Update on the freelance file

Supreme Court has given further guidance on the qualification of a working relationship as one of employment in the "Uber ruling"

In what is known as the "Deliveroo judgment", the Supreme Court gave a number of criteria that, in its view, are essential when assessing whether a working relationship qualifies as one of employment or not: 

• The nature and duration of the work
• How the activities and the working hours are set 
• How the work and the worker fit into the organisation (embedding)
• Whether or not there is an obligation to perform the work personally
• How the contractual arrangement of the relationship between the parties has been set up
• How the remuneration is set and paid 
• The amount of the remuneration
• The degree to which the contracted party runs a business risk in the assignment
• The degree to which the contracted party can and does operate in the market as a business owner (entrepreneur)

In this ruling the Supreme Court did not indicate whether some criteria weigh more heavily than others. This has led to questions, in particular, about the importance of entrepreneurship on the part of the worker. 

In a recent case between the FNV Union and the ICT platform Uber, the Supreme Court was therefore asked for a preliminary ruling to obtain more clarity on how entrepreneurship should be weighed in the assessment of a working relationship. Another question also raised was whether a business owner worker should be viewed only in the context of the working relationship between the worker and the client or whether it should also be taken into account that, as a business owner, the worker also performs work for others. 

The Supreme Court’s answer is clear: there is no ranking of the various criteria. Being self-employed therefore weighs the same as the other criteria. Entrepreneurship counts but is not in itself decisive. This means that business ownership should be looked at in broad terms and is not limited to the working relationship under assessment. As a result, it may indeed be the case that the relationship of workers performing the same work for one client may be qualified differently if one is a business owner and the other is not. 

The ruling thus provides further guidance on how to apply the criteria set out in the Deliveroo case. In so doing the facts and circumstances of the working relationship should be considered together, with all the elements having equal weight. In practical terms this means that both rulings provide guidance, but that nevertheless, the qualification of a working relationship as one of employment cannot be reduced to the result of a simple calculation. 

Possible impact on payroll tax?

Although neither ruling was made in a tax dispute, they certainly have an impact on the assessment of an employment relationship for payroll tax purposes. Indeed, for payroll tax purposes the same definition of employment is used as in these rulings. Against this background it therefore appears to be increasingly important when assessing a working relationship for payroll tax purposes to clearly record that these criteria have been applied in making the assessment and why a particular decision has been reached. This will ensure that in the event of any (future) difference of opinion about the result, the arguments intended to convince the tax authorities have, in any event, been clearly recorded and can be easily reproduced.