Self-Employed Workers

[thezebra]

I run a small business arranging private tuition for people. We have a lot of outstanding enquiries and not enough people here to get the work done. We don't want to employ another worker as this will not only prove expensive but I don't really think there is enought work to justify this.

We really need to get someone in for a couple of months and I thought the best way to pay them would be on a commission only basis for each client they managed to arrange tuition for. They could work from home and do as many hours as they want.

Can I take someone on like this with just a standard contract for services or am I going to get into trouble with the employment/self-employed issue?

Any pointers much appreciated.

[dp0848]

It really depends on how you set this up. What is important is the nature of the relationship between the two parties. Its a complex area but I'll try to briefly outline some of the issues that you need to consider.

Control: will you be able to tell the worker where and when to work? Will you be able to tell them how to carry out the work? Will they work to you instruction? A "yes" to these questions would indicate employment while a "no" would indicate self-employment.

MOO: Mutuality of obligation. Does the contract oblige you to provide the worker with work? Does the contract oblige the worker to accept that work? A "yes" would indicate employment while a "no" would indicate self-employment.

Financial Risk: Does he worker take any financial risk? Do they have o put right sub-standard work in their own time and a their own cost? Is it possible for the worker to make a loss on the contract? A "yes" would indicate self-employment while a "no" would indicate employment.

Substitution: Does the worker have an unfettered right of substitution? In other words can the worker send along another person to undertake the work without first consulting and seeking the permission of the "employer"? A "yes" would indicate self employment while a "no" would indicate employment.

These are just some of the issues that need to be considered when evaluating if a worker is employed or self employed. Get it wrong and the results could be expensive. This is an area that we specialise in so if you need any help please fell free to drop me a PM.

Regards.

David.

[Maslins]

You should be fairly safe. You are paying them commission only rather than an hourly rate. I presume they'll largely be free to work as they see fit, so it doesn't really sound like an employment situation to me.

[Christiane]

I think it has been said a few times that as far as the HMRC is concerned, problems mainly occur when the person has no other job. If it is their sole occupation, they tend to regard it as employment with the company, rather than the person being self employed.

Sandra Beale has a contract that might suit you. http://www.sjbealehrconsult.co.uk/employment_contracts.htm

[AdamJ]

Substitution: Does the worker have an unfettered right of substitution? In other words can the worker send along another person to undertake the work without first consulting and seeking the permission of the "employer"? A "yes" would indicate self employment while a "no" would indicate employment.


Useful post - ta.

One question - is this point make or break? E.g. , if your other headlings all point to self-employed, but the worker cannot send along another person to do the job, would that automatically make them an 'employee'.

E.g. If a job is particularly technical in nature the employer has a duty to make sure that the person doing it is competent. The contracted work therefore would be to a specific person as they have a known ability to do it, whereas is they then substituted another person that element of control is lost - the person ultimately responsible for the quality of the work has not personally selected the individual actually carrying it out.