Business Law: A good time to review employment status, says Andrew West
- Credit: Gotelee Solicitors
If you haven’t made a New Year’s resolution, why not decide to carry out an employment status review?
The Government website lists six different employment statuses, and the Taylor Report has recommended adding a
seventh – that of the “dependent contractor”, to reflect working arrangements that are coming to the fore in the “Gig Economy”.
Two recent high profile legal cases have added to the uncertainty over employment status. Ride-hailing app owner Uber lost its appeal at a London tribunal which concluded that the company’s drivers were in fact “workers” and entitled to both the National Minimum Wage and holiday pay. By contrast, delivery company Deliveroo won its case that its riders were “self-employed contractors” and so not entitled to those particular benefits.
The difference between the two rested both on the level of control the organisations exerted over working patterns and the presence or absence of permitted sub-contracting. Uber’s drivers appeared to have little autonomy to determine the manner in which their services were performed and no chance at all to dictate terms. Furthermore, Uber’s drivers were not allowed to allocate a substitute driver to do the work for them, whilst Deliveroo’s people had that option.
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You need to be clear about the status of those undertaking work for you. This relationship needs to be accurately reflected in any contract between your business and the people who work for you. You also need to make sure the contractual documentation accurately reflects the practical day-to-day working arrangements.
The original tribunal that looked at Uber’s case disregarded the written contracts and looked instead at the practical reality of the working relationship, which was inconsistent with the label of “self-employment” on the contractual documents.
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The cost of getting it wrong can be very steep, especially if you’ve not provided for holiday pay, of if the working arrangements mean that you’ve not paid the minimum wage, based on hours actually worked.
•Andrew West is an employment law specialist at Gotelee Solicitors, which has offices in Ipswich, Hadleigh, Felixstowe, Woodbridge and Melton. For advice on how to ensure a safe and secure workplace with clear policies and training for staff, email firstname.lastname@example.org or call Gotelee Solicitors on 01473 298126. For further details, visit www.gotelee.co.uk.