Be sure on employment status before you begin, given Long V Brain in Hand

With confusion around employment status on the rise, an employment tribunal verdict given late last month has highlighted the importance of knowing where you stand as a freelancer when it comes to your own status and potentially, your rights, writes Seb Maley, CEO of Qdos.

Sole trader, Gemma Long, took her client, a technology company -- Brain in Hand Ltd -- to tribunal on the grounds of disability discrimination.

Mrs Long was engaged by this business as a self-employed ‘specialist’, to assist the users of Brain in Hand’s apps, which provides support to people with autism, mental health difficulties and neurological conditions.

False self-employment

Not only did the judge agree with Mrs Long’s argument that Brain in Hand had stopped offering her work after the claimant requested a support worker to assist with tasks she found difficult due to her ADHD.

But after scrutinising the contract and working practices, it was also decided that Mrs Long should have been working as an employee, meaning Brain in Hand had facilitated what’s fast-becoming known as ‘false self-employment.’

As a result, the claimant, Mrs Long, was awarded unlawful deductions from wages and holiday pay which she should have been entitled to as an employee.

This ruling is taxing on Brain in Hand Ltd

To make matters worse for Brain in Hand, the business now also faces the prospect of a significant tax bill, made up of missing employment taxes that would have been paid to HMRC if Mrs Long was engaged as an employee.

I’ll now detail the factors that led judge Ayre to decide that Mrs Long should have been working as an employee.

I will do this, exclusively for readers of FreelanceUK, to highlight the importance of understanding your own employment status and whether you should be classed as self-employed, a worker, or even an employee.

Control

Brain in Hand clearly controlled the engagement, similar to the way an employer controls its employees. From working under a line manager, to having set KPIs and monthly reviews, Mrs Long had little freedom to deliver the service in the way that she saw fit – as should be the case for self-employed workers.

Mutuality of Obligation (MoO)

Mrs Long was obliged to work for Brain in Hand, which could terminate the contract if she was unavailable for more than two weeks in an eight-week period. This mutual obligation (for Brain in Hand to provide work and for Mrs Long to accept it), painted a picture of employment, not self-employment.

Personal Service

Given Mrs Long had to perform the work herself, couldn’t delegate or arrange a substitute to cover for her, judge Ayre had “no hesitation whatsoever” in finding that Mrs Long provided a ‘Personal Service,’ which is another hallmark of an employment relationship.

What's the key take-away for freelancers of Long V Brain in Hand?

With these decisive findings relating to Control, Mutuality and Personal Service, it meant there was little evidence to suggest that Mrs Long should have been working self-employed.

And so, above all else for self-employed people, this case of Long V Brain in Hand Ltd highlights the importance of having a clear understanding of your employment status before starting work with a client.

Final thought

I should also make clear that employment status isn’t fixed. So if you suspect your contract reflects employment, or even worker status, which is becoming increasingly common in the gig economy -- there’s nothing stopping you from launching a bid to have this changed in order to receive the employment rights that you may want, and need.