Friday, 27 September 2019 08:32

Employee, Worker or Contractor?

'Part-time’, ‘temporary’ and ‘casual’ are phrases that tend to be commonly interchanged when referring to employees; however these terms mean different things from a legal standpoint so it’s important that employers are clear about the status of anyone who does work for them, and refers to it accurately. A worker’s status can drastically affect the rights they are entitled to, particularly around unfair dismissal and redundancy.

Here’s a brief guide to employee status with a synopsis of the rights of each. This is just top line so if you are in any doubt about the status of someone carrying out work on your behalf, you should contact us for further advice. 

Full-Time Permanent Employee: An employed member of staff who works a full working week (Usually 37.5 hours but can vary) and for whom you deduct PAYE tax and National Insurance through your payroll. They are entitled to paid holidays of at least 28 days including public holidays per year and statutory sick pay, maternity/paternity/adoption/parental/shared parental leave. Full employment rights accrue after two years’ service.
Part-Time Permanent Employee: The same as a full-time employee, including rights accrual, but will work for a reduced, set number of hours or days per week; e.g. 16 hours per week or 3 days per week. Holiday and some other benefits will be calculated on a pro-rata basis.

Temporary Employee: A member of staff employed for a set period usually less than 6 months. If a temporary worker is taken on as a permanent member of staff without a break in employment of at least 2 weeks, the period of temporary work will be accumulated with their permanent term when calculating rights. A temporary worker who has worked for you for more than 24 months will have accrued the same rights as a permanent employee.

Temporary Employee – Agency Employed: For very short term appointments of just a few weeks or even days, temporary staff are often taken on via an agency. In this situation, workers are usually employed by and paid by the staffing agency. Current legislation means that they have equal rights as employed staff for company facilities and benefits such as a staff canteen or crèche; and rights to equal pay after 12 weeks.

Fixed Term Contract – Fixed term contracts are usually used to employ staff to manage or cover a specific project or period of maternity leave. Once that project is complete the position for which the fixed term contract was instigated no longer exists and the employee is let go. The worker is employed by you for the period of the contract. Again, workers under fixed term contracts of more than 24 months will accrue full employee rights. This means that redundancy might be the more appropriate option to terminate the contract if employment exceeds 2 years.

Casual Workers – Casual workers are likely to be employed on a zero-hours contract. They are only given work when there is work to be done and therefore only paid when they have carried out any work. There is no obligation for an employer to provide work or for the worker to accept. Event catering is a good example of an industry that would use casual workers. Casual workers don’t have any rights although once again this changes if they worked continuously without a break in service for more than 24 months. In any documentation they should be referred to as workers and NOT employees.

Contractor – A contractor would be self-employed or employed through another company and provide services to you for a fee. You would not be responsible for paying a wage or salary nor any benefits. Instead you would pay in response to being invoiced. The relationship would be governed by Business Law rather than Employment Law. However, a contractor who works exclusively for one customer for an extended period of time might be considered to be an employee by the Inland Revenue and so subject to PAYE rules. If you’ve heard anything about IR35, this is what it relates to.

In all cases you should at the very least check that your employee’s contracts describe what you believe their status to be. If there is a discrepancy, don’t act without seeking advice as you may unwittingly be in breach of contractual terms. You can contact us for further advice or assistance regarding employee statuses and relevant contracts by telephone on 01452 331331 or by e-mailing This email address is being protected from spambots. You need JavaScript enabled to view it.

Read 1514 times Last modified on Wednesday, 11 May 2022 10:51


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