Self-employment 


The genuinely self-employed are not workers or employees. They have very few employment rights. In particular, they are not entitled to the national minimum wage, sick pay or holiday pay, they must supply their own tools and equipment and are responsible for their own tax and national insurance contributions (NICs).


Self-employed workers are entitled only to the state pension, which they receive as long as they have paid enough years of NICs. The New State Pension is £155.65 a week for those retiring on or after 6 April 2016, but only those with a complete record (i.e. 35 years) of NICs will receive this amount. The self-employed are also left out of pension auto-enrolment (see Chapter 4), which UCATT says has created another incentive for false self-employment.


From 1 October 2015, the health and safety protection of self-employed workers was downgraded, in a change to the law described by the TUC as one of the most dangerous pieces of health and safety deregulation ever enacted (Section 1, Deregulation Act 2015). The new law says that self-employed workers whose activities pose no risk to the health and safety of others are not covered by health and safety law unless their activities are specifically listed in a schedule to the new regulations — the Health and Safety at Work Act 1974 (General Duties of Self-Employed Persons) (Prescribed Undertakings) Regulations 2015. The listed activities are agriculture, asbestos, construction, gas, genetically modified organisms and railways.


To be genuinely self-employed, you should genuinely be doing business on your own account, and providing services freely to your own clients and customers (as opposed to being integrated into another organisation and providing services to their customers on their behalf). HMRC has advice on its website as to what amounts to genuine self-employment. 


You can still be a “worker” (with worker rights, such as holiday pay) in relation to the services you provide on behalf of an organisation to its customers, while at the same time being “self-employed” in relation to other services you offer to your own customers freely on the open market (Hospital Medical Group Limited v Westwood [2012] EWCA Civ 1005).


You do not need to be economically subordinate to the other party in order to qualify for statutory employment rights as a worker. In other words, the test of whether you are a “worker” does not depend on you lacking the economic power to “look after your own interests” (Clyde & Co v Bates van Winkelhof [2014] UKSC 41).


The Gangmasters Licensing Authority (GLA), established following the Morecombe Bay cockle-picking tragedy in which 23 Chinese workers lost their lives, plays a central role in combating false self-employment. It is a criminal offence to supply workers without a licence or to use an unlicensed labour provider. Until recently, the GLA operated only in a few specific sectors: agriculture, horticulture, shellfish gathering, food and drink processing and packaging. Following union campaigning, the GLA’s remit is to be extended under the Immigration Act 2016 so that it operates across all sectors. At the same time, it is to be renamed the Gangmasters and Labour Abuse Authority. For information about the GLA, see Chapter 3 and visit the GLA website at www.gla.gov.uk.