Tel: 0345 644 8955 (TPS Registered)

Employee Or Not Employee – That Is The Question

As Madrid continues its long post-world cup party, Paul the ‘psychic’ octopus has gone back to his day job of entertaining children and the enfant terrible of the BBC, Jonathan Ross, has signed a deal to present a chat show for ITV.

His last show for the BBC will be on 16th July. He announced in January that he would not be renewing his BBC contract after 13 years with the corporation. The BBC’s long love affair with Mr Ross faltered after ‘Manuelgate’, during which Mr Ross and Russell Brand left messages on Andrew Sach’s phone, incurring the wrath of many listeners. Mr Ross is one of the most infamous of the BBC’s stable of entertainers, but many actors and presenters work on self-employed contracts.

The whole issue of self-employment v employed status has come under the microscope on a number of occasions in recent years, not least because HMRC are extremely keen to gather NICs owed by the employers of employees. The three main factors which help determine whether someone is an employee or not are control, mutuality of obligation and the right to use a substitute (nothing to do with football this time).

A recent decision in which a sub-contractor was deemed to be an employee could affect the employment status and legal rights of thousands of other so-called sub-contractors working in the UK. Andrew Tilson provided services to Alstom Transport through a separate limited company invoicing on an hourly basis. He worked for Alstom as a Maintenance Technician between March 2003 and April 2004, then started working with them again in August 2004 as a Technical Engineer. Mr Tilson was promoted to a senior managerial role on a contract expected to continue up until 2017.

In November 2006, his work was terminated summarily. He complained he had been unfairly dismissed. Only employees have protection against unfair dismissal, so the question arose as to Mr Tilson’s employment status. Alstom argued that Mr Tilson was self-employed. He in turn argued that despite paying his own income tax and National Insurance contributions, the way in which his work was structured and the manner in which he worked for Alstom and the tasks he performed on the company’s behalf meant that he was really an employee.

The Employment Judge agreed that the close working proximity between Mr Tilson and Alstom was the critical factor in determining his employment status and, as an employee rather than a self-employed sub-contractor, he was entitled to claim unfair dismissal. His working relationship was so closely identified with the company that he was effectively regarded as an employee.

He held a senior managerial position as Fleet Health Manager, he was able to recruit and dismiss permanent members of staff, hire temporary contractors, buy equipment on behalf of the company and represent the company at both internal and external meetings.

His name appeared on many internal documents and he had authorised access to confidential company information. He worked exclusively on a full-time basis for Alstom and had to ask for time-off for holidays in the same way that an employee would. The over-riding criteria in deciding Mr Tilson’s employment status was the way in which he provided his services to Alstom.

This is a significant judgment as it follows the latest Court of Appeal guidelines on employee status, which were reviewed in James v Greenwich Borough Council. If you find yourself in such a situation give us a call.

Russell HR Consulting provides expert knowledge in HR solutions, employment law training and HR tools and resources to businesses across the UK.

Subscribe to our free monthly HR newsletter. Russell HR Consulting employment law newsletters are emailed automatically to our ever-growing number of subscribers every month.

Got any HR queries?

Contact us