In many sectors there has always been a clear distinction between permanent íworkersí who are on the payroll and ísubbiesí, self-employed jobbing or hourly paid subcontractors trading on their own account.
Not any more.
The Court of Appeal has demolished the distinction at a stroke deciding that a freelance bricklayer, a certain Mr Wright, was entitled to paid holiday leave because under the Working Time Regulations 1998, Regulation 14, he was a íworkerí within the meaning of the law.
The key issue under these regulations is not the way they are paid but whether or not they undertake the work ípersonallyí. The word íworkerí has a much wider legal definition than íemployeeí.
The ramification will be enormously widespread, comments employment law expert Nichola Upperton-Evans from law firm Rowe Cohen, If thousands of workers on íthe lumpí have to be given holiday pay it could cost certain businesses millions. Backdated claims could even put some out of business.
Jobbing workers have always been responsible for their own tax, NI, VAT, insurance, pensions and holidays. The Appeal Court now says that they are workers with the same entitlements as permanent staff because they do the work ípersonallyí.
Upperton-Evans is warning employers to prepare themselves for an avalanche of disputes and claims. Employers should look carefully at the contracts that they have entered into and consider taking legal advice on the issue.
Self-employed? No such thing.
In many sectors there has always been a clear distinction between permanent íworkersí who are on the payroll and ísubbiesí, self-employed jobbing or hourly paid subcontractors trading on their own account. Not any more.