Self-Employed

Published 23 September 10

self employed

Self-employed labour

There are several perceived advantages for employers of utilising self-employed labour, including:

  • Greater flexibility in planning labour requirements.
  • Reduced responsibility or fewer obligations towards individuals working for them.
  • Reduced administration.
  • Less expense in having to pay, for example, holiday pay or sick pay.

However, there are important legal points which may affect the legal definition of self-employed status which may have a bearing on an employer's responsibility for issues such as tax and National Insurance payments, and also the conditions and rights of workers, for example, to receive holiday entitlement. Someone classified as self-employed for income tax or National Insurance purposes may still have some claim to be regarded as employed for employment rights purposes. In these instances, the self-employed may be classed as workers.

Directgov has a useful definition of the differences between workers, employees and the self-employed.

Individuals are likely to be classed as genuinely self-employed if they:

  • Have the final say in how their business is run.
  • Risk their own money in the business.
  • Are responsible for the losses as well as profits of their business.
  • Provide the main items of equipment they need for the job.
  • Work for more than one 'client'.
  • Are free to hire other people on their own terms to do the work they take on.
  • Are responsible for correcting unsatisfactory work in their own time and at their own expense.

Thus, in the agricultural sector, where many general farm workers, stockmen, herdsmen or other workers may be employed on a self-employed basis, these workers may still hold some of the same rights as employees, due to their being employed as if under the terms of a contract of employment, even where no actual written contract exists.

For help in defining whether your workers are employed or self-employed, see Business Link

Legal definitions of self-employment

Rights of self-employed workers

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