Jaluch Limited

Just this week I read about a £200K a year stripper from Stringfellows seeking to take an unfair dismissal claim against her employer. It seems her first hurdle has been to establish that her status was employed rather than self employed. If she succeeds in this, she will then be able to pursue her claim.
 
I wonder how many other strippers and other entertainers Stringfellows and all the other London clubs have on their books who are deemed by their employer to be self employed, but who in fact the courts might view (either now or in the future) as employed. The phrase 'can of worms' comes to mind!
 
But this often isn't about employers just taking advantage over poor disadvantaged individuals. Often the employee themsleves chooses to operate on a self employed basis. It can be a status 'thing 'for some to say they are self employed, for others it is more a tax 'thing' and for others their approach to work might be driven by a desire to have control over their own working hours and career giving them flexibility they might not have if they were employed.
 
That said, I can acknowledge that sometimes the arrangement is in place simply to the benefit of one of the parties!
 
But even when self employment suits both parties, what should employers be doing to protect themselves? For if I could have a tenner for every time I have seen a great working relationship turn sour over something and become a not so great relationship, I would be very rich indeed!!
 
So how to protect yourself as an employer:

1. Stop assuming that employment law is logical or fair. Its often not and the goalposts can move more often than you have time to have cups of tea in the day. You cannot afford to sit back and assume that your employment law knowledge of yesterday is still relevant today.
2. Stop thinking that common sense will prevail. Common sense, for example regarding what was discussed and agreed between the parties at the start of the arrangement, will probably not even come into the discussions if someone pursues a tribunal claim against you (and in doing that seeks to demonstrate that they have in fact been employed rather than self employed).
3. Know what your position is. You need to know who you pay regularly who isn't on an employment contract and understand what, if any, exposure you have from that. You need to know amongst your suppliers who in fact is operating effectively as a sole trader with you being their only customer. You need to know what tax and NI and other liabilities you could be accruing if any - or all - of your self employed people pursue you in a tribunal.
4. Challenge the status quo. And finally, you need to know that it can be in your interests to challenge the status quo. You might have operated this way for years, but is it sensible any more to operate this way or has the exposure to a tribunal claim grown too great?

 
I don't know what exposure Stringfellows has as a result of this claim. But I do know the legal costs to fight it will be huge and on top of any exposure to compensation, if she does establish both employed status and unfair dismissal, there could well be exposure to a tax and NI investigation if that is kicked off as a result of publicity around the tribunal claim. So not great.
 
So who do you have kicking around on a self employed basis who, in time, to come could give you untold grief??

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