Both contract workers and agency workers have specific employment rights. For this reason, it is essential to determine correctly whether an individual is:

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• an employee,

• a worker,

• an agency worker, or

• genuinely self‑employed.

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Incorrect classification can lead to significant legal and financial consequences.

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False self‑employment – a growing issue for employers

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In recent years, Employment Tribunals have increasingly dealt with cases of “false self‑employment”.

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This occurs when an individual is labelled as an independent contractor, but in reality:

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• works under the employer’s control,

• is integrated into the workforce,

• cannot send a substitute,

• must perform the work personally,

• bears no financial risk.

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In such cases, the Tribunal may decide that the individual was in fact an employee or a worker, regardless of what the contract says.

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Consequences of misclassification

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If the Tribunal finds that the individual was actually an employee or worker, they may claim:

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• backdated holiday pay (potentially several years),

• statutory sick pay,

• overtime pay,

• compensation for failure to provide written terms,

• protection from discrimination,

• protection from unfair dismissal (if eligible),

• redundancy pay (if eligible).

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The employer may also face:

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• HMRC tax and NI liabilities,

• Tribunal costs,

• compensation awards or settlements.

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Why this matters

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High‑profile cases (Uber, Deliveroo, Pimlico Plumbers) show that Tribunals will look beyond the written contract and examine the true nature of the relationship.

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Employers should therefore:

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• assess working relationships carefully,

• use appropriate contracts,

• avoid generic contractor agreements,

• review status regularly.

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How I help employers

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• assessing employment status for employees, workers, agency staff and contractors,

• drafting or updating compliant contracts,

• advising on risk management,

• representing employers in status disputes,

• supporting ACAS and Tribunal processes.

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If you are unsure about someone’s employment status, contact me — misclassification can be expensive.