Employment status is the subject of much debate. An individual’s legal rights vary significantly depending on whether they are an employee, worker or self-employed and often the lines between the three are blurred.

There have been a number of cases recently making their way through the Employment Tribunal and into the appeal Courts on this matter. As such there has never been a better time to review employment contracts and other engagement documentation.

One important case is that of Pimlico Plumbers v Smith. Mr Smith worked for Pimlico since 2005. As a result of a heart attack in 2011 he requested that his hours be reduced from 5 days a week to 3 days. Pimlico refused his request and terminated his contract. Mr Smith brought various claims in the Employment Tribunal including those only for employees such as unfair dismissal in addition to claims for all workers such as holiday pay and discrimination.

Pimlico considered Mr Smith to be self employed and so not entitled to bring any such claims. The Court of Appeal stated that a proper assessment of Mr Smith’s employment status involves scrutinising his ability to delegate his job. It was found that Mr Smith had undertaken to provide his services personally to the company, although he was allowed to ask another plumber engaged by Pimlico to attend a job, should he fall ill. Mr Smith did not have the unfettered right to send anyone of his choosing in his place without prior consent of Pimlico. The Court of Appeal decided that personal service by Mr Smith was required and therefore found that Mr Smith had the status of a worker.

It is important to note that what parties may have agreed regarding employment status is not always binding. This is because the question of status is a mixed one of law and fact (Young and Woods v West).

The rise of the ‘gig’ economy (sometimes called the platform economy) is causing issues with traditional employment status. 40,000 Uber drivers recently brought claims against Uber for unlawful deductions from wages, claiming that Uber failed to pay them National Minimum Wage. Uber’s position was that it’s App merely facilitated self-employed drivers to seek out and enter into a contract directly with an individual customer.

Uber lost in the Employment Tribunal which held that their drivers were workers as Uber exercised significant control over them, including conducting interviews and limiting the amount of customer information they received. The drivers were classed as workers when the App was turned on, they were in the territory in which they worked and they were willing to accept fares.

The Employment Tribunal once again considered the status of an individual working for City Sprint, a cycle courier firm and decided that even though the individual signed documents confirming she was self employed, she was actually a worker as she provided personal services to City Sprint. In reality her role could not be substituted. (Dewhurst v City Sprint UK Limited)

Given the increase in disputes over employment status and the Employment Tribunal’s reluctance to rely on written contracts or policies as evidence of employment status, now is the perfect opportunity to review your policies, contracts and relevant documentation to ensure that they reflect what is actually happening ‘on the ground’ as if a ‘self employed’ individual is held to be a worker, then that person will be entitled to a raft of rights including the right to be paid the national minimum wage, the right to holiday pay and the right not to be discriminated against.

Brexit and Employment Law

Once negotiations are complete and a Brexit deal has been reached, pre-Brexit decisions in the European Court of Justice (ECJ) will potentially remain in force, unless they are specifically repealed by subsequent legislation. Any decisions in the ECJ post Brexit will likely have persuasive value only. Post-Brexit, the UK Supreme Court will be our final appeal Court rather than the ECJ.

It is expected that a ‘great repeal’ bill will be enacted, repealing all EU laws but likely immediately re-enacting them to ensure stability. Many of the UK’s employment laws are either derived from the UK or are gold plated in any event, such as Maternity Pay, Unfair Dismissal and National Living Wage. Significant changes to these laws are unlikely.

Employment rights that are derived from the EU and are therefore at risk of change are rights relating to hours of work, agency workers and protecting contractual arrangements when business ownership is transferred.

It remains to be seen what the precise nature of the Brexit deal will be. Only once this has been finalised can the full impact of Brexit on the UK’s employment law will be assessed.

For help or advice, please contact Lupton Fawcett Director, Joan Pettingill, on 0114 228 3252 or joan.pettingill@luptonfawcett.law

Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.

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