Employers must remember self-employed workers can be a confusing area when it comes to employment law
All employers need to check that they are keeping robust records for all individuals who are providing services for them that accurately reflect the nature of the work they are doing and are fully up to date.
Where employers are using self-employed individuals, it is possible that the nature of these relationships evolves over time into something more akin to direct employment. For example, the employer may choose to give work to a particular individual repeatedly, because they are more reliable, and this could alter their employment status.
When weighing up the true nature of an employer and employee relationship, a Tribunal would consider the ‘mutuality of obligation’ that exists between them. For example, is there an obligation on the employer to provide work and an obligation on the employee to accept it? Employers need to be open and honest about the relationship they want to establish with each individual worker and make sure the correct agreement is struck at the start and maintained appropriately.
While this issue can affect businesses of all sizes, smaller businesses are among those more likely to overlook the fact that their relationship with individual employees could shift over time, largely due to a lack of resources. They need to be aware that there could be serious consequences for getting this wrong. For example, it could cause significant damage to an employer’s brand if it is subsequently found that they are not fulfilling their pay and tax obligations.