Employment status, the categorisation of whether someone is an employee or self-employed, is an extremely fluid area because legislation on the topic is distinctly lacking.
Certain tests have been devised by tribunals that will be applied to the actual working relationship rather than any label given to it at the start. One focal point is the ‘control’ that you will have over the way the individual works.
Will you be able to dictate how he works, what his working hours are and will you be able to terminate the relationship if you no longer wish it to continue? If the individual wants time off to take a holiday, for example, or to attend a medical appointment, will you expect that he clears this with you first? Whose equipment will he use? Will you provide premises he works from?
The more control that you exert over an individual, the greater the indication that he is an employee and not self-employed. Another area to look at is whether any obligation exists between the two of you. Will any contract you have oblige you to give him work to do, or oblige him to do any work that you give to him? If you did, for instance, create some work for him to do, would he be able to turn it down?
Where obligations exist between the parties, an employee relationship is inferred. It is also significant whether the individual would be able to delegate any of his work to another person without your control or prior approval. In order to be considered self-employed, an individual must be able to send a substitute to perform the work instead of him, and this must be without restriction from yourself. Any restriction you place on the ability to send a substitute will temper any self-employed label you place on someone.