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I was talking to someone yesterday about the effect the Uber decision is going to have on his business. He come up with an interesting response:
“If my service providers are really in business for themselves – isn’t it up to them to provide terms of trade?”
Control v Clarity
He was thinking that by issuing the terms on which he was prepared to buy services, he might somehow be straying into ‘control’. He knew enough about it to know that was a ‘bad thing’. He felt that by controlling nothing he could demonstrate that the people he paid were really in business.
Should you be concerned about this too?
Test of who is a contractor running their own business and who is a worker (or an employee) is not about who provided the terms of trade.
Control is not about who wrote it down
The tests for who is your worker and who is your employee are based on things like control, substitution, who is really ‘risking’ what. That’s how Uber came unstuck. It was the amount of control they exercised and how they operated that has lead them into court.
Clarity is easier
If your agreement is written down and it meets the relevant tests you will find it a lot easier to deal with the way we work today. We call it the duck test!
You need to sort this out
Running a business is not like being a consumer. There aren’t so many laws to protect you. It is more a case of ‘buyer beware’.
- There is no duty on your supplier to protect you
- You’re the person who needs to make sure it is all correct
We call it the battle of the terms
If your supplier has not terms of trade (and that is surprisingly common) then any dispute between you will have to be resolved by a lengthy investigation of emails, what you normally do, what they normally do, how you work.
If you have your own ‘terms of purchase’ agreement then those will fill the empty gap.
If your suppliers have their own sales terms you will have to work it out.
Suppliers are not obliged to be generous
Your supplier has no obligation to create terms that are fair to you, or keep you out of trouble with HMRC, the employment tribunal, or even assign to you the rights you think you have anyway.
If you are relying on them to protect you from harm later on – then you may come sadly unstuck! If you want a scalable, saleable business with no nasty surprises, you are going to have to make this part of how you operate.
Would you like your terms reviewed?
If you are already using written contracts with the freelancers and contractors you pay – we’d be happy to do a FREE review to see if you need to change what you are doing. We have a limited number of free reviews available each month – so don’t delay. Just email us at firstname.lastname@example.org and we will get the process started.