Is this legal?

sassypurple

Hi hope someone can help my husband works with 3 others for a company today they have been offered the opportunity to buy some of the equipment and then they can have the contracts on a self employed basis that they currently do for the company. Basically they will have no employees at the company but all the work the 4 currently do will be done by sub contractors/self employed people. Does it make a difference that it is a very small company and if they do not take the offer of buying the equip etc will they qualify for redundancy pay.

Thanks in advance

DVardysShadow

What makes you think it might be illegal?

AFAICS, whether or not they go self employed, if they are out, it should be redundancy - if they buy the equipment, the company could be hoping to offset it against redundancy or even hoping that they will go voluntarily and forget about redundancy.

One of the things I would look out for is the company selling them this kit and then ceasing to trade - in which case is the kit any use? If I went along with this idea, I would keep the redundancy money and offset the equipment against work over say a year, with the option to return the kit if work dried up.

wuckfit

If your husband becomes a self-employed contractor but only does work for the one client, then HMRC class this the same as him being employed by that client, as I understand it.
in practical terms its a way for a company to attempt to circumvent redundancy and/or holiday payments.
However, I'm not qualified in employment law. it might be worth getting the opinion of someone qualified in this area.

Pete111

If the work is all being subcontracted out then it's quite likely a TUPE situation and the employees should be moved with the work to the subcontractor on the same terms and conditions

However given what you say about being able to retain some work by going self employed, the pragmatic approach may be to insist on redundancy and then pick up the work via the new agreement - However, redundancy pay will still be owed.

fengirl_2

If they are doing the same job for the company, then this is a scam by the employer to avoid having to pay NIC, holiday pay, sick pay or redundancy for these men. The firm cannot just decide they are self employed - only HMRC can do this. If HMRC find out that the employer has done this, the employer will be liable for the tax and NIC as the treatment is incorrect.
Your OH will have no security of employment and will not be able to claim JSA should the work finish.

timmmers

I'm wondering if this change would pay more ?
Apart from the previous advice ....he would basically be paying to do his current job, maintaining the gear, have no security (as he has now)....the worst of both worlds.

The employer gets his capital tied up in gear back, less expenses for staff and no responsibility for anything at all?

If they were made redundant already...then the idea may be more logical, not to mention fairer.

Hell, they could end up in debt with loans to do the job they do already if they borrowed to buy gear? :rolleyes:

t

sassypurple

Thanks everyone all four have said no to becoming self employed and after a while they have today been given redundancy letters. At least we know where we stand now thanks again.