The foundation of employment rights revolve around employment status, however, it can be difficult to determine the correct status for many reasons.
Employees generally work under a contract of employment and will have various rights such as maternity leave, statutory redundancy pay, and the right to claim unfair dismissal and so on. Whereas a self-employed person will work under a contract for service and will not have these rights but may have protection on the grounds of discrimination.
There are instances where a worker employed under a contract for services will be deemed by the courts to be an employee and therefore afforded statutory protection.
So how do I know what status the individuals in my organisation have?
The Courts and Tribunals will look at several factors with a view to determining whether a worker is, in fact, an employee all of which focus on the degree of mutuality of obligations. The greater the degree of mutuality of obligation the greater the likelihood that they will be deemed to be an employee. The Courts and Tribunals look behind labels and contracts and instead look towards the reality of the situation.
Most employers will only become aware when they face an issue for example when making redundancies. However, it is advisable to review your practices and ensure that you are not exposing yourself to unnecessary risk.
Ask yourself some helpful questions to determine status like:
• Is he/she in business on their own account?
• Is he/she under the employers’ control?
• Does he/she provide tools/equipment?
• Is there a sharing of profits and losses?
• Does he/she carry their own insurance?
• Does he/she have a degree of risk?
• Is there agreement as to status?
• Is he/she integral to the organisation?
• Does he/she get paid sick pay or holiday pay?
For any further information please call our 24-hour advice service on 0844 892 2786.