protects them, but as we’ve seen, it doesn’t. At EEBS, we’ve built our service to remove that risk entirely. When subcontractors are engaged through us, our clients can be confident they’ll never face a claim like this. It’s about giving peace of mind, so contractors can focus on building their business rather than worrying about the courtroom.”
That means:
- You’re not exposed to tribunal claims around worker status.
- Holiday pay disputes don’t fall back on you.
- HMRC compliance is handled on your behalf.
- You can get on with running your business without fear of costly surprises.
CIS can be a minefield. And as this tribunal shows, getting it wrong can cost you. With EEBS, you don’t need to second-guess whether your subcontractors might later be classed as “workers.” We take on the responsibility… and the risk.
