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Nope, it isn’t a poll.
It’s not even really a cryptic question as such, just a simple one that leads down all sorts of interesting paths.
Let’s do the hard one first…
I hear tell that, if you work over a certain percentage for one company (especially as a sole trader) that you are considered to be “employed” and, as such, you have the right to benefits such as group pensions, holiday pay and so on. It isn’t 100{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d} of your work.
This was put in place so that the building trade in particular, but others as well, that take the Mickey with have so-called “sub-contractors” was no more than a way to evade responsibility and cost as well as employers liabilities in respect to redundancy etc. The IT industry is rife with it as are others, including this one.
There are quite a few people who’s work will exceed (I think it’s) about 80{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d} for any one “client”. This is effectively you being employed, not sub-contracted in the eyes of employment legislation I am informed.
I am researching this and I will find the answers but, I expect, it will give a few people pause for thought. Some work providers and a few manufacturers may have to review in light of this.
But then, they may already know and just flaunt the law anyway as it’s a cheap solution with no responsibility.
I’m sure I don’t have to name names, you’ll all work it out.
There is a second part to this however from a matter that I was recently asked to respond to.
Let’s do the old hypothetical thing and present the tired old “hypothetical” situation that a friend could be in…
Calls are requested and passed by one company.
Invoices are, without agreement, requested to be sent to a third party with which no agreement is in place.
Who is responsible for paying for the call if it all goes pear shaped?
Answer to this conundrum, are you ready for it…
In actual fact and, I have personal experience of this, is that the “person” that requests and authorises the work in the first instance but, ultimately, it lies with the party that requested the work be done, the end user in this case that reported the fault and requested the service visit. This is also the party through which access is arranged, fault established and remedial work agreed with.
So, third party, meaningless really.
But it gets better as, under Scots Law although I’m not so sure on English Law but I imagine it would be very similar, the customer allows access to have any remedial work carried out and therefore they are ultimately responsible for ensuring that there is a satisfactory method of payment for that work to be done.
A warranty, extended warranty or whatever from a landlord or whoever is merely an alternative form of payment and NOT a replacement for the work to be done unless a contract exists between the parties. The customer has accepted that you will repair/adjust etc. on the basis that the bill is being footed by a third party, if they don’t pay then they accept that you require payment for you services, at least this is what I have been advised legally and it sent one major UK retailer into a flat spin. One tried to take out an injunction to stop me charging their customers for works that they refused to pay for, let’s just say that the legal system didn’t side with them.
This is why that manufacturers will often tell us that, if we can’t get payment for a “user fault”, “installation fault” or any other issue that the warranty does not cover is between the “sub-contracted” repairer and the end user. In other words, it’s our problem to pursue payment from the end user as the call (work carried out) is not covered under the terms of the warranty.
It is little known that this is a two-edged sword or, you can’t have your cake and eat it.
If the manufacturer, retailer or whomever refuses to pay for work that you have carried out in a consumers home then you are totally entitled to charge the customer at full commercial rates.
There’s at least one retailer and manufacturer I could name that does not like this at all. Not one bit. 😉
The short of it is this…
If the work is instructed by the manufacturer, insurer or whoever then you charge them.
If they fail to honour that agreement and refuse to pay for the work then you bill the customer that had the work carried out and it is then up to them to argue that your charges are met by their warranty or whatever.
Personally, when this happens and it goes to the wire or the point at which I charge full commercial rates I do not offer any discount to the commercial client at all, they pay full chargeable whack. I’ve already waited some months for payment and had the hassle of chasing their customer for payment and waited to be paid yet again. No discount whatsoever is given when things get that involved.
And, if I lose the work, so what? If it’s that much hassle it wasn’t worth doing in the first place and the client didn’t act in an honourable manner IMO so I can happily do without them and the grief they bring.
Perhaps the WTA should clarify the situation legally, although I have a feeling that after this post the position will be clarified pretty swiftly on both counts.
It’s all good fun running a business in this day and age…. honest, it is. 😕
K.
Re: Who Do You Work For?
I’m still researching this (the first bit) and came up with this interesting snippet…
Enfield Technical Services Ltd v Payne and BF Components Ltd v Grace
Facts
Mr Payne worked for Enfield Technical Services as, at his request, a self-employed sub-contractor. He worked exclusively for Enfield but received no sick or holiday pay. Following enquiries, HM Revenue & Customs (HMRC) accepted Payne’s self-employed status.
Having responded to an advertisement for self-employed commercial sales people, Mr Grace began work for BF Components. He was paid a gross daily rate for which he invoiced the company and paid his own tax and national insurance contributions. Grace received no sick or holiday pay. After 10 weeks, BF Components offered Grace an employment contract, which he declined, preferring to remain self-employed. A year later, the company told Grace that he was, in their view, an employee and that it was liable for his tax and national insurance. He was asked to sign an employment contract which he did some weeks later.
When Payne and Grace were dismissed by their respective employers, both claimed to be employees and alleged unfair dismissal.
Decision
The employment tribunals decided that both individuals were employees. However, their employers argued that they had participated in the illegal performance of their contracts by representing to HMRC that they were self-employed. If the contracts were illegal, their unfair dismissal claims could not proceed.
In Payne’s case, the tribunal decided that his contract was not illegal and that his unfair dismissal claim could proceed. In Grace’s case, the tribunal decided that his contract was illegal for at least part of the time he worked for BF Components. This broke his continuity of employment and meant that he could not pursue an unfair dismissal claim.
The Employment Appeal Tribunal (EAT) agreed that Payne and Grace were employees, but decided that both had believed themselves to be self-employed in good faith and had not misrepresented the facts of their relationships to HMRC. There had simply been a mis-characterisation of their employment status and neither Payne’s nor Grace’s contract was illegal.
The employers’ subsequent appeals were dismissed by the Court of Appeal, which decided that while a contract of employment could be unlawfully performed if there were misrepresentations as to the facts, an error of categorisation alone, without false representations, would not make a contract illegal. The fact there was a tax advantage in claiming self-employed status did not, of itself, mean that the contract was unlawfully performed. I Payne and Grace had participated in the mis-characterisation of their legal status, but had not made false representations to HMRC about the underlying facts. As such, both could proceed with their unfair dismissal claims.
Implications
There are tax advantages to an individual who is categorised as self-employed. Conversely, many valuable employment rights, including the right not to be unfairly dismissed, are only available to those who hold employment status. This decision serves as a bleak reminder to employers that simply because a worker is categorised as self-employed for tax purposes does not automatically prevent them from subsequently claiming rights as an employee.
Very interesting.
K.
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