Employed or Self-Employed? The Issue Can Present a Moving Target

The question of whether an individual is an employee or self-employed is highly fact sensitive and can, over time, present a moving target. That was certainly so in the case of a car body paintwork sprayer who, after setting up in business on his own account, eventually came to have only one customer.

The man was the sole proprietor of a business that initially had three customers. He at first performed work for a vehicle sales company on three days a week, leaving time for him to serve his other clients. However, over time, he came to work for the company five days a week and his other customers fell away.

After the company dispensed with his services, he lodged Employment Tribunal (ET) complaints of unfair dismissal and direct age discrimination. The question of whether he was the company’s employee – within the meaning of Section 230 of the Employment Rights Act 1996 and Section 83 of the Equality Act 2010 – was considered as a preliminary issue.

Ruling on the matter, the ET noted that he had no written contract with the company and paid tax on a self-employed basis. He drove a van bearing the livery of his own business and arranged his own public liability insurance. He provided most of his own tools and materials and set the cost of them off as business expenses for tax purposes. He did not wear the company’s uniform when on its premises, had no access to its intranet system and did not have paid holidays.

On the other hand, he had worked for the company on an exclusive, full-time basis for over 16 years since it became his sole customer. He had key access to his own allocated workstation in the company’s premises and had a locker on site in which he stored clothes, materials and equipment.

The company required him to attend its premises and expected him personally to perform tasks allocated to him. At no point had he sought to offer a substitute to perform his role. Although he enjoyed a degree of flexibility in his working hours and was essentially left to his own devices, his work was inspected by the company and needed to meet its standards.

Whilst accepting that there were numerous factors pointing towards a conclusion that he was not the company’s employee, the ET found that they were not decisive. On balance, it ruled that the degree of control and mutuality of obligation inherent in their relationship was sufficient to give rise to employment status. The decision opened the way for the man to advance his case to a full hearing.