There are numerous reasons why a company would consider having persons rendering services on a self-employed basis. While this may seem like a mutually positive arrangement, the Employment Status National Standard Order may pose a hurdle. The Order sets a threshold which, if satisfied will cause the self-employed individual being deemed an employee on an indefinite contract, regardless of the existing contractual relationship. In fact, if 5 out of the 8 criteria are satisfied, then this will be the case.

The criteria relate to (amongst others) the amount of income that the individual receives from the company; the determination of the work to be carried out for the company; whether there is a specified working schedule; the possibility of the individual to contract with third parties; as well as the integration of the individual’s role within the organisation.

Having said that, there is the possibility of requesting an exemption from the Director responsible for Employment and Industrial Relations before contracting with the individual, however, this is only given in exceptional cases and the chances are that if you find yourself in a position where the above threshold may be satisfied, then there is an employment relationship.

Companies often overlook the Order until a claim is brought against the company with the result that the self-employed individual will be entitled to all employee benefits, including payment for overtime and compensation for unfair termination. In addition to this, the Order also imposes a minimum fine of €1,000.

Depending on the circumstances, there may be other options available to protect the company and operate within the remits of the law at the same time.