Employment status in the contract may not reflect the law

Challenging employment status & rights

When it comes to employment rights there are different levels available depending on an individual’s employment status.

There are three types of employment status:

• Employees
• Workers
• Self-employed

The distinction between the classes of individual is significant and the greatest level of protection is afforded to employees particularly those relating to rights on termination. Workers are however also covered by important protections including but not limited to; working time and the minimum wage.

Self-employed individuals have the least protection when it comes to employment rights and employers will not usually jump at the chance to correct an individual who believes they are self-employed. This could either be because they do not understand employment status themselves or because they wish to exercise greater control over the work the individual does and to avoid the basic rights afforded to workers and employees.

Whilst an individual may have been told they are self-employed, and contracts may state the same, if the reality of the working relationship is more that of an employee or a worker there will be rights available to them.

If there is a challenge as to the status an individual holds, there are various tests that have been developed through case law to assist in determining this.

A Tribunal in determining employment status will consider not only the paperwork or contractual documents but will look at the reality of the situation.

They will consider things such as;

• Can the individual choose when or where they work
• Is there a contract for guaranteed hours
• Is the individual required to personally perform the work or services or can they send a substitute
• Does the individual wear the employers uniform or drive the employers vehicles when carrying out the work
• Is there an obligation to provide work and is there an obligation on the individual to accept the work offered
• Is the individual told how much holiday to take and do they need permission to take it
• Does the individual get paid via invoices or via regular payslips

Whilst the criteria set out in developing case law can provide some assistance in determining employment status, it is usually that each case is decided on its facts.

Implications of the “gig economy” on employment status

As the gig economy becomes more and more common in today’s society and individuals are engaged on a flexible and ad hoc basis, it can be a problem in identifying employment status and in turn individual rights.

Whilst those in the gig economy may be classified as self-employed, case law is developing and through cases like Aslam v Uber it can be seen that individuals have been misclassified by the hiring organisation.

Unfortunately, it is often only when the issue comes before an Employment Tribunal that the reality of employment status is truly put to the test.

Recent case law

In the recent case of Maritime & Coastguard Agency v Groom, Mr Groom was dismissed by the Agency and sought to challenge the decision alleging that he was a worker and had the right to be accompanied at his disciplinary hearing. The agency defended the claim on the basis that Mr Groom was a volunteer and was therefore not entitled to be accompanied.

Whilst the written documents setting out the relationship suggested that Mr Groom was a volunteer and that there was no mutuality of obligation, this did not override the factual reality of the situation. The Court of Appeal held that a contract came into effect every time Mr Groom undertook an activity with promised payment with the arrangement demonstrating a wage/work bargain.

It was further held that there was a mutuality of obligation when activities were undertaken for payment and that Mr Groom had to comply with reasonable instructions during the activity.

To conclude

The complexity of case law can make assessing the various levels of employment status confusing and difficult to resolve. Our team are able to assist both employers and individuals with a range of employment law enquiries and HR support.

If you would like any support in understanding your employment status and whether you have the ability to challenge your employer in the Employment Tribunal, or if you are an organisation that is unclear of your obligations, please contact us on 01983 897003.

You can read the full judgement here: https://www.judiciary.uk/live-hearings/groom-respondent-v-maritime-coastguard-agency-appellant/