The exact set up of your working operations and how you sub-contract out work would have to be analysed in order to be sure over how you deal with this situation.

If you are asking outside contractors to take over some of the work your company currently does then there is potentially a transfer of undertakings situation to deal with.

A transfer takes place when a company is bought out or, alternatively, when there is a service provision change. A service provision change is when work is outsourced, brought in house, or when contract work is lost by one company and won by another.

Legislation works to protect employees’ employment and continuous service in the event of a relevant transfer so your employees would become the employees of the company you sub-contract out to.

You, as the ‘outgoing employer’ have certain obligations in relation to the provision of information when a transfer takes place.

Changing the status of individuals from employees to self-employed is a tricky area. There are fundamental differences between the obligations you have towards an employee and those you have towards a self-employed person. It is the way that you treat an individual that determines his ongoing employment status, and simply changing the label that you give to someone will not be enough to convince a tribunal that an individual is self-employed and not an employee and that your obligations towards him have consequently also changed.

You will need to entirely change your working operations in relation to these individuals in order to evolve the working relationship to that of self-employment but even then it may well be open for the individual to claim he is an employee and has continuous access to employment rights.