Share this content

Holiday pay to Self Employed sub contractors ?

Holiday pay to Self Employed sub contractors ?

I have heard that a number of Self Employed sub contractors are demanding holiday pay from the main contractor? What is the legal position on this ? Surely you can't have your cake and eat it!


Please login or register to join the discussion.

07th Feb 2002 23:39

Legal Confusion
This situation arises because of the conflict between tax law and employment law, and the whole issue of employment and self-employment.
Recent cases have been heard by the Employment Appeals Tribunal where, for tax purposes, the worker has been accepted as self-employed and is assessable under Schedule D. Nevertheless the tribunal has, in some instances, accepted the worker as an employee for employment law purposes, with all the attendant consequences for pay, benefits, holiday pay and redundancy pay. This is the background to the current request, and the situation will never be properly resolved unless a statutory definition of employment and self employment coms into force for all purposes.

Thanks (0)
By neileg
07th Feb 2002 09:35

A scheme
There used to be a stamp based scheme for subbies in the building industry. I guess this may have fallen by the wayside.

Thanks (0)
06th Feb 2002 22:57

Working Time Regulations??
I recall something recently read that the Working Time Regulations definition of "worker" could include such sub contractors so you may like to look into.

Thanks (0)
06th Feb 2002 23:29

You have to be a worker!

You can't claim protection under working time regulations and/or benefit under National Minimum Wages if you are not a worker under "common law"!

The fact that the subcontractor pays tax under schedule D and that he decides what times to work and whether he can have a replacement should hefall sick etc all amounts to self employment and so hard luck! No holidays.

Try becoming an employee!

Thanks (0)
By Abacjm
07th Feb 2002 03:41

Sub-Contractors Holiday Pay
Subbies are s/e but insome cases in the building trades, there are certain agreed holiday times agreed withthe B&CE union - usually a fortnight in either July or August when most building trades close down and head for either Blackpopol, Benidorm or Largs (if based in Glasgow!)

Now although the subbies cannot "demand" holiday pay, if the main contractor want to be generous and pay them HP rather than have a presence on site whilst he/they are on holday, that is up to him - as long as the correct tax treatment is applied either with a certified card or CIS25 deduction.
As far as I am aware there is no legal obligation on the main contractor to pay holidays as they are s/employed. Doing so could raise queries from Inspector as to validity of who actually governs hours of work and threaten the purity of the "subbie's" claim to be a bona-fide subbie.

Thanks (0)
07th Feb 2002 09:11

There is a simple answer here and that is no!

However generous a contractor feels to his self employed staff, to pay holiday pay would give the Inland Revenue the view that the worker should be reclassified as a employee. That means employers NI, holiday pay, sick pay etc.

Holiday pay indicates a contract for service (employee) not for services (self employed).

Hope that helps

Thanks (0)