Employment Rights and Worker Status

The class of Worker was introduced by the 1998 working time directive, and although it has been with us for over 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 tradesperson is required to perform work personally and is not suppling his engager as part of his own business undertaking, then the employment Tribunal Service is increasingly likely to find in favour of the individual being a Worker. There are significant additional costs associated with worker status rather than full self-employment, and these stem principally from the right to receive holiday pay.

Interestingly, because worker status does not attract Employers National insurance contributions, the issue holds no interest to HMRC.

Employment Rights Claims

A claim from a self-employed sub-contractor that he was, in fact an employee all along most often comes when an engagement has been ended. Although there is always 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 tradesperson after the job is over (especially if there is any animosity involved). This has become an issue again for the industry by the removal of fees in 2017 for an individual to access an employment Tribunal, coupled with the rise of the utterly unscrupulous “no win no fee” lawyers, only looking to generate claims where none exist.

A contractor who is unsuccessful in defending these 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, click here to find out what happened to Pimlico Plumbers. There is also no doubt that the “pendulum” continues it’s inexorable swing towards the view that an individual has more rights than the potential employer– indeed, the employment tribunal service has never lost sight of the view that it exists to support individuals in their claims against employers: in the field of Construction the finding of worker status is fast becoming the default setting for the tribunal.