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captain jack

Original Poster:

149 posts

114 months

[news] 
Friday 5th October 2012 quote quote all
An acquaintance of mine has been working for a small company for about three years now. There has never been a contract of employment or anything formal from what he has said. He was essentially worked as self employed paying tax and buying stamps - no paid holidays, etc. It should also be noticed that it's been part time hours - sometimes as little as 5 a week at other, busier times, 25-30. I don't know whether he ever invoiced the company for his hours or they were just paid.

He has recently decided that he should have always been regarded as an employee and as such should have been entitled to holiday pay (I think it's the lack of holiday pay that has brought this up). So, he has discussed this with the owner of the business (a friend of his) and has asked for holiday back pay and a contract to formalise things going forward.

The owner stated that he has always been of self employed status but would give it some thought. He has since come back with a contract of sorts but at a lower hourly rate and for less hours than previously verbally agreed (though this was always subject to workload). An offer has been made of back pay for holiday this year (pro-rata with the hours). However, this was deemed derisory (he'd been expecting 3 years worth of holiday pay!). When he stated he didn't feel he could sign the contract, he was then told that there would be no more work available for him - essentially sacked/no longer required.

Any opinions on where he stands with this please? Does a verbal arrangement consitute an implied contract? In all honesty, I'm pretty sure he's been happy enough with the loose arrangement until recently (his financial situation has recently worsened) and I suspect the expected 3 years 'holiday pay' was would have done the trick though I did say that it was highly unlikely!

The company is essentially two owner/operators plus two hourly rated helpers (my friend being one of them).

Thanks for any advice in advance!


Laplace

830 posts

68 months

[news] 
Friday 5th October 2012 quote quote all
I'm no expert so just a passing comment from me.

It sounds like his employer made an effort to appease him by offering him holiday pay back dated for the year, an offer which sounds generous considering there was no formal contract between him and the employer. If it was such an issue why did he wait 3 years to bring it up.

Foot well and truely shot.

rog007

3,454 posts

110 months

[news] 
Friday 5th October 2012 quote quote all
From similar cases I have seen in the past; he is either employed or not. He then must decide if he wants to change that status from now. Looking back is always a challenge for both the individual and the employer; usually stressful and expensive! If they cannot agree terms from this point on, specialist legal advice for both parties would be highly recommended.

captain jack

Original Poster:

149 posts

114 months

[news] 
Friday 5th October 2012 quote quote all
Thanks for the swift replies!

When he originally told me about this I did say 'why query the lack of holiday pay and status now?' - it's the first time it's been mentioned.

With his dismissal they have now fallen out so he is talking about employment tribunal as he (especially) now feels wronged.

Do you think his lack of invoicing his hours will corraborate the employers stance that he was self employed? I agree that the subsequent offer of this years holiday will look like an admission that the employer may well regret!

GoneAnon

1,153 posts

38 months

[news] 
Friday 5th October 2012 quote quote all
If he has been self-employed I don't think he should be surprised at the offer of lower hours and lower rate.

Changing his status to become an employee suddenly involves the employer in additional costs such as NIC, insurance and - going forward - pension contributions. The employer didn't want to commit to paying someone for hours when he would have no work so has limited the hours and can always offer overtime when required.

Having said that, what was the employer putting through his books for the last 3 years to justify the payments if he was self-employed and not submitting invoices.

Edited by GoneAnon on Friday 5th October 18:10

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Eric Mc

76,759 posts

151 months

[news] 
Friday 5th October 2012 quote quote all
Indeed, he sounds like he truly was an employee and should have been handled as such by the employer from day one.

Just because a person doesn't work regular hours does not mean he should not be treated as an employee.

northandy

3,207 posts

107 months

[news] 
Friday 5th October 2012 quote quote all
Is this an ir35 issue for the employer too?

paulrockliffe

3,910 posts

113 months

[news] 
Friday 5th October 2012 quote quote all
He was an employee, he's just been unfairly dismissed. Even without a contract on writing it would be relatively easy to prove both.

captain jack

Original Poster:

149 posts

114 months

[news] 
Saturday 6th October 2012 quote quote all
Thanks guys, you've all confirmed my suspicions and will let him know that he certainly has a case that he should be arguing!

Breadvan72

19,239 posts

49 months

[news] 
Saturday 6th October 2012 quote quote all
The description that the parties apply to a relationship is not determinative of its status. Only if the bloke was really in business on his own account was he truly self employed. Was this his only job?

If the bloke is short of cash, he can ask his local CAB to refer his case to the Free Representation Unit (FRU), a legal charity run by law students and young lawyers, who conduct employment tribunal cases pro bono.

http://www.thefru.org.uk/

Edited by Breadvan72 on Saturday 6th October 09:10

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