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Wednesday, 3 October 2023

Understanding your employment status

Understanding your employment status is the first step to finding out what rights and protection you may have at work. Find out what 'employment status' is, why it is important and the three different types so you can better understand which applies to you.

Types of employment status

There are three main types of employment status:

  • employee
  • worker
  • self-employed

To find out more about the employment rights for each, read the 'Types of employment status' article.

Why your employment status is important

Each type of employment status has different legal rights, so it is important to know which category you fall into. Your employment status will determine your rights at work.

Employment status is different from your working pattern. So as well as an 'employee' or 'worker' your working arrangement might be described in one or more of the following terms.

  • part-time
  • fixed-term
  • contractor
  • consultant
  • casual
  • zero hours
  • seasonal
  • agency or 'temp'
  • office holder
  • volunteer

Various factors will determine your employment status. For example, just because you have a contract that describes you as an 'employee' or as 'self-employed' does not mean that it is the case.

If you are unsure about your employment status, read the other articles in this section. They outline some of the points that help determine employment status and include example situations to help you decide if they apply to you.

Employment Tribunal decisions on your employment status

Ultimately only a court or Employment Tribunal can make a final decision on your employment status. They will base their decision on a number of different factors, which are in line with legal tests developed through case law.

An Employment Tribunal will look at how an employment relationship works in practice to determine your employment status. They will look at whether:

  • you have to take on the work personally, rather than sending a substitute or sub-contracting the work
  • your work provider has a significant degree of control, or right of control, over you
  • you are paid a regular salary
  • your employer or work provider deducts tax and National Insurance (rather than you being responsible for making these payments)
  • you receive holiday pay, sick pay, maternity pay etc
  • you work at your employer's premises and use your employer's tools and/or facilities
  • you are integrated into the business (for example, if you appear in the company organisational chart, are subject to the company's disciplinary and grievance procedures)
  • you have any financial risk or reward, for example bonuses depending on how quickly or well the work is performed
  • you work exclusively for one business rather than performing work for a number of 'customers'
  • you have an employment contract or any other contractual documentation, eg a letter of appointment, which describes you as an employee (also know as a statement of mutual intention)

Normally if you are self-employed for tax purposes, you will be self-employed in relation to your employment rights. However, if you are self-employed for tax purposes it will not prevent an Employment Tribunal from finding that you are an 'employee' or a 'worker' for employment law purposes. HM Revenue & Customs (HMRC) decisions are not binding on Employment Tribunals.

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