Employer or Employee Essay

1982 WordsSep 18, 20158 Pages
It is of vital importance to appreciate the distinction between the legal status of employees and the self-employed. A person may be engaged to perform work for another person or organisation as an employee, who works under a contract of employment or a “contract of service”. Alternatively, the person may be engaged as an independent contractor or self-employed person working under a “contract for service”. The distinction between a “contract of service” and a “contract for service” is important because: -Employees working under a contract of service enjoy more common law employment rights, such as the general duty of care that the employers owe to the employees; -Employees enjoy more statutory protections, such as dismissal, redundancy, maternity etc.; -Employers owe employees a higher duty under health and safety law than is the case with independent contractors; -Employers are under certain circumstances vicariously liable for the torts of their employees committed in the course of their employment; -Liability for tax and Notional Insurance contributions is different for employees and contractors, and thus their entitlements to some social security benefits vary; -If the employers become insolvent/bankrupt, employees are preferential creditors and can recover money owed from the liquidator as well as applying for redundancy payments; whereas contractors will lose money they are owed; -Employers are legally required to insure themselves against liability towards their employees. But it is not compulsory for them to do so in respect of independent contractors. This essay is going to look into the statutory definition of employee and examine the various common law tests developed by courts to determine whether or not someone is an employee and hence entitled to the full range of employment protection rights. Statutory Definitions of Employee and Contract
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