She can’t possibly be an Employee!

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I can’t tell you how many times I’ve heard a client say this!

The client believes that as she has invoiced them on a regular basis then she must be self-employed and could never be deemed to be an employee.

Whilst I don’t want to go into the details here of the differences between an employee, worker or self-employed contractor, please be aware that in the mind of the individual, particularly if there is a falling out between you and them, and possibly in the mind of HMRC, it might not be so black and white. Take expert advice – probably the best place to start would be your accountant.

Look what happened to Exmoor Ales.

Joan Herriot was an accountant and had a long working relationship of 27 years with Exmoor Ales until they fell out during 2017. Although she had been self-employed and invoiced the Company in the name of her partnership with her husband, after the fall out, she brought claims for unfair dismissal, age discrimination, holiday pay, failure to provide a statement of written particulars of employment, harassment and victimisation.

In 2011, Exmoor Ales paid her a quarterly payment of £1,000 in return from her working exclusively for the brewery without any right to provide someone else as a substitute if she was unavailable. The Employment Tribunal agreed with her that she was an independent contractor up to 2011 when she became an employee.

The brewery raised an appeal against this decision maintaining that the tribunal had not considered all the relevant facts such as her tax arrangements, she was not a member of the employee share scheme and she had drafted employment contracts for other staff but not herself.

The Employment Appeal Tribunal rejected the appeal stating the tribunal had been aware of the other facts but these had been overridden by other factors which included the mutuality of obligation, control and substitution which were in her favour.

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