Whether a site worker is self-employed or an employee is a debate that’s been bugging our industry for years. Parallels can be found in a case from a very different industry
Recently I was at RICS’ headquarters in Great George Street. It so happens that next door is a building frequented by members of the House of Lords. No, it’s not a lap dancers club, it’s the Supreme Court. So I popped in. There was a case going on that is right up our construction street.
It was trying to fathom whether the blokes in the case were self-employed or employees. It’s a debate that dominates the building world and has done year in year out. Not least because the true status of the blokes dictates how much tax and NI is payable and who has to pay it. Then there are little things like holiday pay, redundancy, the Working Time Regulations and all sorts of employment traps.
Another case recently decided that a self-employed steel erector who worked for a contractor for five months on a site in Milton Keynes was, like it or not, an employee.
My guess is that the building industry is miles ahead of others when it comes to taking on self-employed lads and lasses. And it’s not only chippies or bricklayers but surveyors, site managers and more. The distinction frequently trotted out is whether Tom is in a contract “of” or a contract “for” services. The “of” group is the employee corner and the “for” group is in the self-employed corner.
The classic description of an employee is in a case called Ready Mixed Concrete Ltd. There are three conditions to be fulfilled:
- Tom agrees that in return for some kind of remuneration he will provide his own work and skill in the performance of some service for Dick
- Tom agrees, even by implication, that in the performance of that service he will be subject to Dick’s control in sufficient degree to know who is boss (the court used the word “master”)
- That Dick’s other provisions of the contract with Tom are consistent with it being a contract “of” service; and there was a rider that if there is a freedom for the work to be done by Tom engaging someone else, doing that is inconsistent with Tom being an employee.
Nadine Quashie was a lap dancer, at the famous Stringfellows club in London’s West End. She was earning up to £1,265 a night dancing topless on stage wearing only a G-string and a little less in private. She signed up to a contract, rather like your bricklayer might, saying she was self-employed. But now she is suing Stringfellows for unfair dismissal - ignoring the written contract and claiming to be an employee.
The employment status dictates how much tax and ni is payable and who has to pay it. then there is holiday pay, redundancy and the working
The first employment judge said no, she is self-employed. She came on appeal to a second judge and won. She is an employee. Key feature to begin with of course is the contract document. It might say all sorts of firm things about being self-employed. The snag is that such an opening deal can become hardened or refined into enforceable employee contracts by regular giving and taking of work or any circumstances over a period of time. The court looks at the nature of the tasks and the tests for being an employee. You will recall that the spotlight is on this master and servant relationship. Are you a QS servant? Was Miss Quashie a servant?
Well, she was told what nights and times each week she was to work, that there were to be two stage performances per night, that she was obliged and could not refuse to perform private lap dancing in the curtained booths occupied by a Stringfellow club member or two, and that she must not take money for this but pocket instead club vouchers previously bought by the club members. She was also told that if she didn’t turn up, her earnings would be reduced by set amounts and that she was to work as directed by someone called the “House Mother”. The appeal judge said: “All of those circumstances point ineluctably towards a finding that on the night the claimant was an employee.”
Put legalistically the issue is whether there is sufficient control by the paymaster to connote a contract of employment? In Nadine Quashie’s case the answer is yes. As to whether your chippies, bricklayers, QS or site manager is a yes or a no, it makes no odds what he or she is wearing when you apply the test, nor whether each is earning £1,265 per night or is a good dancer.
Tony Bingham is a barrister and arbitrator at 3 Paper Buildings, Temple