Employee, worker or self-employed?



The statutory test used to determine access to most statutory rights defines an “employee” as somebody who works under a contract of employment (whether or not it is written down), and a “worker” as anyone else 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. 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 freely contract to provide goods or services directly to their own customers or clients in a genuinely “arms-length” relationship, in which case they will be “self-employed”.



All apprentices with an Apprenticeship Agreement are employees (see pages 49 and 393).




Courts and tribunals have applied various different tests to decide whether someone is an employee, a worker, genuinely self-employed, or a volunteer (see page 48). These include: 




• mutuality of obligation — an obligation to do some work in return for payment (usually wages);




• an obligation to work personally, that is, no right to send someone else to do your work instead of you; 




• control — the extent to which someone else decides when and how you do your work; and


• the extent to which you are subordinate to (and integrated into) the organisation to which you provide your services (as opposed to marketing your services to the world at large). This test derives from European Union law. 


When deciding questions of employment status, an employment tribunal must always examine all the facts, including the employer’s superior bargaining power and its ability to control the content of the contract documentation (Autoclenz v Belcher [2011] UKSC 41). However, the tribunal’s job is to work out what the parties must have intended to agree. It is not to remake the agreement, however unfair or unequal its terms.