I have a client who is registed as self employed and claim IS. However, she is only claiming to work a couple of hours a week, she made only £100 last year and her business account is virtually inactive.

Her R2R status is now being questioned. Does anyone know of any relevent decision on 'genuine and effective work' or 'marginal and ancillary acitivity?'

cheers
jw

There is a huge amount of material available concerning what 'genuine and effective' means from the point of view of workers - try R(IS) 12/98, CIS/4144/2007, CIS/4307/2007, for example. I think the original case law is Levin, an ECJ case going back to 1982. That case concerned a part time 'chambermaid', and whether the work was genuine and effective, within the context of Article 39 of the EC Treaty, which is about workers, not self-employed people. What I am suggesting is that 'genuine and effective' may not be the acid test for self-employed people. There may of course be precedent linking self-employed people to 'genuine and effective', but I am not aware of it - no doubt someone will say.

I would have thought that £100 in a year is stretching credibility to breaking point, but thats just what I think. Of all the worker type cases I have read recently, I think CIS/4307/2007 was kindest. The Commissioner in that case suggested that two and a half months part time work would not necessarily be fatal to a finding of worker. In your case however, we have someone who has worked very few hours, over a long period.

Your post suggests the client may have packed up work - don't forget that Article 43 refers to 'take up’ and ‘pursue’ work. This surely therefore includes time spent looking to find self employment, and ‘set up… undertakings' seems to suggest activity leading up to actual production of goods/services etc. Self-employment is all about periods of feast and famine, so maybe the client can be held not have stopped... I feel like I'm clutching at straws here!

Steve

I dont't think that the caselaw on workers and work being 'genuine and effective' is relevant in the case of persons who are self-employed.

Take a look at Judge Rowland's decision in CIS/3213/2007 which was issued on 11th March 09. In that particular case (see para (2)) the claimant had been working for 3 to 4 hours each week "without making any profit". On the facts of that case the claimant was found to have a 'right to reside' as a self-employed person.

Hello Cliff,

Good point. The implications of being self-employed even if you only break even or lose money in the process (by not making any profit at all) do seem to put a distance between self employment and the worker test. It does seem difficult to reconcile loss making, with an activity that is supposed to be 'genuine and effective'. Articles 43 and 48 seem to be pre-occupied with the behavior of self-employment, rather than the financial consequences. Mind you, Article 39 doesn't say anything about being better off as a result of having a job!

Steve

as a newly self employed person ... it takes a while to make anything even if you have a good plan (and in my case, only getting paid when and if i win a PI case doesn't help ...) but one is still working.

it's not about the profit and loss account, surely, but whether you are working?

Hi Claire,

I think you are right. The original question was about the relevance of 'genuine and effective' to self-employment, and the collective view so far is that it is not - its what you do that counts, rather than whether you can afford to eat as a result.

But 'genuine and effective' is probably not about affording to eat anyway. On top of all the worker case law that consents to benefit top ups of worker wages (Kempf onwards etc), CIS/1039/2007 even suggests that part time work whilst on JSA may be enough to make someone a worker (I now realise I am now arguing against what I said earlier in this thread!). Maybe we over associate not being a burden on social assistance, with paying our way.

Steve