The legal journey through self-employment
Published 17 January 2017
A landmark legal judgement may have widespread ramifications for employers and self-employed workers.
Drivers for online taxi firm Uber won the right to be classed as employees rather than self-employed, which means they are entitled to holiday pay, paid rest breaks and the minimum wage. (1)
Following the employment tribunal ruling experts who worked on the case predicted that other businesses that rely on self-employed workers may now face scrutiny of their working practices.(2)
A person is self-employed if they run their business for themselves and take responsibility for its success or failure. Self-employed workers aren’t paid through PAYE, and they don’t have the employment rights and responsibilities of employees.(3)
The Tribunal ruled that Uber drivers were employees and not self-employed and it accused the firm of "resorting in its documentation to fictions, twisted language and even brand new terminology", adding: "The notion that Uber in London is a mosaic of 30,000 small businesses linked by a common 'platform' is to our mind faintly ridiculous."
It is reported that Uber, which launched in 2009 with a flexible way of working, plans to appeal against the test case ruling.
The Office for National Statistics released figures earlier this month (Oct) which showed that the number of self-employed workers had risen by 273,000 to 4.79 million – 15 per cent of all people in work.(4)
The HMRC has published guidance to help employers to determine if an individual who works for them should be treated as self-employed or an employee. (5)
If the answer to all the following questions is “yes”, then the worker is probably self-employed:
Can they hire someone to do the work or engage helpers at their own expense?
Do they risk their own money?
Do they provide the main items of equipment they need to do their job, not just the small tools that many employees provide for themselves?
Do they agree to do a job for a fixed price regardless of how long the job may take?
Can they decide what work to do, how and when to do the work and where to provide the services?
Do they regularly work for a number of different people?
Do they have to correct unsatisfactory work in their own time and at their own expense?
Can a substitute be nominated if they are absent?
The government recently announced that it is setting up an independent review to look at modern working practices and workers’ rights. (6)
- Osborne H. Uber loses right to classify UK drivers as self-employed. The Guardian [Internet]. 2016 Oct 28 [cited 2017 Jan 17]; Available from: https://www.theguardian.com/technology/2016/oct/28/uber-uk-tribunal-self-employed-status
- Historic victory for Uber drivers as Tribunal finds they are entitled to basic workers’ rights [Internet]. [cited 2017 Jan 17]. Available from: https://www.leighday.co.uk/News/News-2016/October-2016/Historic-victory-for-Uber-drivers-as-Tribunal-find
- Employment status - GOV.UK [Internet]. [cited 2017 Jan 17]. Available from: /employment-status/selfemployed-contractor
- UK Labour Market - Office for National Statistics [Internet]. [cited 2017 Jan 17]. Available from: https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/uklabourmarket/october2016
- Employment status: employed or self-employed - GOV.UK [Internet]. [cited 2017 Jan 17]. Available from: https://www.gov.uk/government/collections/employed-or-self-employed
- RSA. Matthew Taylor to lead independent review of employment practices in the modern economy - RSA [Internet]. [cited 2017 Jan 17]. Available from: https://www.thersa.org/about-us/media/2016/matthew-taylor-to-lead-independent-review-of-employment-practices-in-the-modern-economy