Employment Status – when are you an employee or independent contractor?

Employment status is a subject that has been in the news recently following the much publicised decision in the case of Mr Yaseen Aslam and Mr James Farrar v UBER. In the UBER case, it was held that the individuals were workers and therefore were entitled to certain benefits. The Employment Judge was less than complimentary about the practices of UBER. That being said, UBER have announced that the decision is subject of appeal with a hearing likely to be fixed in the next few months.

A further development has come in the recent case of Dhilllon and GP Dhillon Partnership v Commissioners for HMRC (case decision here) . This was a decision of the First Tier Tax Tribunal (FTTT) that sat in July 2016.

The Appellant in the case (Dhilllon and GP Dhillon Partnership) are a haulage company who engage drivers who would be paid a set amount for each shift that they would work. There was no guarantee of work and there was some flexibility about when the drivers could work. This could mean that the drivers could refuse work as well as provide substitutes on their behalf. Training was provided and the drivers would be required to satisfy certain health and safety standards. The drivers would not normally be supervised.

The FTTT held that the drivers were employees. Part of the reasoning of the Judge’s decision was based on the level of control as well as the fact that the drivers did not hold themselves out as being self-employed contractors. One important difference between this case and that of UBER is that this case was heard at the Tax Tribunal in contrast to the UBER case that was heard at the Employment Tribunal. As the Tax Tribunal focuses on tax legislation, there was no provision to find that the drivers were workers as there would be in the Employment Tribunal under the Employment Rights Act 1996.

For an analysis of the factors relating to employment status, please see the general guidance found here.