Back

Employment Legislation Update: March 2017

Employment Legislation Update: March 2017

You may have heard of the ‘gig economy’ which is a phrase increasingly used and it refers to temporary or short term contracts or freelance work carried out by independent workers. 

n

People can be offered work, they do the work and then they wait for the next ‘gig’.  They are usually regarded as self-employed and get paid for the ‘gigs’ whether it is a taxi journey or making a delivery.

n

It is estimated that around five million people are part of the ‘gig economy’ and this has led to a growing amount of activity regarding employment status where individuals have challenged companies resulting in several high profile court cases including Uber and Deliveroo.

n

There are three broad types of employment status – employee, worker and self-employed.  When you think of the latter you tend to think of someone in business in their own right who carries out work for different people such as a plumber or electrician. 

n

The difference between an employee and a worker, however, can be a grey area.  For a person to be an employee, the employer undertakes to provide work and the person agrees to do this work in return for pay and on terms and conditions set by the employer.  The employee is obliged to perform the work personally and they cannot send a substitute.  The employer also has a right of control over the employee and can determine where, when and how the work is carried out.

n

So who is a worker?  This is someone who works under a contract of employment or ‘any other contract’ whether express or implied whereby the individual undertakes to personally perform any work or services for another party to the contract.  Workers can include casual, freelance, zero hours and self-employment individuals and they are entitled to some employment rights including National Minimum Wage and holiday pay.

n

This is where things get complicated and whilst the terms of a contract are relevant, an Employment Tribunal will look beyond these to establish what actually happens in practice.  Recent cases have shown that where an individual has little autonomy to determine how services are carried out, they cannot send a substitute to do the work and the reality is that they are not running their own business, they will be considered to be a worker or perhaps even an employee.

n

Things are not always straightforward and the Government is currently looking at employment status and there are also calls for the term ‘worker’ to be abolished.

n

If you do employ people who are classed as workers or self-employed, it is important that you understand the difference.  It is also worth looking at the recently launched and new online tool from HM Revenue & Customs which can determine whether someone is an employee or self-employed for tax purposes.

n

If you would like further information or support for your business please contact Sheila Watson on 01429 857082, sheila.watson@hartlepool.gov.uk

n

 

Share this post...