When is an employee not an ’employee’?

Posted 23/09/2012

The answer is when he or she is a ‘worker’ or is self-employed.

Despite the increase in recent years in more flexible types of working, the status of so called ‘casual workers’ is still a frequent battle ground in employment tribunals. No wonder, as the rights and entitlements associated with employment status differ significantly depending on whether someone qualifies as an ‘employee’, a ‘worker’ or is simply self-employed.

Employees can claim a whole gamut of rights such as the right not to be unfairly dismissed, whereas workers can, amongst other things, claim holiday pay, and the National Minimum Wage. All, including the self-employed, have the right not to be unlawfully discriminated against. 

So how do you know which category your casual workers fall into? Well, it is possible, to glean some basic principles from case law but, be careful, as recent tribunal decisions have shown a trend towards extending employment rights.  

For some time now it has been clear that, for someone to be classed as an ‘employee’ the following must apply:

1.    the work must be carried out by the worker and not passed to a substitute;
2.    the employer must have some control over how the work is done; and
3.    there must be an ongoing obligation on the worker to do the work undertaken  – this obligation can apply to each separate assignment, or it may also continue between assignments.

With workers, however, point 1 above will definitely apply, point 2 may apply, but point 3 will not. In other words, workers must carry out the work personally, but employees have a further duty to complete the assignment or to continue with the work – at least until the working relationship is terminated.

All this seems fairly clear, but in a number of recent cases, the Employment Appeal Tribunal (EAT) has effectively made it easier for casual workers to claim that they are employees. In the most recent of these, the EAT decided that a market researcher for MORI, who carried out assignments which could in theory be terminated at any point, could still be an employee. The fact that MORI could terminate the relationship at will was not fatal to the existence of an employment relationship.

In another case concerning carers, the EAT looked behind the written contract to find that the carers concerned had an ongoing employment relationship which continued between assignments, thus preserving continuity of service. This, of course, gave the employees the required length of service to claim unfair dismissal.

So where does all this lead? For those who are gripped with excitement at the prospect of the removal of employment red tape, it might be premature to celebrate. Whilst the Government is busy making plans to make life easier for employers by reducing employment rights (read Ross Strowger’s article on proposed employment law reforms), the EAT appears focussed on expanding employment protection.  

Please contact a member of our employment team if you need a clear indication of the rights of your casual workers.