Difference Between Employees And Self-employed Contractors

DIFFERENCE BETWEEN EMPLOYEES AND SELF-EMPLOYED CONTRACTORS
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Difference between Employees and Self-Employed Contractors
Introduction
One of the most important labor laws in Britain is employment law, which deals with the rules governing the relationships between employee and employer (Opkins, 2010). The engagement between these two parties involves the existence of a contractual relationship where one party presents an offer that should be accepted by the other party. In such a scenario, one party is the employer who is the person or the company that offers the contract, and the other party is an employee, the person who accepts the contractual terms (Opkins, 2010). For a long time now, there has been a huge challenge in determining whether an individual is an employee or an independent worker. Those individuals who do not work as employees are referred to as independent contractors. Some of the acts regulating the employment status of the employee but not independent contractor include Employment Rights Act (ERA) and the Trade Union and Labor relations Act (TULRA) enacted in 1996 and 1992 respectively (legislation.gov.uk, 2018). ERA 1996 is a crucial act that mainly deals with redundancy, protection of wages, unfair dismissal, and notice rights. TULRA, on the other hand, deals with trade unions and their relationships with their members and employers, collective bargaining, and industrial action.
How Courts Distinguish between Employee and Self-employed Contractor
In addition to the contract of service, various other tests are used by courts to determine whether a person is under employee or self-employed employment status.
Control Test
The control test is used to gauge the level of control an employer has over their employees. Control originates from the division and execution of various roles and work time (Burchell et al., 1999, 5). The test got its name from a case referred to as Lordship Bramwell v Noake, where it was argued that an employee must be submissive to the orders of their employers on how work should be done. The employer has the power to control what an employee should do as well as the manner in which a particular work should be executed. One example in this category is a contract involving a footballer and the club. Although the skilled player could be given more freedom to choose the manner in which they can perform their work, their jobs are closely monitored by their employers because they are under the direction of the club and control of captain at all times (Burchell et al., 1999, 5). Also, the methods of play, training, and discipline of a player are all controlled by their masters, and as a result, they are considered to be employees. However, in contemporary times, control test has been proven to have some weaknesses, and it is now considered less effective due to the presence of several specialists with the ability to monopolize a certain skill, therefore, eliminating the need of control by the master. Thus, the level of control by the employer to the employee has significantly reduced, and the control test is no longer considered suitable (Burchell et al., 1999, 5).
Integration Test
Integration test is also referred to as the organizational test, where an employee is regarded as a crucial entity in an organization (Burchell et al., 1999, 5). The main question this test tries to answer is; to what extent an employee has been integrated into a particular business? In cases where an individual has been deeply integrated into the company, they are considered employees or in other words, a person under a contract of service. Courts can use this test to gauge the significance of an individual in a particular business and give a ruling, depending on whether that person forms an integral part of the company or not. An individual is viewed as an integral part of an organization if the company largely depends on the function they play (Burchell et al., 1999, 5). In instances where a company cannot perform well without a contribution of a particular individual, then the court may take that person as an employee despite employer having no direct control over them.
Multiple Factor
The test is also referred to as the mixed tests, and it looks at a situation in a much wider angle than the first two tests. In this case, the judges look at different factors that will help them to determine whether a person is under the contract of service or contract for service. Various criteria are used in this type of assessment, and some include wages or remuneration, the power of choice, the rights to dismissal and suspension and the right to control. Other factors assessed include the number of working hours per day or week, the normal working hours, geographical factors that can influence the work and techniques used in the appointment and termination of contracts.
Mutuality of Obligation Test
This type of test is aimed at finding out whether the employee and employer are under agreement to perform specific obligations (Burchell et al., 1999, 7). For instance, an individual could be under obligation to carry out a certain piece of work, whereas the employer could be under obligation to constantly provide the work. The contract of employment cannot exist in instances where there are no mutual obligations. Once a mutual obligation has been established, the employee is entitled to a wage, sick leave, holiday pay and all other benefits a person under the contract of employment should receive (Burchell et al., 1999, 7). In one of the employment cases in the United Kingdom, Carmicheal v National Power Plc, workers did not sign a mutuality of obligation agreement. The workers worked as tour guides in the National Power Plc. The company made the workers to sign a statement that indicated that they were casual laborers and not permanent employees. While ruling, the judge maintained that the workers were not ...