For many years, when considering the question of someone’s employment status, judges would give the example that a chauffeur was an employee and a taxi driver was self-employed. These days, things are no longer that simple. Many of us have followed the recent discussions in the newspapers about Uber drivers and their battle in the courts to obtain “worker” status, as opposed to being deemed self-employed contractors (with minimal legal rights).
In February, the Supreme Court handed down its judgment on this important topic. The Court held that the drivers were indeed workers, and indeed it was the case that they were working not only whilst transporting their clients but from the moment they switch on their app to say that they are available for hire until they turn it off, either at the end of their shift or whenever they take a break.
A consequence of the judgment is that, as workers, the drivers have been underpaid and Uber has failed to honour its legal obligations to them.
What is a ‘worker’?
A “worker” is a broad term, for example some workers are employees and some are self-employed for tax purposes. All workers are entitled to some (but not all) of the rights of employees (unless they are employees). One of those rights is to be paid a minimum wage for the hours worked. Another is the right to paid holiday. These do not apply to the genuinely self-employed. As a decision that seeks to protect the powerless from exploitation by the powerful, there is much in the judgment to commend from a biblical point of view (James 4:5).
What is the impact of the judgment?
The Court decision also established a fundamental shift in how the question of employment status should be approached. It should not be a question of whether the contract matches what happens in practice. Essentially the contract is ignored. Instead you consider the nature of the relationship (for example the level of control exercised over the individual by the organisation) and consider whether that means the individual is the sort of person Parliament intended to protect in this way.
The decision means that people providing their services previously thought to be doing so on a self-employed basis may be more likely to now be deemed “workers”, entitled to minimum wage and holiday (and certain other rights).
What does this mean for your organisation?
If your organisation has people providing services on a “self-employed” basis, in particular where they have no right to send a substitute (as was the case with the Uber drivers), it is important to review this to make sure they are genuinely self-employed and you are not failing to honour your legal obligations. We can help you with this. For more information on what it means to be a worker, see our articles here: The Good Work Plan – will it impact us? and When it comes to employment law, status does matter!
We have a Worker Pack available for purchase for those organisations who want to engage a worker and need the correct templates for doing so. Since April 2020 it has been a legal requirement to give a worker a statement of terms on their first day of work with you. This template is included within our Worker Pack.
Please get in touch with our Employment Team if you would like to discuss any of this in more detail.