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Self-employed vs employed – a case study

Samira Cakali Samira Cakali
3 min read

A report published earlier this week from the IPPR thinktank has called Britain the “self-employment capital of western Europe” following figures which shows that the growth of self-employment in the UK has been the fastest of all western European counties over the past year.

In the past 13 years, the number of self-employed people has grown by more than 1.5million to 4.5million which accounts for 15% of the labour force.

What does this mean for the average Jane?

Jane is a skilled machinist and sees an advert in the window of a female garment factory. She goes insides and enquires about the role. Following an interview conducted over a nice glass of merlot, the owner – Clara states that she has two different types of roles available; one is employed and the other is self-employed; Jane can choose which she would like to take.

Both of these have their advantages and their disadvantages which depend on the individual’s circumstances. Unsure of what to do, Jane pops down to the local café to decide what to do. While sat in the café some women come in for what seems like a usual round of cake. From listening to their conversations Jane discovers that they are a mixture of employee’s and self-employed people so she decides to ask for their help. They have a brief chat and explain that they must dash – their boss will have their guts for garters if they don’t get back to work soon. Following their conversation Jane makes the following chart:

 

Employee

Self-employed

Work

The employer is under an obligation to provide work

The business has no obligation to provide work

Pay

The employee receives payment following deductions for tax and national insurance

The self-employed person submits an invoice for works carried out and receives payment in accordance with the contract. They have to complete a tax assessment form.

Benefits

The employee is entitled to receive holiday, sick, maternity/paternity/adoption pay

The self-employed person does not have these rights

Flexibility

The employee is told what to do, where to do it and how to do it etc

The self-employed person can choose what work they do and how they do it

Independence

The employee can only (usually) work for the one employer

The self-employed person can work for anyone they like

The right not to be unfairly dismissed

The employee has the right not to be unfairly dismissed (subject to qualifying criteria)

The self-employed person does not have this right

The right not to be discriminated against

The employee has the right not to be discriminated against due to a protected characteristic

The self-employed person has the right not to be discriminated against due to a protected characteristic

Jane thinks about it and decides she would rather take the flexibility of the self-employed role as she is also enquiring about a taxi driver role just down the street. Her husband was employed for over 20 years at the local supermarket – Prescos and they dismissed him for capability so she doesn’t think that rights are that strong anyway.

If you have any questions on different employment statuses please callthe employment law team a call on 0113 320 5000.

 

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