We frequently talk about labour subbies here but another important question is what makes somebody a bona-fide subcontractor. Before I discuss this, it is important to make it clear that there is NO cast iron criteria and this discussion is meant as broad guidance and you need to discuss this with your own legal advisers.
So, what is a bona fide subcontractor? Well it’s difficult to be exact as the definition has many variables. It is easier to give a specific example of when somebody ‘might’ be a bona-fide subcontractor.
Let’s say you get a JCB and driver in to clear some earth or dig a hole. They have their own very expensive plant, which you do not know how to use, so therefore you cannot instruct them or take charge. They have quoted you a rate for the job and not an hourly or daily rate. They are working for profit and reward. They have their own safety procedures, insurance, work under their own steam and without your supervision. They won’t be working under your instruction as they are very much the expert in this area. If this is the case it is likely the JCB owner and driver will be deemed to be a ‘bona fide subcontractor’.
So what is a labour-only subcontractor then? Well again it’s is difficult to give an exact definition but let’s run with an example to demonstrate the difference. You use a self-employed groundsman or climber to assist you. You tell him what time to start and the way you are planning to tackle the job. You will be instructing him even by saying start at 8am. Clearly you are in charge and as such you are responsible for his health and safety. You are very unlikely to have a bona fide subcontractor relationship with any climber or groundsman. In fact, it is almost impossible. If you use labour-only subcontractors then with very few exceptions the law requires you to have Employers’ Liability Insurance.
You need to be aware that this is an example only. There is never a 100% guarantee that a court would deem somebody to be a bona-fide subcontractor. I discussed this once with an insurance lawyer and I asked if there was a cast iron way of telling if somebody was indeed a bona-fide subcontractor. Yes he said. Wait until they injure themselves and see if they can sue you! If you need more information or a business insurance quotation call us now on 01732 373864 www.tsins.co.uk