What can one be?
In employment law a person’s employment status helps determine:
- their rights
- their employer’s responsibilities
A person may have a different employment status in tax law.
The main types of employment status are:
- Worker (casual or irregular work)
- they have a contract or other arrangement to do work or services personally for a reward (a contract can be written or unwritten)
- their reward is for money or a benefit in kind, for example the promise of a contract or future work
- they only have a limited right to send someone else to do the work (subcontract)
- their employer has to have work for them to do as long as the contract or arrangement lasts
- they are not doing the work as part of their own limited company in an arrangement where the ‘employer’ is actually a customer or client
- they are entitled to certain employment rights (minimal wage, minimal holiday pay, time off, statutory pays – not leaves, protection against unlawful discrimination, etc)
Workers usually are not entitled to:
- minimum notice periods if their employment will be ending, for example if an employer is dismissing them
- protection against unfair dismissal
- the right to request flexible working
- time off for emergencies
- Statutory Redundancy Pay
- Employee
An employee is someone who works under an employment contract and someone who works for a business is probably an employee if most of the following are true:
- they’re required to work regularly unless they’re on leave, for example they’re on holiday or on sick leave or on maternity leave
- they’re required to do a minimum number of hours and expect to be paid for time worked
- a manager or supervisor is responsible for their workload, saying when a piece of work should be finished and how it should be done
- they cannot send someone else to do their work
- they get paid holiday
- they’re entitled to contractual or Statutory Sick Pay and to maternity pay or to paternity pay
- they can join the business’s pension scheme
- the business’s disciplinary and grievance procedures apply to them
- they work at the business’s premises or at an address specified by the business
- their contract sets out redundancy procedures
- the business provides the materials, tools and equipment for their work
- they only work for the business or if they do have another job, it’s completely different from their work for the business
- their contract, statement of terms and conditions or offer letter (which can be described as an ‘employment contract’) uses terms like ‘employer’ and ‘employee’
- Self-employed and contractor
Employment law does not cover self-employed people in most cases because they are their own boss.
If a person is self-employed, they have:
- protection of their health and safety
- protection of their rights against discrimination (in some cases)
- the rights and responsibilities set out by the terms of the contract they have with their client
Someone is probably self-employed if they’re self-employed for tax purposes and most of the following are true:
- they put in bids or give quotes to get work
- they’re not under direct supervision when working
- they submit invoices for the work they’ve done
- they’re responsible for paying their own National Insurance and tax
- they do not get holiday or sick pay when they’re not working
- they operate under a contract (sometimes known as a ‘contract for services’ or ‘consultancy agreement’) that uses terms like ‘self-employed’, ‘consultant’ or an ‘independent contractor’
- Director
Company directors run limited companies on behalf of shareholders.
Directors have different rights and responsibilities from employees, and are classed as office holders for tax and National Insurance contribution purposes.
If a person does other work that’s not related to being a director, they may have an employment contract and get employment rights.
- Office holder
A person who’s been appointed to a position by a company or organisation but does not have a contract or receive regular payment may be an office holder
