Case Study:
Who pays for the holiday?

Are self-employed staff entitled to claim for holiday pay under the Working Time Regulations?

Jenny, a salesperson, joined Sandra's company two years ago. At that time, on the advice of her financial adviser, Jenny requested that she be taken on as self-employed, to which Sandra agreed. Jenny has now handed in her notice. She has told you today that her solicitor advised her that under the Working Time Regulations, she is entitled to paid holidays (which she has not been given). Jenny is now demanding that Sandra pay her two years' worth of holidays. Must she?

Answer:

The fact that Jenny and Sandra have agreed that Jenny will be treated as self-employed does not necessarily determine the issue. Indeed, the fact that the Inland Revenue treats Jenny as self-employed does not mean that a tribunal or court has to follow suit. A tribunal will look at a variety of matters in determining employment status, including whether Jenny must render personal service or if she can send a substitute. They will also look at the degree of control that Sandra has over Jenny's work, both what she does and when she does it. Is Sandra obliged to provide work for Jenny and can Jenny turn down any work that is offered?

Note that under the Working Time Regulations, rights are extended to "workers", a much wider category than "employees". Whilst the definition of "a worker" excludes the genuinely self-employed, it captures a number of individuals who occupy the twilight zone between employment and self-employment, including agency workers and casuals...