Are you a 'worker', 'employee' or 'self-employed'?
There are three types of employment status - you could either be a 'worker', an 'employee' or 'self-employed'. Your employment status will help define what rights and responsibilities you have at work. Find out the basic employment rights for each employment status.
The definition of 'employee' and 'worker' differs slightly from one area of legislation to another, but generally if rights apply to a 'worker' they also apply to an 'employee'. If you are self-employed for tax purposes, you're normally 'self-employed' for employment rights purposes.
What is an employee?
The majority of people in work are employees. You are classed as an employee if you are working under a contract of employment. A contract need not be in writing as it exists when you and your employer agree terms and conditions of employment. It can also be implied from your actions and those of the person you are working for.
Your contract will normally set out what you are expected to do and you will usually be expected to do the work yourself. Put simply, you cannot send someone else to do your work for you.
As an employee, your employer is obliged by law to deduct Income Tax and National Insurance contributions from your salary or wages before paying them to you. You are also entitled to all minimum statutory employment rights including:
- maternity, adoption and paternity leave
- the right not to be unfairly dismissed
- statutory redundancy pay
- all the rights that are given to 'workers'
What is a worker?
This is a broader category than 'employee' but normally excludes those who are self-employed. A worker is any individual who works for an employer, whether under a contract of employment, or any other contract where an individual undertakes to do or perform personally any work or service. Workers are entitled to core employment rights and protections. The following groups of people are likely to be workers but not employees:
- most agency workers
- short-term casual workers
- some freelancers
Providing any other qualifying conditions are met, all workers have rights to:
- the National Minimum Wage
- rest breaks, paid holiday and limits on night work under the Working Time Regulations
- protection against unauthorised deductions from pay
- maternity, paternity and adoption pay (but not leave)
- protection against less favourable treatment because of being part-time
- Statutory Sick Pay
- protection against less favourable treatment if you make a disclosure in the public interest (often called ‘whistleblowing’)
- not to be discriminated against unlawfully
- The National Minimum Wage rates
- Working Time Limits (the 48 hour week)
- Holiday entitlements: the basics
- Rest breaks
- Working at night
- Work and families
- Part-time work
- Sick pay rights
- Protection of whistleblowers
- Introduction to discrimination
What's being self-employed?
If you are self-employed you do not have a contract of employment with an employer. You are more likely to be contracted to provide services over a certain period of time for a fee and be in business in your own right.
You will also pay your own Income Tax and National Insurance Contributions. You do not have employment rights as such if you're self-employed since you are your own boss and can therefore decide, for example, how much to charge for your work and how much holiday to give yourself.
You do have some legal protection, however. You must not be discriminated against and you are entitled to a safe and healthy working environment on your client's premises for example. Self-employed women who have recently left their jobs may be entitled to Maternity Allowance.
It is possible, in some limited cases, to be self-employed for tax purposes but classified as a 'worker' or an 'employee' for employment rights purposes – see section on “How to work out your employment status for employment rights”. This can occur because Industrial Tribunals or courts may not consider all of the same facts when considering classification for employment rights purposes that HM Revenue and Customs, the Commissioners (who rule on tax and National Insurance matters) or courts do when considering classification for tax and National Insurance purposes.
Working out your employment status for employment rights
There is no one thing that completely determines your employment status. If there is a dispute about your status between you and the person or company that you work for, an Industrial Tribunal will make its decision based on all the circumstances of a case.
The sort of things the tribunal will look at fall into four main categories. In this section you will find some questions to help explain what the categories mean. Try thinking about it as a sliding scale with 'employee' at one end and 'genuinely self-employed' at the other.
The more of the questions you answer 'yes' to, the more likely it is that you are self-employed. If you answer 'no' to most of the questions then you are likely to be an employee.
If you answer yes to some of the questions like: 'you can decide when you will work' and 'can turn down work when offered', 'your employer offers work only as it becomes available' and 'you are not in business on your own account', you are likely to be considered a 'worker' rather than 'employee'.
Remember that this is for guidance only and a definitive answer can only be given by an Industrial Tribunal or court. You should get advice from an expert if you are unsure. The four main categories are:
Control: the extent to which the employer decides what tasks you do and how you do them
- do you have the final say in how the business is run?
- can you choose whether to do the work yourself, or send someone else?
- can you choose when and how you will work?
Integration: the extent to which you are part of the organisation
- if you need assistance, are you responsible for hiring other people and setting their terms of employment?
- are you excluded from internal company matters such as corporate training and staff meetings?
- are you exempt from having action taken against you using the company disciplinary procedure?
- are you excluded from company benefits and pension schemes?
Mutuality of obligation: the extent to which your employer is required to offer you work and whether you're expected to do it
- when it is available?
- can you decide when you will work and can you turn down work when offered?
Economic reality: the extent to which you bear the financial risk.
- are you responsible for meeting the losses as well as taking the profits?
- are you responsible for correcting unsatisfactory work at your own expense?
- do you have to submit an invoice to the company for your pay?
- do you get a fixed payment for a job (including materials and labour)?
- do you provide the main items of equipment needed to do the job?
- do you work for a range of different employers?
- Industrial Tribunals - find out more (Industrial Tribunals and the Fair Employment Tribunal website)
What can you do if you have a problem?
If you have a disagreement with your employer about your status and associated rights, for example, your employer is refusing you holiday pay because they say you are self-employed, try to resolve the matter with them directly. If you have a workplace representative like a trade union official, they may be able to help.
Where can you get help?
The Labour Relations Agency (LRA) offers free, confidential and impartial advice on all employment rights issues for residents of Northern Ireland. You can contact the LRA on 028 9032 1442 from 9.00 am to 5.00 pm Monday to Friday.
Your local Citizens Advice Bureau (CAB) can provide free and impartial advice. You can find your local CAB office in the phone book or online.
If you are a member of a trade union, you can get help, advice and support from them.