EMPLOYMENT LAW FOCUS
By Nicola Jengaenga, Employment Affairs Adviser
F
irst introduced in the public sector in 2000, IR35 (also called ‘intermediaries
legislation’) is designed to prevent people or companies avoiding
their tax liabilities or employment law obligations. In the past, individuals calling themselves ‘independent contractors’ could use their status to pay less tax than an employee who was carrying out an identical role, and public sector bodies could avoid paying Employer’s NI contributions, holiday pay, paternity pay etc by labelling as ‘contractors’ those people whose employment relationship was actually that of an ‘employee’. As of 6 April 2020, the UK
Government will move to prevent such practices in much of the private sector, as IR35 rules will also apply to private companies who satisfy any two of the following three conditions: annual turnover of more than £10.2 million 50 or more employees more than £5.1 million on their balance sheet. This legislation holds such
employers responsible for ascertaining the true employment status of any person working for them as a ‘contractor’ – making sure that the relationship really bears out as one of client-to-contractor, and not of employer-to-employee. However, determining the
employment status of a person is not straightforward, and since there are not yet any concrete legal definitions, we can only go by that which has been determined through case-law judgements (see table for details). If HMRC makes a decision on the
employment status of a ‘contractor’, it won’t matter what has been written in any contract for, or of, services between the two parties; they will look at the day-to-day observable working practices to decide what category a person actually falls into. If, upon examining this table, it seems that
48 CABLEtalk FEBRUARY/MARCH 2020
Contractor or employee?
New government rules coming into force in April will mean changes for any private company employing contractors. So how could this impact you and your business?
CASE STUDY Uber B.V. v Aslam, Court of Appeal, December 2018
Uber were appealing an earlier ruling which had found an Uber Driver (Aslam), who had a ‘self-employed’ contract with Uber, was not self-employed. Uber B. V. said Aslam was self-
employed because: Aslam could choose when to work or not work. Aslam was not under any obligation to accept work. Aslam was responsible for his own tax and NI where applicable. Aslam said he was either an employee
or a worker because: Aslam had to be vetted by Uber to drive the car used for his work, and as such, he was not permitted to send anyone else to do his work for him. Aslam could not develop his business independently by changing fares or charging structures, or by choosing his own routes of travel (both
of these were devised centrally by Uber). Uber felt able to deduct money from Aslam if there had been a complaint about overcharging. Te customers did not pay Aslam directly; they paid Uber through the Uber app. Although Aslam could refuse work, a certain number of refusals within a specific time frame meant his account would be de-activated. Te Court of Appeal disagreed with Uber B.V. and held that, although Aslam was not an employee, he was a worker, and so amongst other benefits would be entitled to: 5.6 weeks holiday national minimum/living wage 48-hour maximum working week protection from unlawful deductions from wages.
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