Are my drivers employees or subcontractors?

There are a few common misconceptions about employment status – many people believe that it’s not possible for a worker to be truly self-employed if they only carry out work for one company. This is far from the truth though, particularly in the transport industry.The very fact that a subcontractor provides their own (whether owned, hired or leased) vehicle is almost good enough to be an overriding factor to prove self-employment. There would need to be very substantial pointers towards employment (like paid holidays, hourly pay and requirement to supply proof of sickness when you’re absent) for self-employment not to be provable – if that’s what the ‘employer’ and the subcontractor want of course.

But even if the subby drives the ’employers” van and looks like an employee in every possible sense, then a rock solid case for proving self-employment can be made simply by building a right of substitution into the contract. As long as the subby has the right, or better still the obligation, to provide a substitute to carry out their work if they don’t feel like doing it themselves then they can’t be considered to be an employee.

The relevant case law is Express and Echo Publications Ltd v Tanton 1999 which involved a self-employed driver engaged to drive a company’s vehicle on newspaper deliveries, on a regular run, wearing a uniform provided by them. The driver initially won his claim that he was an employee of the company but the Court of Appeal ruled that he was self-employed because of a single clause in his contract: “In the event that the contractor is unable or unwilling to perform the services personally he shall arrange at his own expense entirely for another suitable person to perform the services” and because he did actually provide a substitute driver on several occasions.

This is the essence of the ‘personal service test’. Self-employment could only be proved if the driver has a contract expressly giving him the right to supply a substitute driver whenever he wishes. Even then employment could still be proved if the company made it difficult for this to happen or habitually supplied the relief driver themselves.

So if you want to ensure that your subcontractors can’t morph into employees the safest thing to do is to draw up a contract which actually penalises the subby if he doesn’t supply a relief when he’s unavailable, even if it’s just £10 a day it would help the case.

Secondly, make sure that occasionally the subby does sometimes have time off and supplies a relief. Keep a record of the days that he supplies a relief driver.

Be careful not to be too picky about who the subby offers as a relief. You can have a ‘pool’ of relief drivers for the subbies to call upon but you must make it clear that they’re not tied to using them and that any contract for services is between the subbie and the relief driver.

I’m not a lawyer of course so I suggest anyone wanting to do this takes more appropriate legal advice.

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