26 Oct 2016
There is a plethora of case law regarding employment status; however the fundamental factor for an Employment Tribunal when deciding the employment status of an individual is that they will look at the service agreement or contract and the circumstances to assess whether the status of the individual is consistent with being an employee, worker or self-employed contractor.
Employed v Self-employed
What's the criteria?
Effectively they will look at the irreducible minimum of obligations; employment tends to need mutual obligations, with sufficient control over the individual’s working hours, working practices and rules. Whereas the worker definition tends to require less control over the worker than an employee by the employer and to concentrate more on the element of personal service by the individual i.e. whether they are required to carry out the service personally or are they permitted to substitute themselves for another person to carry out their service.
What are their entitlements?
Both employees and workers are entitled to holiday and sick pay, rest breaks, national minimum wage and protection against discrimination and being subjected to any detriment for whistleblowing. Conversely, self-employed individuals are excluded from any of the above and therefore can be left in a vulnerable position within the organisation.
This week over fifty foster carers voted to join the Independent Workers Union of Great Britain (IWGB) and plan to achieve employment status of that of worker or employee, as they are currently treated as effectively self-employed. The foster carers are paid an allowance by their local council to cover the costs of looking after the child in their care and they are also paid a fee based on their skill level and time. Therefore, by making the decision to join this Union the foster carers hope to progress, either by litigation or legislation, that they are viewed as having the employment status of at least a worker for the Councils.
The IWGB Union have also instigated a campaign to have a group of cycle couriers recognised as workers rather than self-employed contractors. Similarly, recently the Government has asked HMRC to investigate the doorstep courier company, Hermes, in relation to the employment status of the 10,000 couriers they engage on a purported self-employed basis.
The Government has called for this investigation after they received over 70 complaints from these couriers regarding the working practices of Hermes and allegations of bullying and victimisation by the middle management within the organisation. Again, without the employment status of being an employee or worker of Hermes, these couriers have been without recourse to the Employment Tribunal to bring such claims.
We shall await the outcome of the HMRC investigation and the progress of the foster carers and cycle couriers, which may ignite similar action from other groups of individuals who are similarly engaged by an organisation on a self-employed basis.
If you're unsure whether your staff classify as employed or self-employed, speak to a Croner expert today for assistance with employment contracts on 01455 858 132.
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