COMPANIES which outsource work to self-employed workers in a bid to avoid employment legislation could still end up with hefty fines, warn lawyers.

Firms frustrated at the ever-increasing burden of employment red tape have been using workers who operate as one-person limited companies.

But bosses could still find themselves liable under the law - despite the fact that self-employed workers are not technically "employees".

The avoidance strategy had "backfired on businesses badly," said solicitor Gillian Leach, a partner at Hampshire law firm Blake Lapthorn.

"Discrimination laws apply to 'workers' - not just 'employees' - it's much broader," she told a Federation of Small Businesses meeting at the Queens Hotel, Meyrick Road, Bournemouth.

Some small firms were tempted to take an "informal" approach to employing staff but when things go wrong "lack of certainty normally counts against the employer and makes their case indefensible".

"Employment law is changing on a daily basis," she added, referring to the proposed new age discrimination Bill published on May 7.

But much of it was simply a matter of common sense and good practice in the implementation and documenting of terms and conditions, contracts, grievance procedures and other statutory paperwork.

"Most cases lost by employers are because there have been procedural flaws. Somebody didn't put it down clearly in writing," said Ms Leach.

"That is the reason why people lose cases - not because the employer has done something dim or malicious.

"But there is an argument that it is becoming over-bureaucratic," she added.