Who is actually an employee.
WHY IT MATTERS
Employees attract statutory obligations that contractors do not.
WHAT OBLIGATIONS ATTACH TO EMPLOYEES
Tax deduction at source Pension contributions Statutory contributions Leave entitlements Notice and termination protections
WHAT DETERMINES CLASSIFICATION
The substance of the relationship, not the label.
WHAT FACTORS TYPICALLY MATTER
Control over how work is done Whether the person may send a substitute Integration into the organisation Who provides tools and equipment Whether the person bears financial risk Exclusivity Duration and regularity
WHAT SUGGESTS EMPLOYMENT
Fixed hours Direction over method Exclusive engagement Integration into teams and processes Payment regardless of output
WHAT SUGGESTS CONTRACTING
Control over method Several clients Own equipment Payment for outcomes Ability to substitute
WHAT TO AVOID
Labelling someone a contractor while treating them as an employee.
WHY
The authorities and courts look at substance.
WHAT THE CONSEQUENCE IS
Back taxes, contributions, penalties and employment claims.
WHAT TO DO
Assess honestly, and document the reasoning.
WHAT TO PUT IN WRITING
A contract reflecting the actual arrangement.
WHAT TO REVIEW
Long-standing contractor relationships.
