Summary of Threat
Contractors often face predatory claims for holiday pay from self-employed tradesmen, once a contract is ended.
These claims can be backdated for the whole period of an engagement sometimes for years.
A contractor who is unsuccessful in defending one claim can be faced with the domino effect of multiple follow up claims from disgruntled tradesmen.
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Speak To Colette Specialist Construction Payroll Advisor
THREAT IN DETAIL
The class of Worker was introduced with the 1998 working time directive, and although it has been with us for close to twenty years, it is still an often mis-understood concept. In simple terms, a Worker is an intermediate class of employment status, somewhere between an employee and a fully self-employed sub-contractor. If a tradesman is required to perform the work personally, and is not suppling his engager as part of his own business undertaking, then he is likely to be a Worker. There are significant costs associated with a tradesman being classed as a worker, and these stem principally from the entitlement to the statutory minimum level of paid holiday.
Worker status claims
A claim from a self-employed sub-contractor for worker status most often comes when an engagement has been ended. Although there is often complete agreement between the contractor and sub-contractor regarding the terms by which he is engaged at the outset of the agreement, a change of heart can often come from the tradesman after he has been let go (especially if there is any animosity involved). A contractor who is unsuccessful in defending these sorts of claims can be hit with costs for unpaid holiday pay for the whole length of the engagement, fines for unlawful dismissal, unlawful deductions from wages, etc. The cost of these claims, including legal expenses, can run into tens of thousands of pounds.
What is the solution?
By appointing EEBS as the supplier of your sub-contract labour, you create an un-breachable Firewall that minimises the chances of an employment tribunal reclassifying your self-employed sub-contractors as workers. We have successfully defended many claims for worker status, and offer an unconditional guarantee that, if we were to lose a case, we would pay all of the costs.