Whether your staff are employed or self-employed will make a big difference to their legal rights.
By Martin Donoghue of thePublican.com's team of legal experts from London solicitors Joelson Wilson.
I have a friend who owns a bar. It is small but busy, and staffed by a previously close-knit and friendly team. The team included a part-time manager and a woman who helped with the books who almost always worked from home. Both the manager and book-keeper were self-employed - or so everyone thought.
This arrangement suited all concerned - my friend because he had heard that self-employed people have far fewer protections than employees, and the manager and book-keeper because of their tax treatment. No doubt at this stage they had neither been investigated by the Inland Revenue nor had they realised that employees have more rights than the self-employed.
The bar ran as smoothly as could be expected, although obviously there was the odd problem. But recently my friend had to dismiss the manager, who was violent to a customer, and the book-keeper, who was no longer up to scratch.
My friend called me when he received some tribunal papers. Apparently both were claiming compensation of over £50,000 - he was surprised, to put it mildly, and had read that only an employee could do this. The manager was part-time, and the book-keeper worked from home - as far as he was concerned this meant both were self-employed and they could not go to a tribunal.
I had to explain that it was not that simple, and although sometimes obvious, it can be hard to judge if a person is genuinely self-employed and not an employee.
Essentially a self-employed person is in business on his/her own account, and there are factors used to decide this. Unfortunately neither the manager nor book-keeper appeared to be anything other than employees. Better news for them than for my friend!
He promised that before he took anyone on again, he would get expert advice. He even said that he'd do the same if he did work for anyone else. After all, if he had valuable rights, he did not want to miss out on them.