Other legal relationships which are equivalent to employment relationships

The Equality Act’s provisions on employees also apply as appropriate to persons working in other legal relationships that are equivalent to employment relationships.

This refers to types of work which are similar to employment and service relationships, where the work is carried out under the same circumstances as in employment and service relationships, but which are excluded from the scope of the Employment Contracts Act and other legislation relating to employment relationships. Such groups can be e.g. contractors and self-employed workers, freelancers, interns and carers. In these cases the work is usually carried out on a commission or contract basis.

The definition of employee does not cover all kinds of work that is carried out outside an employment relationship. For a legal relationship to be equivalent to an employment relationship the work has to be carried out in similar conditions as in employment and service relationships and the worker has to be personally committed to work carried out for another person, even if they do not have a contract of employment.

For contractors and self-employed workers the prerequisite is that they mainly sell their own skills. From the point of view of employment and social legislation (e.g. unemployment benefit and pension) these people can be entrepreneurs, but they cannot have a business with a risk to the entrepreneur or any employees. They work in the same way as the client's own employees, even if there is no right to direct the work. Working in the client's offices and with the client's equipment is not required. The legal form of the activities (e.g. tax deduction card, sole trader, company type) has no relevance for the definition of an employee; the determining factor is the actual nature of the activities.

This definition does not usually apply to relationships between two self-employed workers. The definition also does not cover leisure activities and other voluntary work which is unpaid, as well as all work without a gainful purpose, such as work based on family law. The general prohibition of discrimination in section 7 of the Equality Act and potential damages that have to be paid out as a consequence for violating this prohibition do also, however, include these groups of workers.