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In Byrne Brothers (Formwork) Ltd v Baird [2002] ICR 667, construction workers operating under subcontractor arrangements were found capable of falling within the statutory worker category.

The EAT explained that worker protection is aimed at people who are not genuinely carrying on businesses dealing with the other party as a customer.

Key finding

The worker category sits between employee status and genuine independent business status.

Lesson

A construction subcontractor may be self-employed for some purposes but still qualify for rights such as holiday pay where they personally provide labour as part of another business.

In Carmichael v National Power plc [1999] ICR 1226, the issue concerned casual guides who worked when required.

The House of Lords considered not only the written documents but also the way the arrangement operated in practice.

Key finding

Where the written document does not contain the complete agreement, the Tribunal may examine spoken discussions and the parties’ conduct.

Lesson

Your legal status may be proved through:

In Uber BV v Aslam [2021] UKSC 5, the Supreme Court held that employment status is determined by the statutory protection and the reality of the relationship, not simply by contractual wording drafted by the business.

Uber drivers were found to be workers during periods when they were logged into the app, within their authorised area and ready and willing to accept trips.

Key finding

A business cannot determine statutory status merely by writing contractual terms that describe individuals as independent contractors.

Lesson

The Tribunal will examine who controls the work, sets the terms and bears the real bargaining power.

In Cotswold Developments Construction Ltd v Williams [2006] IRLR 181, the Employment Appeal Tribunal considered the distinction between:

• someone actively marketing services to customers as an independent business; and

• someone recruited to work as an integral part of another organisation.

Key finding

A person is more likely to be genuinely self-employed where they operate an identifiable business, seek customers generally and deal with the contractor at arm’s length.

A person recruited mainly to provide labour within the contractor’s operation may instead qualify as a worker.

In Varnish v British Cycling Federation [2021] ICR 44, the Employment Appeal Tribunal considered whether a professional cyclist was an employee or worker.

The EAT confirmed that the dominant purpose or dominant feature of an agreement may be relevant. However, it is not a separate test that replaces the statutory wording.

The Tribunal must still consider personal service and whether the other party was genuinely a client or customer of the individual’s business.

Key finding

The dominant-purpose approach is a useful tool, but it is not decisive on its own.

Lesson

In Pimlico Plumbers Ltd v Smith [2018] UKSC 29, Mr Smith was described as self-employed and had a limited ability to exchange work with another Pimlico operative.

The Supreme Court upheld the finding that he was still required to provide personal service. He could not send any suitable person of his own choosing; any replacement had to come from Pimlico’s existing workforce.

Key finding

A restricted right to pass work to another approved worker did not remove the obligation of personal performance.

Lesson

There is a significant difference between:

In James v Redcats (Brands) Ltd [2007] ICR 1006, the Employment Appeal Tribunal considered the dominant purpose or feature of the agreement.

The question was whether the arrangement was mainly intended to obtain the individual’s personal work or whether personal service was only incidental to a separate commercial agreement.

The claimant distributed newspapers, and the Tribunal concluded that the dominant purpose was the delivery of the newspapers rather than requiring her personally to perform every delivery.

Key finding

Personal service must be an important feature of the agreement. It is not enough that the individual happens to do most of the work personally.

Lesson

In Nowotnik v Cedar Construction Services Ltd, case 2601835/2024, the subcontractor was CIS registered and treated as self-employed.

The Tribunal nevertheless found that he was a worker under section 230(3)(b) of the Employment Rights Act 1996.

The alleged right to send someone else was not a genuine right of substitution. It was closer to being able to suggest another person who might help the contractor.

Key finding

CIS registration, invoices and a subcontractor label did not decide the legal status. The Tribunal examined whether the subcontractor was genuinely running an independent business and whether the company was his client or customer.

Lesson

Welcome to Ask the Group.

This topic is for subcontractors who want to ask a practical question, hear from others with similar experience or receive guidance based on my legal and casework experience.

You can ask about:

• unpaid invoices or withheld wages;

• pay less notices;

• CIS and self-employed status;