Why It's Important To Get Worker Status Right

Understanding employment status is crucial for both employers and individuals to ensure compliance with employment laws and to uphold workers' rights. Elizabeth Watt, Employment and Litigation Solicitor at WSP Solicitors, outlines the essential elements you need to have in place to correctly manage and classify employment relationships.

What are the three types of employment status?

• An employee;
• A worker; or
• A self employed contractor.

Understanding Employee Rights and Obligations

Individuals with employee status have the most rights but also the most obligations to their employers.

If most of the following apply an individual is more likely to be classed as an employee:

• They are required to work regularly unless they are on leave;
• They can usually expect work to be consistently available;
• They cannot unreasonably refuse to do the work;
• They get paid holiday – they might also have additional contractual holiday entitlement;
• They are subject to the employer's discipline and grievance procedures;
• They need to give notice to their employer if they want to take maternity, paternity or adoption leave;
• They cannot get someone else to do their job;
• Their employer decides how, when and where they do their work;
• Their employer provides the materials, tools and equipment for their work.

Employees have the most protection in employment law. They are entitled to:

• a written statement of employment particular soutlining their job rights and responsibilities
• National Minimum Wage
• paid holiday
• payslips
• protection for whistleblowing
• protection against discrimination
• protection from less favourable treatment for working part time

If they meet the eligibility criteria they are also entitled to:

• Statutory sick pay (SSP)
• Ordinary parental leave
• Shared parental leave and pay
• Maternity, paternity and adoption leave and pay
• Parental bereavement leave and pay
• Time off for dependants
• Time off for public duties
• Redundancy pay if their role becomes redundant provided they have been continuously employed for more than 2 years;*
• Claim unfair dismissal or automatically unfair dismissal;*
• Get the minimum notice period if they're dismissed or made redundant;
• Make statutory flexible working requests;
• Protection against dismissal or suffering any detriment for taking action over a health and safety issue.

*Please note that these guidelines may change following the recent King's Speech July 2024.

Protections Against Employer Detriment for Health and Safety Concerns and Unfair Dismissal Claims

An employer should also not cause an employee a detriment (having their situation made worse or being treated worse than before) because the employee:

• reasonably believes being at work or doing certain tasks would put them in serious and imminent danger
• takes reasonable steps over a health and safety issue, for example complaining about unsafe working conditions
• informs their employer about a health and safety issue in an appropriate way

What are some examples of detriment:

• A reduction in hours;
• Experiencing bullying or harassment;
• Turning down someone's training requests without good reason;
• Being overlooked for promotions or development opportunities.

An employee could bring a claim for automatically unfair dismissal if their employment is terminated on the above basis and do not need to have worked for their employer for 2 years to make the claim.

4 Indicators for Worker Classification Include Flexibility and Work Obligations

An individual is more likely to be classed as a worker if most of the following apply:

• Their work is less structured or they do not have a regular working pattern;
• They are usually required to personally do the work;
• They are not offered regular or guaranteed hours by the employer;
• They have very little obligation to make themselves available for work but should do work they have agreed to.

7 Worker Rights in Employment Law Include Key Protections and Entitlements

Workers have some protection in employment law but not as many rights as employees. They are entitled to:

• A written statement of employment particulars which sets out their job role and responsibilities;
• National Minimum Wage;
• Paid holiday;
• Payslips;
• Protection for whistleblowing;
• Protection against discrimination;
• Protection from less favourable treatment for working part time.

Worker Rights Exclusions and Protections Against Detriment in Employment Law

However, they are not usually entitled to:

• A minimum notice period if their employment is ending;
• Protection against unfair dismissal
• Make statutory flexible working requests
• Time off for dependants
• Statutory redundancy pay

Workers are also not entitled to shared parental leave, parental bereavement leave and maternity, paternity and adoption leave. This is because they can pick and choose when they work and when they take time off work.

Employers must not cause a worker a detriment (having their situation made worse or being treated worse than before) because the worker:

• Reasonably believes being at work or doing certain tasks would put them in serious and imminent danger;
• Takes reasonable steps over a health and safety issue, for example complaining about unsafe working conditions;
• Informs their employer about a health and safety issue in an appropriate way.

If a worker suffers a detriment they can make a claim for suffering a detriment at an Employment Tribunal but they can only recover certain losses.

Identifying Self-Employment vs. Employee Status.

An individual is usually considered to be self employed if they are, effectively, their own boss and have control over what work they do and when. They are usually responsible for their own tax and national insurance contributions and invoice for work they do rather than receiving wages. A self employed contractor can also send someone else to do the work for them. As such, they do not have many employment rights although they have protection against discrimination and protection for their health and safety on a client's premises.

However, sometimes the working relationship is more akin to an employee or worker. Examples include:

• Not being able to choose when or where they work;
• Being told how much holiday they can take and need to get permission to take it;
• They are given instructions on how to do their work;
• Their work equipment is provided;
• They get payslips instead of being paid through invoices.

This can either happen because the employer does not understand employment status or is a deliberate choice so they avoid having to give individuals the legal rights of employees or workers e.g. holiday.

3 Top Tips for Managing Employment Status and Contracts

• Seek legal advice particularly if you are unsure what status the individual is or if you are want to make sure that the individual is legally classed as a self employed contractor;
• Have suitably drafted Agreements or contracts so that the individual knows what their employment status is;
• Take early action if the working relationship moves from one of self employed status to either employee or worker and update the contracts or Agreements accordingly.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.