Am I Self-Employed or Employed?
This is one of the modern problems in working life. A business calls you self-employed, the paperwork calls you a subcontractor, the tax system treats you as CIS, and the invoice makes it look like a normal commercial arrangement. On paper, everything may appear clear. You earn like an employee, don't run a normal business, and have no holiday, SSP, pension, and proper contract.
But real life can look very different.
You may be turning up when you are told. You may be doing the work personally. You may be following instructions from a manager, supervisor, site manager, office, or WhatsApp messages. You may be using the company’s site, schedule, materials, tools, equipment, or system. You may not be running your own independent business at all. You may simply be providing your labour inside someone else’s business.
That distinction matters.
When a business treats someone as self-employed, the business can save money and reduce legal responsibility. It may avoid holiday pay, SSP, National Minimum Wage issues, proper written terms, notice, and protection from unlawful deductions from wages.
The business gets flexibility.
The worker carries the risk.
That is where the unfairness often begins.
You are not alone if you are asking yourself: “Am I self-employed or employed?”
Many subcontractors, CIS workers, drivers, labourers, cleaners, carers, tradespeople, and agency-style workers are put into arrangements that benefit the business more than the person doing the work.
Sometimes this happens because the business does not properly understand employment status. Sometimes it happens because the paperwork is designed to protect the business and reduce your rights.
Either way, the label is not the final answer.
The law: section 230(3)(b) Employment Rights Act 1996
Under section 230(3)(b) of the Employment Rights Act 1996, a person can be a worker if they undertake to personally perform work or services for another party, unless that other party is genuinely a client or customer of a business carried on by that person.
In simple language, the question is this:
Are you genuinely running your own business, with the company as your client?
Or are you personally working for that company as part of its business?
That is the real issue.
You may have been told, “You are self-employed.”
You may have been told, “You are CIS.”
You may have been told, “You send invoices.”
You may have been told, “You signed the contract.”
But none of those points, on their own, decides whether you have employment law rights.
Do not take my word for it.
In one case where I represented the claimant, Mr M Nowotnik v Cedar Construction Services Limited, the Tribunal considered whether the claimant was genuinely self-employed or a limb (b) worker under section 230(3)(b) of the Employment Rights Act 1996.
The Employment Judge explained how contract wording can be used to try to avoid worker status:
“A common drafting tactic adopted by those who want to avoid a contract giving rise to limb (b) worker status is to include a ‘substitution clause’ — i.e. a clause that ostensibly allows the work to be done by someone who is not a party to the contract. The intention is that such a clause negates the obligation to personally perform the work or services, thereby depriving the contract of an essential component of ‘worker’ status.”
You will find it here, at paragraph 10: https://assets.publishing.service.gov.uk/media/699adfec9f2f510ba1d0ba23/Mr_M_Nowotnik_v_Cedar_Construction_Services_Limited_2601835.2024_Judgment.pdf
In simple language, the contract may be written to make it look like you can send someone else to do the work. But the real question is whether that right exists in practice.
Could you actually send someone else?
Could you do it without permission?
Would the business accept that person?
Or did the business expect you personally to turn up and do the job?
That is why the wording of the contract is not always the end of the matter.
The tribunal looks at the reality of the working relationship.
The real question
The important question is not only what the contract says.
The important question is what is really happening in the working relationship.
Are you truly running your own business?
Or are you personally working inside someone else’s business?
That is the question tribunals look at.
You may be called self-employed.
You may be registered under CIS.
You may send invoices.
You may do your own tax return.
You may be described as a subcontractor.
But none of those points, on their own, decides whether you have employment law rights.
A person can be treated as self-employed for tax purposes and still be a worker for employment law purposes.
Start with simple questions
Do you decide your own work?
Or does someone tell you where to go?
Do you decide what time to start?
Or are you expected to attend when the company tells you?
Do you choose how the job is done?
Or do you follow instructions from a manager, supervisor, site manager, office, or WhatsApp messages?
Do you price the job yourself?
Or does the business tell you the rate?
Do you buy the main materials?
Or does the business provide the materials, tools, site, schedule, drawings, or equipment?
Do you find your own customers?
Or does most of your work come from one company?
Do you carry real business risk?
Or are you simply paid for your labour?
Do you advertise your own business?
Or do customers and other workers see you as part of the company’s team?
These questions matter because the law does not stop at the label.
The law looks at the reality.
Do you get instructions?
This is one of the first questions to ask.
Do you get told where to go?
Do you get told what job to do?
Do you get told what time to arrive?
Do you get told what order to do the work in?
Do you have to follow the company’s site rules, manager, supervisor, or team leader?
If the answer is yes, ask yourself another question:
Is this really my independent business?
Or am I working under someone else’s control?
A genuinely self-employed person normally has more control over how the work is done.
A worker often provides personal labour under the direction of someone else.
Do you personally have to do the work?
This question is very important.
Could you genuinely send someone else to do the job for you?
Not just on paper.
In real life.
Could you send another person without asking permission?
Would the business accept anyone suitable?
Would you choose and pay that person yourself?
Or would the company say:
“No, we need you.”
If the company expects you personally, that may support worker status.
A substitution clause in a contract is not magic.
The question is whether the right is real.
If it only exists on paper, but the business expects you to attend personally, the clause may be weak.
Do you buy the materials?
Do you provide the main materials?
Do you pay for the materials yourself?
Do you decide what materials to use?
Or does the business provide the materials, site, tools, equipment, plans, and work schedule?
If the company provides the work, the materials, the organisation, and the instructions, you may not be running your own independent business.
You may simply be providing labour as part of their business.
That distinction matters.
A genuine business usually has its own organisation.
A worker usually fits into someone else’s organisation.
Do you set your own price?
Do you decide your own price for the job?
Do you negotiate as a business?
Do you quote for the whole project?
Can you increase your profit by managing the work efficiently?
Or are you paid a day rate, hourly rate, weekly amount, or fixed rate decided by the company?
If the company sets the rate and you are paid for your labour, that may support worker status.
Sending invoices does not automatically mean you are genuinely self-employed.
Many people send invoices only because the company tells them to.
The invoice does not answer the legal question.
The reality of the relationship does.
Do you have your own customers?
Do you advertise your own business?
Do you have your own website, customers, prices, terms, and business risk?
Do you work for different clients as your own business?
Or do you mainly work for one company?
If most of your income comes from one company, and you work under their organisation, this may point towards worker status.
The question is not whether you have been called self-employed.
The question is whether you are genuinely in business on your own account.
Do you carry real business risk?
Can you make a profit by managing the job well?
Can you suffer a real loss if the job goes wrong?
Do you have to correct mistakes at your own cost?
Do you pay workers, materials, insurance, transport, and business expenses as your own business?
Or are you simply paid for the days or hours you work?
A genuine business normally carries real commercial risk.
A worker usually provides labour and gets paid for that labour.
Are you part of their business?
Do you work on their sites?
Do you work with their team?
Do you report to their manager?
Do you use their systems, schedule, materials, or equipment?
Do customers see you as part of their business?
If you are integrated into the company’s business, this can support worker status.
A genuine independent contractor usually works at arm’s length.
A worker provides personal labour as part of someone else’s business.
CIS does not answer the question
Many construction workers are told:
“You are CIS, so you are self-employed.”
But CIS is mainly about tax.
It does not automatically decide your employment rights.
You can be CIS registered and still be a worker under employment law.
You can submit invoices and still be a worker.
You can do a tax return and still be a worker.
You can be called a subcontractor and still be a worker.
The real question is whether you were genuinely in business on your own account, or whether you personally worked as part of someone else’s business.
Why does this matter?
Because if the label is wrong, you may have rights.
You may have a right to holiday pay.
You may have a right to SSP.
You may have a right to protection from unlawful deductions from wages.
You may have a right to National Minimum Wage.
You may have a right to proper written terms.
You may have protection if money is withheld from your final pay.
You may have protection if the business tries to say:
“You are self-employed, so you get nothing.”
That is not always correct.
Think about the reality
Ask yourself honestly:
Could I decide when and how to work?
Could I refuse instructions?
Could I send someone else freely?
Could I negotiate my own price?
Could I make a real profit or suffer a real loss?
Did I have my own customers?
Did I provide my own materials and organisation?
Or was I simply turning up, following instructions, doing the work personally, and getting paid for my labour?
If you were personally working under the control of the business, using their system, their site, their schedule, their instructions, or their materials, you may not be genuinely self-employed.
You may be a worker.
And if you are a worker, you deserve your rights.
I defend subcontractors and self-employed workers
I defend subcontractors and self-employed workers who are being denied the rights they deserve.
That includes claims for:
holiday pay;
SSP;
unlawful deductions from wages;
National Minimum Wage;
failure to provide proper written contracts;
and disputes where final pay or money has been withheld.
Many people only ask for help when something goes wrong.
Pay is deducted.
Work suddenly stops.
Pay less notice is received.
A final invoice is not paid.
The company says: “You are self-employed. You have no rights.”
But that may not be the legal answer.
The legal answer depends on the reality.
Consider reading the judgment
If you are asking yourself, “Am I self-employed or employed?”, consider reading the judgment in Mr M Nowotnik v Cedar Construction Services Limited.
It shows why the label in the contract is not always enough.
It shows why CIS is not always enough.
It shows why invoices are not always enough.
It shows why a substitution clause is not always enough.
And it shows why the tribunal looks at what was really happening.
Full judgment:
If you are unsure about your status, your pay, your holiday rights, your written contract, SSP, or deductions from wages, get advice before accepting the answer that you have “no rights”.
Because being called self-employed does not always mean you are outside employment law protection.
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