Employee, worker or self-employed?

The question whether an individual is an employee, worker or self-employed is complicated, but it is best to start with the statutory definition used to determine access to most statutory rights, found in Section 230, Employment Rights Act 1996 (ERA 1996). According to this definition, an employee is somebody who works under a contract of employment (whether or not it is written down). A worker is any other individual who works under a contract to perform work personally for another party to the contract, as long as that other party is not a “client or customer of any profession or business undertaking carried on by the individual”.

In other words, the key to whether someone is an employee is whether they have a contract of employment (whether or not it is in writing). If there is no contract of employment but there is a legal obligation to perform work personally, the person will be a worker. The only exception is where they are in business on their own account contracting with their own client or customer, in a genuine arms-length relationship of self-employment.

All apprentices with an Apprenticeship Agreement are employees (see page 44).

Through case law, judges have developed these key tests to help establish whether someone is an employee, a worker, genuinely self-employed, or a volunteer:

• is there “mutuality of obligation”?

• is there a contract to work personally?

• to what extent is there a right to control how and when work is done?

• are the other contract terms (written and oral) consistent with an employment relationship?