Employing rather than contracting

Question

We engage a contractor to open, close and daily clean our public toilet block, he also agreed to take on our street cleaning contract, litter bin emptying and twice per annum village litter pick.

A year on I am being advised the council must in fact employee him and not engage him for both or either contract as a self employed contractor, would that be so?

The council has never engaged either contractor as an employee before now for 16 years but maybe we should have?

Thank you

Answer 1

Lots of Councils at all levels employ contractors doing similar work but of course it depends on the contract you draw up

Assuming you tender the contract, it’s for a fixed term and it allows for example substitution you should be ok

But if there are doubts I’d strongly urge you to seek professional advice as if HMRC rule they are an employee it could prove costly 

Comments

It is all in the contract. Ensure that the tenderer is stated as registered at least a sole trader who is insured and they invoice the council for the work involved. Remove any confusion that may arise over direct employment.

Answer 2

Who provides the tools and materials? Does he decide how and when to perform each task? Does he have the right to bring in somebody else to do the work on his behalf? Does he invoice you for the work? Do you pay him for the hours he works, or the tasks he performs, or a flat monthly fee? Does he carry his own insurance? Is there a written agreement between the two parties regarding the terms of the contract? These are the questions that would be asked in an employment tribunal.

Comments

As ever many thanks.

The simple answer is yes to all your comments, contract in place, he provides all materials, we agree core hours but down to him, he provides stand in if sick or hols, own PL insurance, own ppe equipment, submits invoices to the council.

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In which case he's clearly a contractor, not an employee.

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Agreed.  It sounds like a stand-alone contract rather than an employed status.  There are some potential pitfalls though - does the 'contractor' do any other similar work for anyone else or is the council the sole and only customer?  HMRC guidance may help: https://www.gov.uk/employment-status/selfemployed-contractor. and there is a simple to use 'tool' to guide employment status here: https://www.gov.uk/guidance/check-employment-status-for-tax

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Agreed.  It sounds like a stand-alone contract rather than an employed status.  There are some potential pitfalls though - does the 'contractor' do any other similar work for anyone else or is the council the sole and only customer?  HMRC guidance may help: https://www.gov.uk/employment-status/selfemployed-contractor and this tool: https://www.gov.uk/guidance/check-employment-status-for-tax