Do you really know the people you work with? Do you?
One may think that a salesman, or an accountant, or a valetor, just to give a few examples, does the job for you purely as an independent contractor. They do their work and invoice you in the end to receive a payment for the fruit of their effort. That much you would know. Only to be told by the Employment Tribunal that they in fact were in your employment, as a number of businesses were surprised to discover. Uber for some reason comes to mind. What about a young chap you took on purely as an intern for him to get an idea of your trade and who gets a token payment as motivation? Is he an employee in disguise?
The issue of employment or worker status remains a complex legal matter. Courts and tribunals will decide it in each individual case on the facts. A number of things will be considered, such as the intention of the parties, the degree of control over the person who does the work, how mutual were the obligations of each party and other factors.
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While the businesses can only argue in each case against employment, an indemnity clause may be included into contracts to mitigate against the cost associated with finding of employment.
The following indemnity clause would be suitable specifically for a consultancy agreement but could be adapted to other contract types. Lawgistics will be able to help with modifying the suggested indemnity to your specific requirements.
- The Consultant is an independent contractor and nothing in this Agreement shall render or be deemed to render the Consultant an employee, worker or agent of the Client. This Agreement does not create any mutuality of obligation between the Consultant and the Client.
- The Consultant shall be fully responsible for and indemnify the Client against any liability, assessment or claim for any employment-related matter or any claim (including but not limited to tax and NI contributions claims) based on worker or employee status (including reasonable costs and expenses) brought by the Consultant or any delegate of the Consultant or any entitled third party arising out of or in connection with the provision of the Consultancy Services or the Consultant’s status, except where such claim is as a result of any act or omission by the Client.
- The Client may satisfy such indemnity (in whole or in part) by way of deduction from any payment due to the Consultant.