Episode 9: Three pillars of self-employment

Do your working practices reflect a true self-employed working arrangement? Does your contract reflect the working practices accurately? Or are you just hoping you never got a knock at the door from HMRC?

Status can feel complex, but it often comes down to understanding the “big three.” These are the foundations self-employment - but they’re rarely explained in a way that’s easy to apply.

Our experts are cutting through the noise, breaking down the three key pillars used to assess self-employment:

❗Mutuality of Obligation
❗The Right to Substitute
❗Supervision, Direction and Control

Clear, practical, and straight to the point - making things understandable, not overwhelming.

Transcript

SPEAKER_09 0:00

The contract is the most important thing because it outlines the relationship, the commercial terms, but also the relationship from a status perspective. And Stallman Hills uses that Friday incorrectly because I want my cake and I want to meet it.

SPEAKER_06 0:13

And I'm like, you know that And actually what we're trying to do is make sure that both sides understand their responsibilities because there's massive advantages to being self-employed. It's why it's such a big part of the economy, right?

SPEAKER_09 0:25

Make sure that they understand that they're self-employed and they're taking all these additional boxes as well. Because as a as an old friend of ours and uh old mentor, there's the scales. I think it's really important that people make sure they understand that they're stepping into a self-employed position here. They will be responsible for doing things like raising their own invoices, like doing their tax return, like getting a UTR. If they understand it correctly, how can they then turn around and say, Well, I thought I was employed?

SPEAKER_06 0:50

I'll sort of call this the hidden pillar, and it's not like TM or anything, Jeremy. It's just like that's a girl.

SPEAKER_00 0:56

I like that. I never thought about that before.

SPEAKER_06 0:58

Yeah, there you go.

SPEAKER_04 1:00

I've educated a doctor today.

SPEAKER_02 1:07

Welcome, compliance experts.

SPEAKER_09 1:09

Hello.

SPEAKER_02 1:10

How are we?

SPEAKER_09 1:11

Very good, thank you very much.

SPEAKER_02 1:12

Good. Today we're here to talk about the three pillars of self-employment. And we've got Chrissy and Darrow. Introduce yourselves, please.

SPEAKER_01 1:19

Hi everyone, I'm Chrissy. I am the compliance executive here at WISE. I'm also a doctor of law. I specialise in contractual analysis, and I have worked for the New Jersey Superior Court doing criminal law as well. Uh, and I've done legal research and analysis for Thomson Reuters in my time.

SPEAKER_09 1:38

And I'm Daryl, and I'm the head of compliance, and I've been working with uh a self-employed status for the last 15 years. Uh started in the recruitment industry, moved into construction, and for the last 10 years I've been dealing with uh the logistics industry and how uh companies engage with their self-employed workforce, which is obviously a necessity.

SPEAKER_06 1:59

Lovely. Uh and obviously I'm Dan Richards, I'm the deputy chief exec at WISE. Uh I'm fairly new to compliance in general, so by saying that though, six years now, which I don't think quite counts as but uh I've learned everything that I know or don't know about compliance working at WISE. Um, but I do spend probably a when I'm talking to customers in particular, a big percentage of my time is spent talking about compliance and and sort of the do's and don'ts. And I I think it's important at this point to say what we do for our clients is offer guidance and create almost guide rails. Um, we always recommend that our clients, and whether you're a non-client, especially, get your own legal advice because every situation is separate. But what today we'll talk about is what we see, what we believe are the pillars of self-employment and how they are correctly or incorrectly applied in the environments that we currently see. And try and give everyone, as we said, some guidance around these topics. Uh, but uh don't uh stray into advice.

SPEAKER_09 3:03

Uh well it's uh it's ever evolving, exactly, isn't it? So even though I've been doing this for 15 years, this if things are constantly changing, so all the new stuff we're on the same part. It does help to uh understand what's happened in the past because they're all contributing factors, but of course, um yeah, it's an ever-evolving thing, and we're we're all constantly learning.

SPEAKER_06 3:22

Especially in the UK where obviously a lot of what's decided in courts is based on case law rights and what's happened in the past. And again, to be boring for a second, we spoke l loads recently about rock to work checks and the new legislation, and we've said a couple of times in that until it's tested in a court and we know what the outcomes are, a lot of it is sort of okay. Well, these are the rules, but actually, what are the consequences and how will it be applied? Yeah, you don't really know until it's properly tested. Exactly. So no good. Uh good to have you both on the on the team. Good to have you on podcast time. Daryl's breaking his podcast. We won't go down the podcast being plates today.

SPEAKER_07 4:06

That's the minute.

SPEAKER_05 4:08

Exactly. Okay. Good stuff.

SPEAKER_02 4:11

So I think it's important to keep things really simple today. Um, because I know the legislation can get confusing. Um we have to three pillars. Let's start with mutuality of obligation. Uh, Chrissy, could you break that down for us, please?

SPEAKER_01 4:23

Yes. So mutuality of obligation means that in you you will see this in employee and employer relationship where the employer has to provide the opportunity for the employee to work, and the employee also has to accept that if they want to stay employed, right? But in self-employed engagements, there is the lack of mutuality of obligation. So when you are engaging self-employed contractors, they do not have to accept the opportunity to offer services. And then by the same token, the main contractors don't have to offer services for them to accept. So this goes into that that's the general overarching principle. However, then you see with no mutuality obligation how that can segue into actions, right? So how you are conducting yourself throughout the engagement. So the relationship between the employee and the main contractor, what's happening on the ground. Cool shit.

SPEAKER_09 5:23

Yeah. So it's it's it's one of the ones that should actually be quite easy to prove that there's no mutuality of obligation in a self-employed environment because um, you know, everyone wants a flexible workforce. A lot of the drivers do actually want the ability to work when they want and work for other people. Um, but it's actually one of the easiest for them to get wrong. Um, and we see it quite often where you've got companies that want that flexible workforce, but then they want to put something in like a notice period, or they might say, Well, you've got to come in this Sunday, otherwise we're not giving you work again. By doing these things, by putting a notice period in place, or by uh putting some kind of obligation for them to provide their service by putting some kind of financial penalty or the the threat of not giving them further work, you're creating an obligation for them to provide the service, and that's what it's quite easy for people to slip up. So when um you know I'm speaking to clients, I think it's really important that they understand that that is one of the pillars of self-employment, and what are the common things that uh could happen which could slip them up and could land them in hot water should there ever be a case against them.

SPEAKER_06 6:30

I think it's a really good point, and it goes back to something that we're constantly communicating with our customers at the moment, which is using the right terminology when you're communicating with your workforce. So you know, I always use that example, and I won't use the bad French today of you know, the WhatsApp message of get yourself into work today, otherwise you're fired. Yeah. Do you know what I mean? And straight away that terminology creates that what appears a mutuality obligation. And you're right, I mean, we always say, right, that your contract's the first line of defence, and if you've got notice periods slapped all over it, then all of a sudden it starts feeling really employee and less subcontractor.

SPEAKER_09 7:05

Yeah, you can't have your cake and eat it, you know. If you want that flexible workforce, you then can't have the um you know the perks of having someone who's actually employed. You you know, you don't have that, you know, get into other control, which is another one in a bit, but it because they do kind of link into each other, but it's really important that people understand these uh main uh pillars and what the pitfalls are and stay well clear of them. They need to understand what it means to be self-employed so they can maintain a self-employed environment.

SPEAKER_06 7:34

Yeah, for sure. Yeah, I love that phrase, have your cake and eat it.

SPEAKER_08 7:37

Um and Salman Hills uses that phrase incorrectly because I want the cake and I want to eat it, and I'm like, you know that and he's not yeah, but that's what I want you but that's not the friendly notice double because you can't cake and eat it. But I want to eat the cake as well.

SPEAKER_02 8:01

You um you touched on it then, Daryl, about the notice period, but is there any other examples of how it can exist without people realising?

SPEAKER_09 8:07

So obviously the notice period period is a big one, and especially when we're bringing on uh new clients and they're they're sending us their contracts, and that's one of the first things that sort of jumps out to us is because they they you know they they don't understand uh these things that you can and can't do. So that's one of the biggest things. But like we were touching upon there, it's just the it's just the terminology that you're um you're using, you know, even in job adverts, uh we see it a lot where they're saying, Oh, you have to work five days or you have to work weekends. You you're saying you can only have to work if if you do something, you're creating an obligation for them to provide their service on certain days or for certain periods. Anything like that, that would work against the mutuality of obligation.

SPEAKER_06 8:50

That's interesting. Thank you. That's right.

SPEAKER_02 8:52

The second pillar CP vision, direction and control, which is about how much influence someone has over their work is carried out. Could you break that down for us at Chrissy?

SPEAKER_01 9:02

Yes, definitely. So for this one, supervision, direction and control, SDC analysis, it's all wrapped in one, but really control when you're looking at that, it's like the manner in which work is getting completed. So if this I feel like I actually I want to just go back a bit. So with this, with control, if it was taken and analyzed in a legal setting, the courts would look in to say essentially who has control over the work and the manner in which it's done. Um and with direction, they'll go into the analysis of looking at who is actually directing the contractor. I guess the level of how to do it.

SPEAKER_00 9:44

Yeah.

SPEAKER_01 9:44

Really.

SPEAKER_00 9:45

Yeah.

SPEAKER_01 9:45

Um, and then supervision is are you being supervised like an employee? So you have a manager you have to report to. Do you have to check in with them? Do you have autonomy? That type of thing.

SPEAKER_06 9:59

Yeah, of course, yeah. No.

SPEAKER_09 10:01

I think the one of the other important things to remember here is um supervision, direction and control. When you're a genuine contractor, there's actually only one part of that that you really need to concentrate on, and that is the control element. Uh, supervision and direction would really kick in um well, you would have to prove that there's no right of direction, supervision, and control if um they were using something like um an intermediary company or an agency. So agencies and intermediary companies um they don't have the mutuality of obligation or um substitution, which we'll come on to later, yeah. Um, to be able to prove that someone's genuinely self-employed, they have to prove that there's no right of direction, supervision, or control. Now, most of our clients they are uh contractors in their own right, and they're not using intermediary companies, so they're providing a service and not labour. And when you're doing that, you just have to provide that that you just have to prove, sorry, that there's no right of control over that subcontractor. So what we look at um especially within the the clients that we've got is you know how when um you know that that they provide their services, and when I speak to a lot of our clients, it can it can obviously can be a bit of a grey area. Um but we look at you know, if if the say we've got a driver and um he's been given a route. Now, if that's a a route that he must follow to the T, then he's got you know you can't really say that he's got he has got no control over that. But if he's got um a suggested sequence, shall we say, and then the the the driver can make slight changes to that if he sees it more efficient to do so, um then and he and he can do that without having to call up and ask for permission, then we would sort of argue that they do have uh control. Um and but what you can't do is start calling up a driver and say right, um you're doing this job at the moment now. Once you stop doing that, you've got to go and help this person because that wasn't agreed at the outset. You'll you move that shows them overstepping the mark or saying you've got to follow it to the T, and if I call you up, you've got then until you do something else, then you've got to do it. Then you then that's that's definitely control. But a lot of our clients don't do that um within this industry anyway.

SPEAKER_06 12:11

It's interesting, right? Because you know, we deal with a lot of the parcel networks, and at a parcel network level, the degrees in which you one would argue control is is asserted, a different right. Uh, but actually, when you think about it at its highest level, it isn't actually about them controlling the subcontractor, it's about them making their work as efficient as possible almost. You know, they're not doing it for negative reasons, they're doing it for positive reasons, but it is a real fine line, right? Because it's like, okay, we've made this as efficient as we possibly can. You know, we see some environments where you know the driver won't get any route planning at all. They'll go in, they'll load their own van. Yeah, um, they'll be completely responsible for the order in which they deliver parcels, uh, but be super inefficient because they are doing it manually. Um, and then you've got the complete polar opposite of that without saying any names, where you'll go in, it'll be in cages, you'll load it, they'll know exactly what order to do things in. And you know, on the day, like you said, they can go, oh, I'll deliver to 97 before I'll deliver to 95. Yeah. So you know they've got that little bit of flexibility to do it the way they want to. Um, but it's about efficiency and not about STC, really. But it's a real fine line.

SPEAKER_09 13:20

It might be so efficient that that's just the way that they would do it anyway. Yeah, but it's the ability for them to have almost permission to be able to make changes if they see it uh fit because they might have better local knowledge or expertise of a certain area, they might know that particular building a bit better than the algorithm that they've been given. So it's it's making it's it's the ability for them to have controlled it as and when they need it uh to complete it more efficiently.

SPEAKER_06 13:45

I guess as well, if you're doing the same route, which a lot of the subcontractors can end up doing like a mixture of the same routes, even things like knowing when someone's out which neighbor you can deliver it to, right? That starts to become part of he's a my guy that delivers a lot of our stuff to to our house. I mean, he must hate coming to well, I don't know, he must love it when he's route every day, I think, all the sounds of it. Um but he knows exactly what to do at our house. Do you know what I mean? Uh but he it it is interesting, you know. That's and I see him when he pulls up, he knows where to go and who's gonna be in and who isn't.

SPEAKER_09 14:16

Uh and that would only come from having that low level of knowledge and expertise, and it shows that they're you know they're they're experienced in what they're doing and the service that they're providing. Um construction is uh slightly different as well, you know. You've got uh people that go on site, and if you've got someone telling them, Right, you've got to do this, do that, and you know, put hammer it in like this, and then I want you to go and do that. If someone says, Right, I want you to put that fence up, um, and the guy just gets on and does it and then he finishes it and then he goes home, then he's they're not gonna they're not controlling how he how he does it. So he wouldn't have control over that subcontractor. So it depends on what industry as well. Yeah, of course, yeah, you're right.

SPEAKER_02 14:51

So this pillar, do you find that people get around because they just don't understand it unintentionally?

SPEAKER_09 14:56

Yeah, it's I mean, it's I think it's important they do understand it. Um, I think naturally it just kind of plays out anyway, especially within the logistics. I think um, I think in in a in industry like construction, I think they need to be more aware of it because they need to know that that um if they've got someone who is unable to do something by themselves and you are having to tell them exactly what to do, where to go, then they might have to say, well, actually, maybe we can't have this person as a self-employed subcontractor. Um and there's a a line that they must decide, right? When we bring this subcontractor in, are they able to just get on with it? Or do I need to tell them exactly what to do, when to do it, and that kind of thing? Because that might decide how you're actually able to engage them in the correct manner.

SPEAKER_03 15:44

Yeah.

SPEAKER_01 15:45

I think also that that I agree with, um, but with no mutuality of obligation and control, they can be conflated often because they overlap in so many ways. Where it's like, for example, uh, you might say for performance, you can't judge, you can have service level expectations, but you can't judge a contractor based on behavior, performance, things like that. And if you do, that actually goes to mutual to uh control. But sometimes people will think that of that as mutuality obligation, or you'll have that in other circumstances too, with notice. So they'll be like, I don't control them, they don't have to give notice for if they want to go on holiday, things like that, but really that's mutuality of obligation. So I just think when you were asking if if there's a misunderstanding sometimes, they can just be completed, you know, because they do in a way overlap. Yeah.

SPEAKER_06 16:31

Yeah, it makes sense, definitely.

SPEAKER_02 16:33

Next pillar, the right to substitute, and one that's often misunderstood that plays an important part in how salvage point is assessed. What does it actually mean?

SPEAKER_01 16:41

So for the right to substitution, that just means that the contractor is not required to provide personal service. So the services just need to get done. So essentially, um the contractor should be able to provide a qualified substitute in their stead without having to call in and say and or be penalized for not being able to provide that specific service from them specifically, that person. So when it comes down to it was substitution, yes, you do have a right to, as the Bane contractor, to look at the situation and say, I don't think that they're qualified. However, you shouldn't be placing extra barriers or burdens other than I guess, are they competent to deliver parcels in the logistics sector? Don't increase the burden and because you want to show that there is that genuine right and there is the opportunity to substitute. You also don't have to do substitution all the time. If you could point to a couple of examples or a couple of times that your company has done that, that's great to show that you have gener a flow for general, genuine substitution, rather. Um, and there was another part with this. Oh, for substitution also, something to remember is the substitute that's provided by the contractor is completely the responsibility of that contractor. So there's no financial relationship between the main contractor and that subcontractor or substitute.

SPEAKER_09 18:04

Um yeah, totally agree. And I I I think it's um it's it's it is a tough one um because there are you might get you might get a contractor that wants to engage with a subcontractor, um, but the job that they're working on, whether it be in construction on site uh or whether it's working for a you know a big logistics company, sometimes there will be certain sort of um health and safety uh type um inductions that they will require in order to be allowed on site to to make sure they're gonna be safe on site. This is a bit of a grey area because sometimes people can overstep the line, but when it if it is down to health and safety and making sure that there's a safer environment for everyone, then that does then that is acceptable. But yeah, I mean if with with regards to the the substitution, it's the right of substitution. So it's not whether they've actually used the substitute before, it's whether they've got the right of, and that's why it's it's it's kind of good really if it does happen, because then at least you can show that it's possible. Yeah. Um, but if if there hasn't been um an example of it happening, it doesn't necessarily mean to say that they don't have the right, it just means it's harder to to prove because what um someone might try and say is that oh it's just in the contract, but it's not actually possible. Yeah, of course. So it's you know, you the it's we we do try and um encourage people to make sure their subcontracts are aware of it so that if they do uh want to or they see the the need to, then they can, and then you've got an an example of it actually happening to demonstrate again, you know, a decent self-employed environment.

SPEAKER_06 19:37

Yeah, I think this is a really uh interesting one. Um again, probably the the the the pillar that I spend maybe most of my time talking about because it's uh often referred to as the silver bullet from a self-employment perspective, you know, if you can prove that they've got the right to substitute, and I think your point there is, and I I sometimes wonder whether actually the the pillar isn't the right to substitute, is the lack of personal service. That's the that's the pillar. I mean, I think that can be substitutional, pardon the pun. Um but I think it's that lack of personal service, and I think what's super interesting is I mean a lot of companies, a lot of parcel networks that really want to be able to prove that the right to substitution exists, but create these barriers. Uh, and we've had a lot of independent legal advice around what unfettered and fettered substitution is, uh, and actually for it to be unfettered, you know, it's super lightweight what you can and you can't do. Um, and I think it tracks back to that word that you use, Chrissy, which I think is super important, which is a qualified substitute. Uh, and I think that's the line that our clients or anyone listening that uses or wants to have that right to substitution needs to bear in mind is that you can almost enforce that it's qualified, but what does then qualify look like? Yeah, and I think from what I've seen that it's really the health and safety principles of the site, and you know, knowing how to you know access the information that you need, and outside of that, then you should really stay out of it. And I think that the financial chain also is really interesting because I think sometimes from speaking to people, their fear is that the original contractor doesn't pay the substitute. So, what they go is oh, we'll pay the substitute. Well, straight away they're not a substitute, then because you're engaged with them directly, and people get that wrong all the time. They think they're doing the right thing, but they're actually disproving substitution at that point.

SPEAKER_09 21:31

It could even go a step further than that because um you you may have the the substitute that that uh subcontractor decides to use, even if they pay them, um if they've already worked for the business, they could say, Well, they're already known to the business. Now I'd I've heard of um companies actually winning status claims on the basis that that subcontractor has actually subsequent um substituted someone who's already worked for the business, and they've actually said, Okay, that's fine, you're not providing a Personal service, but I've also known other professionals who've said, Oh, I don't think they'd look look too kindly upon that. Um, so we'd really have to be someone who's not known to the business. Um, so there is grey areas, yeah, yeah. And that's and we all we're trying to do really is sort of bring these to the forefront, make sure people are aware of them so they can make their own decisions, and like you said, if they need to like get some independent advice if they're if they're concerned about that.

SPEAKER_06 22:23

I think your point uh as well, Daryl, that you said a minute ago again, which I think is really important, is this he says it in the contract, but it doesn't happen in practice, and that's really important again. We're harping on here because we say this all the time, but pointless have it in the contract if it doesn't happen in practice. So getting that wording right and making sure you're comfortable with it being assessed and someone saying, Okay, does this ever happen? And your point is completely true, it doesn't have to happen for it to be possible, but if it's impossible, then you might as well not have it in the contract. Exactly.

SPEAKER_09 22:52

And like you, um, you keep saying, and we haven't really spoken about ourselves that much, but the contract is that is the most important thing because it outlines the relationship, the the commercial terms, but also the relationship from a um status perspective. Um, and if you've got things in the contract that don't ring true or are impossible, then you start thinking, well, what's the the worth of this contract? Yeah, you know, is it you might as well rip it up because that if there's things within the contract that aren't that that are impossible, then it complete the values the rest of everything in there. So it's really important that when you've got a contract, the clauses that you've got in there are possible. Um and and and you and you stick to that.

SPEAKER_06 23:32

So I mean I c I call it hidden, I mean it's not really hidden, but I think you know, you often hear about people talking about the three pillars of self-employment. Uh and I'll sort of call this the the hidden pillar, and it's not like TM or anything, Jeremy, it's just not my pillar, but um it should be a TM. Um but I think for me this financial risk element um or you know just financials in general are really important because I think one of the things that we come across a lot, and Daryl and Chris, you chip in here, is confusion from a subcontractor's perspective around their status. So are they employed or self-employed? And I think that's where for me financial risk is key because what we're trying to create an environment of here is subcontractors understanding their status, and signs for that for me are okay, they're raising their own invoices, so they're not self-billing, because self-billing for me feels like payslips a lot of the time, especially if the there's no window to sort of query those invoices. So raising their own invoices, I think being VAT registered again is a major one. Um, so I'm not saying everyone, every subcontractor should be VAT registered, absolutely not, actually, because that's even worse in some ways, but having a good mixture of people being VAT registered, because I think again, in the mind of the subcontractor, as an employee, you know you don't have to be VAT registered. So if you're VAT registered, again, it creates that signal. Having a UTR number and filing tax returns, again, you don't do that without realizing you've done it. Um, and I think the other one, which you know we've seen a big wave of over the last couple of years in particular, is paying for your tools to do your job, uh, and then financial consequences for you know damaging tools if they are leased to you, or you know, other consequences, for instance, you know, having a parking ticket or a speeding vine and being the recipient of that. All these things I think add to that feeling of being self-employed and make it feel less like an employee relationship. Um, so and I think I've seen environments where you know it's the worst of the worst in terms of their self-build. The man contractor doesn't allow them to be that registered, which that's always a mind-boggler for me. Um, they don't know, and then there's no responsibility over the man contractor to know they've got UTR numbers and filing tax returns, but they don't know if they are, or there's a black economy being created there. Um, all the other things we've spoken about today exist, so there is uh mutuality of obligation, they don't have the right to substitute, um, they uh they are being controlled and being told what to do. Um, and then you know you layer onto that that they they provide you with a vehicle and they don't have any risk if they damage that vehicle, all of a sudden, actually, you start sitting there and you're going, What is the difference between an employee and a subcontractor at that point? Uh and I think financial risk for me is probably one of the easiest ones to get right. You'd have to do a lot, um, but you can make it look very self-employed. And then what you're talking about is okay, should that driver, in the worst case scenario, ever take you to court and sort of question their status, you'd be going, okay, well, you raise your own invoices, you've VAT registered, you're filing end-of-year tax returns, you pay for your vehicle, you pay for parking fines and damages. So, in what world do you feel like your employees? You're using expenses to reduce your taxes, you know, exactly.

SPEAKER_09 26:53

So if they're getting the benefit of the self-employed environment as well, you know, then it's uh but it the everything you've mentioned there are what I class as the the fundamentals of self-employment. So you've got the three main pillars, and the the fundamentals bolster that self-employed environment. Yeah, so you'll always aim to to tick these three pillars boxes, basically. But there are some grey areas within that. So, what you have to do is you have to look at all these fundamentals and use as many of them as possible to bolster that environment to make sure that they understand that they're self-employed and they're ticking all these additional boxes as well. Because as a as an old friend of ours and uh old mentor, there's the scales. Pull it out.

SPEAKER_07 27:33

Don't see all me.

SPEAKER_09 27:36

More things leading on the self-employment side, then they'll be self-employed. If there are more things leading on the employee side, then they'll be employed. And it is as simple as that. Yeah, um, and but you know, if you have a business, you open a business, you expect to encounter financial risk. No one is lucky enough to start a business. Well, there's not many, I don't think, that can start a business without having financial risk. I know that. Uh exactly. Uh you know, you're gonna raise your invoices and that kind of stuff, and really they should, you know, you'd like them to have their own bank account or whatever. But all these things are the are just expected when you're when you're self-employed. Um, so that we just try to educate uh the our clients, and it's about educating the the subcontrast. When they come on board, they should they should really know that they're self-employed because most of them are working in a self-employed environment for some time for different companies for uh doing their own things. So, yeah, it should be it's just making sure that they do understand that because occasionally you might get someone who comes along who hasn't got any experience in that area and he might just because maybe he's only been employed before, doesn't really realise. So I think it's really important that people um make sure they understand that they're stepping into a self-employed position here. They will be responsible for doing things like raising their own invoices, like doing their tax return, like guessing a UTR. And it just then if if the if they understand it correctly, how can they then turn around and say, Well, I thought I was employed? Yeah.

SPEAKER_01 28:57

I think that the other three principles are can be confusing or more abstract, but that financial risk one makes it undeniable if you're self-employed or an employee based on everything you listed out, so and you as well. So the invoices, leasing, vehicle, paying for the tools, uh, the taxes, all these things. If you're doing all of those and carrying through all those elements, it's really much harder than the subjective analysis of does this person control me? Do you know what I mean?

SPEAKER_06 29:28

Yeah, no, I completely get that. Yeah. I think um going off scripts a little bit here, sorry, Chloe, but I think um we've said it a couple of times and we haven't actually made a section for this, but I think it's worth referencing that. And it loops back to that contract piece, right? And I'm gonna talk about something we spoke about on a previous podcast, which Darryl you'll have a little chuckle about now, which is the old uh you and Simon Hill story of going to uh depots. Oh god. Sharing the best. I can't remember yelling earlier. Um but raise your hand if you work for Amazon and loads of hands got no you don't. Um and I think it's really interesting, like that. I think we've done a we've done a lot as a business to create that separation piece and understand that you are self-employed. But I think one of the things again that always see all the time, actually, pretty much anyone that doesn't engage with us, they'll do this. And these can be huge companies where they'll issue a contract but it gets signed once and it's three years old. Uh, and I think that again just adds to that that thought process of you know, you start becoming part of the furniture and you don't really feel that you've got that self-employment relationship. And I think that's also quite important, isn't it? Exactly.

SPEAKER_09 30:37

Because when you uh first start working for a company, it might it may well be self-employed, but over time you and I say this to a lot of our clients, but people do feel like they become part and parcel of a business. They might start to feel obliged to accept work when it's offered, and the company might start to feel uh more obliged to give them work, and over time they feel like they're they are part of the company. So it's really important that um that doesn't happen and you reconfirm the relationship by getting the contract re-signed because what you're doing is you're reconfirming the relationship so that you can say, Well, because we we have had uh people that have come back and said that in the past and they feel like they've become all part and parcel of the business, and now that they feel that they should be employed. But if you get the contract signed uh on a frequent basis, you can say, Well, at what point did you think that? Because you've signed a contract here, here, here, here, and here. Each time say that you've read, understood, and agreed to the terms of the relationship. And if you didn't feel that way, then you should have told us because that's the way that we see it. Yeah, um, that's the that's the important thing. And uh, luckily, obviously, we've built it into our system now to make sure that uh drivers are re-signing or or any subcontractor is re-signing their contract on a frequent basis.

SPEAKER_06 31:44

I think as well, uh it's important to note here that um because sometimes I feel like as a business, it's definitely isn't our mantra. We're not trying to necessarily take the side of one or the other in terms of driver or man contractor, but I think what we're trying to do is make sure both sides are educated. Yeah, because what we see a lot of is oh, I didn't do a tax ration because I didn't realise I had to because I'm because I thought I was an employee. And actually, what we're trying to do is make sure that both sides understand their responsibilities because there's massive advantages to being self-employed, it's why it's such a big part of the economy, right? Uh because you have got the tax advantages and you can offset your expenses and you can have the flexibility to work when you want, but if you don't understand the pitfalls of it as well, all of a sudden you can find yourself facing a tax bill that you didn't know you had to pay, and all of a sudden all the benefits have been wiped out by sort of a bit of mismanagement.

SPEAKER_09 32:33

It doesn't work educating one side. They both both sides need to be educated, they both need to know where they stand, and that's where you um sort of get rid of these kinds of problems.

SPEAKER_06 32:42

Yeah, for sure, yeah. No good.

SPEAKER_02 32:44

Well, thanks everyone. Done a great job at breaking down all the pillars. But how do they work to get about in practice?

SPEAKER_06 32:51

Yeah. It's a it's a good I'm I mean, I think from my opinion on this to sort of kick us off is I think they, as you sort of said there, and you referenced our uh we should tag them in the comments actually, our good mate Jeremy Lee Chu used to refer to the old seesaw, right? So what you're looking for is as many sandbags on the side of self-employment as you can, right? Yeah. And you're never gonna have, in my opinion, I've not seen many, I've seen some to be fair, but not many environments. We've got this utopia of, you know, you've got exactly the right working practices for all of the three pillars of self-employment, um, and you've got all of the fundamentals in exactly where you want them to be. And you will get the odd circumstance where that does happen. But what you're looking for is as many sandbags on that side of self-employment as you can, um, and then to wrap a really comprehensive, accurate, but not fuller jargon contract around it.

SPEAKER_09 33:47

I was just gonna say um that the thing that brings it together is the contract, but making sure the contract has the clauses that relate to the relationship that you can prove them and that's possible.

SPEAKER_06 33:56

Yeah, sure.

SPEAKER_09 33:57

And so the education.

SPEAKER_06 33:59

Yeah.

SPEAKER_01 34:00

I was just gonna mention that. So for all of them, it's the courts call it a totality of the circumstances analysis. So it's looking at everything, like Dan said. So all the elements together will create the picture of if it's self-employed engagement or if it's an employee or worker relationship. So that I've said that to clients before I like to put them at ease a bit because you might, as you said, you're never gonna have I mean in a perfect world, you would have all of them. But realistically, you're not gonna have meet every criteria. Yeah, but you don't have to worry really, because it's the totality of the circuit system as long as you're doing more than less for the most part.

SPEAKER_06 34:38

Yeah, I agree, Jake, because we get some um prospects that come to us and they want to do something specific with their uh with their drivers, and they've got a good reason for wanting to do it. And you know, our instinct might be oh, you can't you can't do that, but actually that's where we have to sort of get under the under the hood a little bit more and sort of say, okay, well, if you want to do that one particular thing that we sort of feel isn't quite self-employment, as long as you do these five other things, actually you can do that that sort of one thing. So it's about you know, end of the day, all these companies and the individuals or commercial industries, right? So they all want to do things to maximize their profitability and their and their business. But it is about making sure you've got more on the side of right than wrong. And if you know what, just put it out there, if you feel like you can't work under the under the guise of having self-employed subcontractors, well guess what? Employ them. Yeah, do you know what I mean? And that's the reality. If you can't get to a point where these people are self-employed and you want to you can't treat them like self-employed subcontractors, then your model's broken and you should go to employed. Do you know what I mean?

SPEAKER_09 35:40

So yeah, you want you need the you need a bit of flexibility in order to be able to change in a way that you can accommodate self-employment. And some companies find that easier than others. Some of some are to um have certain things determined by the contracts that they're engaged with. Yeah. Um where you know, if you go to a sort of medium-sized construction company, they've usually got full flexibility to be able to make the changes that they want. Yeah, it might, you know, there might be a little bit of work that needs to be done on their internals, but ultimately they've got the decision of what they can and can't do. So if they really want a self-employed environment, then that can be created. They just need to work on it and make a few changes.

SPEAKER_06 36:14

Agreed, yeah. I think as well, like one thing for you know a lot of our customers is where you've got a contract with a particular company that's quite restrictive in terms of what you can and you can't do. Actually, having another customer, even if it's a small percentage of your business, that you know means that you've got this co-working sort of relationship where you know you might have five drivers that also do work for another customer, and straight away then you you you know you've got that. Oh, well, you know, my guys are self-employed because actually they do this work for a for another customer, and in that customer they do this, this, and this.

SPEAKER_09 36:48

And I think it's all little, it's just little lots of little things to bolster that relationship.

SPEAKER_00 36:53

That's a good one. I like that. I never thought about that before.

SPEAKER_04 36:55

Yeah, there you go. I'll bet you cutting the doctor today. I am doing that on myself.

SPEAKER_01 37:09

I didn't put out the first one.

SPEAKER_06 37:15

I've got to be a good one. So my dad's Emma, my brother's jail, so we've got some Mr. and Junior. Uh but I'm doing the best of them. It wasn't done on purpose. Uh yeah, he's like some Mr. and Junior. My brother got a short straw than me, Junior. He's a younger one, yeah. Little Junior.

SPEAKER_07 37:42

No, but I'll let him know he's been mentioned now. Yeah, yeah.

SPEAKER_02 37:45

I think to finish off, from our perspective, what level of support um in terms of compliant working arrangements do we help with clients?

SPEAKER_09 37:52

Well, um, it's it's just about helping people to understand the knowledge that we've collected, um, both from a legal and experience uh side of things. Um and we can we can share this with you and we can point you in the right directions. Uh, we've got lots of experts that we um go to for for for advice and that can sort of jump in as and when needed as well. Um, but yeah, it's it's mainly the the the education side of things, just give it just passing on all the knowledge, all the experience. We we deal with so many clients that are operating within this uh within this sector. Um, so we can sort of let you know or let them know, should I say, um, what our experiences have been for us and our clients in the past and what they've had to go through, where their pitfalls have been. And we're we're always uh sort of keeping a close eye on uh various case law as well. So we'll obviously try and bring that to uh our clients' attention and everything so they can make their own decisions.

SPEAKER_06 38:42

Yeah, agreed, yeah. I think you've you've the the key word there, Daryl, and something that we've just started working on. So half of the press, and this is because you've been on holiday, this will be a little bit of news to you, Daryl. But um I think education, right? That's I think what I sort of see. I don't want to say responsibility, it's a bit too far, right? But I sort of see our mission as is to provide education, and something that we've just started working on uh as a business is I want to create a a public-facing compliance hub, which is really talking about all these topics in a way that no one else does. Uh and we've got an opportunity as a business to help the sector understand self-employment, I think, in a better way than it currently does. Not just the sector, but all sectors, because these are under talked about topics, uh and it's it it surprises me actually, they are so yeah, sort of under talked about uh because they're so important and they they they influence and they open and close businesses every single day, getting it getting it wrong or getting it right. Um so I think we're gonna really invest over the next 12 months in creating a more of an open forum for for compliance, actually.

SPEAKER_09 39:51

Because I think over the over the years, uh because even uh before working, well 15, I think it's actually 17 years that I've been working with this. I know it's it's a long time tax status. Um but uh for my sins, I'm I'm still doing it. And um, but the the when I used to work with uh a lot smaller companies, um it was something that was they were all that would keep them up at night. They would be concerned about it, but they don't really know where to turn to to get that information. Um it's something that they they look at but they never really sort of move on it, but it's something that's keeping them up at night and it's something that's always sort of hanging on their shoulder. Yeah. So it's it's it's trying to put people's mind at ease and give them a platform that they can go to to get more information would be absolutely fantastic, I'm sure.

SPEAKER_00 40:37

Yeah.

SPEAKER_01 40:38

We actually had a really great do's and don'ts session with a a trade plate company, and we we did two of them. And from that, we were able to go into more practical examples of what you might see on the ground in terms of language used by OSMs, or you know, how how does control really look day to day? Um, how does substitution look day-to-day, things like that. So that's a way that we can offer support. And we'd really it's it's I think it's a great session, it's really helpful. Um, and it also just gives you that that quick knowledge when you need it.

SPEAKER_06 41:10

Yeah.

SPEAKER_01 41:10

Um, so that's a good idea.

SPEAKER_06 41:12

Do's and don'ts. That's a great idea. But ultimately, if someone's really concerned, should get in touch. Yeah. Yeah. No, for sure. Yeah, definitely. Definitely.

SPEAKER_01 41:20

I just says Chloe made the great do's and don'ts guide for us, is all that.

SPEAKER_06 41:27

Yeah, no. Do's and don'ts are super practical, right? Uh, and we get unfortunately, I think we get a lot more don'ts than do's. I don't we get often clients come to us and they say something, and you're, oh yeah, you can do that. Because they're normally trying to sort of c they know they're sort of crossing the line, that's why they're asking us.

SPEAKER_09 41:41

Um sometimes what we can do though is we can look at what the commercial outcome is that they're after, yeah, and we can tell you know, we might be able to give them an alternative way to maybe get closer to the commercial outcome they're looking for, but in a in a safer way that s falls within self-employed environment.

SPEAKER_06 41:59

Yeah, mate, for sure. Yeah. I think this tracks back right to the I always say the original mantra, I don't think we we don't have it, but it's this whole, you know, we improve sort of self-employment messaging that we've sort of always had at the heart of the company. And I think uh for to improve self-employment, firstly, it has to be self-employed, right? And you have to have the fundamentals right. And I think you know, this is a a relatively if I include myself, which I don't actually, but you know, it's a very a small department really, but it's in ground in everything that we do, right? The whole system is compliance led and compliance first, and I think you know, it's it's the the thing as a business like you said that can keep business owners awake at night, sometimes unnecessarily. Um I think you know, our part in this is um, and this is something that, as you mentioned, Daryl, one of our uh advisors who's a KC will say is you know a good system is a can be a legal defence. Um but again I won't use the the bad language because I don't want this to get censored. Um but it's the old crap in crap out, right? If you if you manage if you've got bad data or you've got things in your system that or or whatever you're using that can go and can disprove what you're trying to what you're trying to almost put in place. So it's important that you get that information on the way in correct. And I think that is the bit that you know you guys do a brilliant job, RV is no, you can't have that in. Um because you know you will get customers that are super pushy and say, well, we want this and we want that, and you know, our job is to guide, not to tuck it out. Uh so they go against our guidance, and that's fine. Um but we do what more can we do? But we're what we try and do is put it in the very best possible situation before they start using the platform because then they've actually got a nice legal defence and a and a wrapper around it. Absolutely. For sure.

SPEAKER_02 43:43

Thank you.

SPEAKER_05 43:47

How'd you feel? How'd you feel, Daryl?

SPEAKER_02 43:52

Um any clients listening for any more questions, I can reach out to you two.

SPEAKER_09 43:55

Yeah, absolutely.

SPEAKER_05 43:58

We both like to talk, don't we? Yeah. Yeah, you didn't. That's a chatty little bunch, actually, isn't it? We're not the courtiest one out of three, you know it's a problem. Well thanks everyone. Thank you. Cheers.