The ECJ has ruled that ‘commission only’ sash window salesman, Conley King was a ‘worker’ and not genuinely ‘self-employed’ and is therefore entitled to 12 years’ back holiday pay. This could mean that organisations who have engaged people on a similar basis may have substantial contingent liabilities in respect of these ‘workers’. In Mr King’s case this amounted to £27,000.00. Although the case has been referred back to the UK Court of Appeal for further consideration it emphasises the need for organisations to ensure that two key elements are enshrined within the Contracts for Service issued to such individuals; the right of ‘substitution’ (i.e. the genuine right of the contractor to substitute an alternative individual to perform the work) and the freedom from management control (i.e. the right to decide when and in what manner the work is performed). It is important that any ‘unfettered’ right of substitution can be demonstrated to be genuine and one that is actually practiced by those engaged by the organisation under such contracts. Other factors are naturally important, such as ‘economic risk’ and the other tests that given under IR35 and the now deprecated IR56.
Exactly how the distinction between dependent contractors and the genuinely self-employed will be defined in law will depend on the outcome of any legislation that arises from the Taylor Report of July 2017.