NUPIT definitions

The difference between being employed and self-employed
Agency workers

‘Worker’ is a hybrid category, somewhere between ‘employee’ and ‘self-employed’. A worker is an individual who works for an employer, not under a contract of employment, but under ‘a contract for services (like those who are self-employed)’. The key distinction between ‘worker’ and ‘self-employed’ is whether the worker has to provide his or her services personally (in which case they will usually be a ‘worker’, or whether they are entitled to substitute someone else to do their work for them (in which case they will usually be ‘self-employed’). Workers qualify for some, but not all, statutory employment rights.

Self-employed people, on the other hand, are not entitled to most statutory employment rights. The only rights they enjoy are the benefits under their contract and, in some limited circumstances, the right not to have unauthorised deductions made from their pay and not to be discriminated against on grounds of sex, race, nationality, disability, religion or belief, or sexual orientation. A self-employed person provides the employer with his or her services but remains independent (i.e. they are genuinely in business on their own account). The agreement between the two parties in this situation is a ‘contract for services’. It is always worth querying whether an individual is in fact self-employed. For example, even if the contract allows for a substitute to do the work but in reality it is the employer who decides who the substitute can be, the individual may in fact be a ‘worker’ and will therefore qualify for some employment rights.

The issue of an individual’s employment status can be complex. You should never assume that a member does not have employment rights due to their employment status, and should always contact your full-time officer for advice.

.The diffeence between being employed and self-employed
Whether someone is an employee or self-employed may, ultimately, be a matter for the courts to decide. In such circumstances, courts and tribunals apply a series of tests in order to decide whether an individual is employed or self-employed. 

These are summarised in the following table:

Self employed
Degree of control
The worker is told what to do, how and when to do it.
The worker is taken on to do a particular job and decides how it should be done.
The worker forms part of the organisation.
The worker is in business on his or her own account – he or she can work for other people and employ others.
The organisation is obliged to provide work, and the worker is obliged to do it.
There is no obligation on either side.
The worker receives pay or salary with PAYE deductions, a payslip, etc.
The worker issues an invoice when job is finished and receives a fee with no deductions. The worker also has the ability to make a profit or loss.
Benefits The worker has rights to paid holidays and sick leave.
The organisation has no involvement when worker is unavailable for work.
Ownership of equipment The organisation has no involvement when worker is unavailable for work. The worker’s own premises, tools and materials.

.Agency workers
These are arguably a further category. They may be classed as self-employed or employees of the agency who provides them with work depending on their circumstances and changing case law.       

A worker supplied through an agency will not normally be considered an employee of the organisation in which he or she is working, even though the organisation effectively controls what the worker does. In the majority of circumstances, they will be considered as an employee of the agency and are therefore able to claim employment rights from the agency.

The European Commission is currently considering introducing legislation to give agency workers the right to be no less favourably treated than other employees at the organisation in which he or she is working. However, it will be some time before this right comes into force in the UK.      

Legal provisions that apply specifically to agency workers are: 
  • No fees – an employment agency cannot charge you a fee simply for finding you work or putting you on their books;
  • Getting your wages – an agency cannot withhold your pay simply because they haven’t received their payment from the company or organisation where you worked; 
  • A written statement of terms and conditions – when you sign on with an agency you should be given a written statement of terms and conditions before you start any work; 
  • Workers seeking employment through an agency have the right not to be discriminated against in the offered terms of employment (this includes on grounds of their sex, race, trade union activities, etc.); 
  • In cases of discrimination, it is usually possible to claim both against the agency and the principal employer (where the latter discriminated).