Q&As

What are the employment law implications of recruiting an individual as an employee, rather than engaging a consultant?

read titleRead full title
Published on LexisPSL on 24/10/2018

The following Employment Q&A provides comprehensive and up to date legal information covering:

  • What are the employment law implications of recruiting an individual as an employee, rather than engaging a consultant?

What are the employment law implications of recruiting an individual as an employee, rather than engaging a consultant?

This response considers employee status from an employment law perspective, rather than from a tax or commercial perspective.

When an employer wishes to engage or employ an individual, it is important for the employer to determine at an early stage what status it considers that individual should have, whether of an employee, an employee shareholder, a worker, an agency worker, an intern, a volunteer or as a genuinely self-employed person. This is important because:

  1. the rights which attach to each of them are different, and

  2. it will also be relevant to the individual’s treatment for tax purposes

It should be remembered that, whatever status is chosen, the courts and tribunals will look to the reality of the arrangement, in preference to what the contract states, in order to determine the status of an individual.

A consultant who is genuinely self-employed will not have the status of employee or worker and, depending on the circumstances, may not be willing or available to become an employee. However, consultancy arrangements will sometimes create an employee or worker relationship unintentionally.

For further information, see: Status and worker

Popular documents