CIS Labourer Holiday Pay?

[ionfly]

Hi folks. Just wondering if anyone is familiar with case law relating to CIS labourers claiming holiday entitlement, and if this effects their employment status for tax purposes?

[Kati]

Re: CIS Labourer Holiday Pay?

[MENTION=19071]teaboy2[/MENTION] [MENTION=26290]mariefab[/MENTION] [MENTION=70489]judgemental24[/MENTION]??

[wales01man]

Re: CIS Labourer Holiday Pay?

Are you self employed or on PAYE

[ionfly]

Re: CIS Labourer Holiday Pay?

Are you self employed or on PAYE

Not on PAYE, but this is the debate. Somebody who is paid through CIS, but treated for all intents and purposes as an employee (high level of control/supervision) and service in person (no substitution) could be deemed to be either a 'worker' and subject to some employment rights, or an employee.

[wales01man]

Re: CIS Labourer Holiday Pay?

Have you asked your employer for holiday pay

[ionfly]

Re: CIS Labourer Holiday Pay?

Yes. They say we are self-employed, which is not the case according to HMRC's ESI & 'Badges' of trade...

[des8]

Re: CIS Labourer Holiday Pay?

According to employment law, my understanding is that a selfemployed subbie is a worker and therefore entitled to holiday pay. However tax law might view things differently!!
Is this what you were looking for?:
In Plastering Contractors Stanmore Ltd v Holden UKEAT/0074/14, the EAT considered whether an employment judge had correctly held that a self-employed sub-contractor was in fact a worker.
The EAT has upheld an employment judge's decision that a general labourer, who was employed for four years before accepting £200 in exchange for becoming a labour-only subcontractor for the same company, was a worker for the purposes of the Employment Rights Act 1996 and the Working Time Regulations 1998 (SI 1998/1833).
Background
Section 230(3) of the Employment Rights Act 1996 (ERA 1996) and regulation 2(1) of the Working Time Regulations 1998 (SI 1998/1833) (WTR 1998) define a worker as:

1. an individual who has entered into or works under (or, where the employment has ceased, worked under) either:
2. A contract of employment; or
3. Any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual.

A worker is entitled to holiday pay under the WTR 1998 and has the right not suffer unlawful deduction from wages by virtue of section 23 of ERA 1996
To be classed as a “worker” there must be:

• Mutuality of obligation: Was there mutuality of obligation between the individual and the employer? This is an essential element for the individual to fall within the category of worker.
• Personal service: Did the individual undertake under the contract to personally perform work or services? However, a limited power to appoint substitutes is not inconsistent with an obligation of personal service.
• Business undertaking: Was the status of the employer under the contract that of a customer of a business undertaking carried on by the individual?

Facts
Plastering Contractors Stanmore Ltd (PCS) provided a plastering service to the construction industry. Between 7 April 1997 and 7 February 2001, Mr Holden was employed by PCS as a general labourer. However, with effect from 7 February 2001, it was agreed that, in exchange for a one-off payment of £200, Mr Holden would become a labour-only subcontractor. Thereafter, he was paid under the construction industry scheme, under which PCS accounted to HMRC for 20% of his gross pay. Mr Holden used an accountant to ensure that he paid the correct tax.
PCS put Mr Holden on its database of labour-only subcontractors. When services were required at a particular site, either the Contracts Manager or a supervisor would contact him to offer him work. Mr Holden was regarded as experienced, hard-working and had worked on many sites. While on site he was under the instruction of the site supervisor. Whether he was paid by price or by time depended on the work he was doing. Rates of pay were set by PCS and rather than Mr Holden submitting invoices to PCS, the supervisor recorded his work and PCS's office arranged payment. Mr Holden provided his own safety boots but PCS provided other safety clothing, a high-visibility vest, hat and gloves. If he had to transport equipment between sites PCS provided him with a vehicle.
PCS was not obliged to provide Mr Holden with work and he was not obliged to accept it. While there were occasions when PCS could not offer Mr Holden work and occasional days when he declined work (so he could take his wife to medical appointments), Mr Holden worked almost exclusively for PCS until May 2013. He did not advertise himself to the world as a labourer.
Mr Holden stopped working for PCS when he became increasingly frustrated at having to spend more time at home waiting for a call to tell him that work was available. Without notice to PCS he decided to take up similar work with another company. Mr Holden then brought a tribunal claim for unpaid holiday pay, arguing that he was a worker and that the failure to pay holiday pay amounted to a series of deductions. PCS argued that he was not a worker but, if he was, he was only entitled to payment for leave in the last holiday year.
An employment judge held that Mr Holden was a worker for the purposes of ERA 1996 and the WTR 1998. PCS appealed against the decision which the EAT dismissed.
Comment
This case makes clear that changing status from employee to subcontractor in return for payment will not be sufficient to preclude a finding that an individual is a worker, with a worker's entitlements, when that is the appropriate finding on assessment of all the facts.
The case has now been remitted to a tribunal to decide Mr Holden's claim for holiday pay. The significance of bringing a claim for holiday pay under the unlawful deductions provisions of ERA 1996, rather than the WTR 1998, is the ability to claim for a series of deductions. Mr Holden appears to be arguing that he should be able to recover unpaid holiday pay between 2001 and 2013 while PCS is arguing that his claim is limited to the last leave year.

[wales01man]

Re: CIS Labourer Holiday Pay?

Having been self employed all my working life I never got holiday pay from anyone some I worked for up to 4 years solely .
If the OP asks his main employer who he suns to for HP I think he may get an answer he doesn't want. Part and parcel of paying your own stamp and tax is the fact you should be getting more net pay than a PAYE worker that's why the OP is denied holiday pay as are millions of subbies.

[meellis]

Re: CIS Labourer Holiday Pay?

CIS deductions are from the labour element of being self employed within the construction industry which basically means that 20% of your labour charge is taken and paid to the taxman and you get a certificate/receipt for these deductions. When you do your tax return (being self employed) these deductions are used in the calculations of your taxable income and you will either receive a bill for more tax, a return to state you have no more tax to pay or a rebate because you have already paid to much. Your contractor will have a strict number of days/weeks/ months of the year they will be able to contract you before HMRC will consider you being employed by the company in question. Some companies will get around this by paying through different companies within the company.

[ionfly]

Re: CIS Labourer Holiday Pay?

Having been self employed all my working life I never got holiday pay from anyone some I worked for up to 4 years solely .
If the OP asks his main employer who he suns to for HP I think he may get an answer he doesn't want. Part and parcel of paying your own stamp and tax is the fact you should be getting more net pay than a PAYE worker that's why the OP is denied holiday pay as are millions of subbies.

Generally speaking, he will get that answer in most cases, although that doesn't make it right. Greater net pay with no NIC contributions (with consequences upon reaching retirement age and applying for state pension) but stripped of benefits, to the tune of 800-1,200 per year on a labourers wage, I'd say 'self-employment' for labour only 'subbies' more serves the contractor as they don't have to submit NIC to HMRC or pay sickness or holiday pay.

So far as I understand, labour only 'subbies' are in a different category to other subbies due to the level of control and the personal service aspect. Generally speaking, self-employed sub contractors will supply their own materials and method statements, they will dictate their own hours and are often paid price. They will put in quotes for multiple jobs over the course of time and be responsible for any repair of damages and/or poor workmanship out of their own pocket. They will usually run a business and be responsible for any profit or loss. A far cry from a labourer paid an hourly rate!!

[wales01man]

Re: CIS Labourer Holiday Pay?

The Law can be what it is but Subbies are employed on CIS to save employers money they and the subbie have very little employment rights if the OP is thinking they are employed on the cards tell the employer that's what they want and see the result one which can be guaranteed in most cases I expec

[meellis]

Re: CIS Labourer Holiday Pay?

When I have dealt with CIS both as a contractor and subbie it can be a minefield with no clear guidance. Every official I ever consulted seem to have a different opinion but the key things are how much the subbie has to do themselves and how much the contractor does. Some of my friends are Ashphalters and it has been argued that they just turn up and get in a van everyday with all tools and clothing supplied and paperwork done for them hence are as good as employed. This seems similar to the case law shown but a different opinion is taken if they price and invoice the work and supply their own transport and tools.