The UK has a significant amount of employment, health and safety and other legislation that applies to people performing tasks in the workplace. However, in order to ascertain what law(s) apply and to whom, it is necessary to establish the correct employment status of the people involved – whether they are employees, workers or self-employed. These distinctions are important because each category of worker has different rights and levels of protection in the workplace.
With the rise of flexible and home-based working these classifications can sometimes become blurred. Employers should be aware of their duties in respect of each of these classifications in order to ensure that their responsibilities to workers of all types are met and to minimise the risk of contractual claims or claims for damages being made against them.
A self-employed person is ‘in business’ for themselves. They accept the risk of their own conduct and only have very limited rights, such as those provided under the Human Rights Act and some trade union rights, if applicable. As regards health and safety law, a self-employed person, which includes contractors, has a duty to assess the risks in the workplace both to themselves and to others.
Employees have a contract of employment with their employers and there are mutual obligations that exist between the employer and employee. Employers control the work that the employee does and stipulate when, where and how that work is to be carried out. The employer assumes the financial risks, and is responsible for paying the employee’s Income Tax (IT) and National Insurance Contributions (NIC). Those with employee status benefit from the full range of employment rights, which includes protection from unfair dismissal and redundancy as well as full maternity and paternity rights.
Whilst there is a clear distinction between employees and the self-employed, ‘workers’ fall between these two classifications. A worker is employed by an agency and contracts with another business to provide work services. The agency pays the worker’s IT and NICs.
Agency workers provide work services according to the terms of their contract with the agency. This contract does not have to be in writing: it may be express, implied or oral. In terms of health and safety, discrimination and other statutory rights, agency workers have exactly the same rights as employees. For example, if they work six hours or more in one stretch, they are legally entitled to rest breaks in the same way as other staff members.
Workers are also entitled to holiday pay and to be paid the National Minimum Wage. They have the right to be accompanied at disciplinary and grievance procedures and are protected from unlawful deduction from wages. Part-time workers are protected from being treated less favourably than a comparable full time worker by virtue of the Part-time Workers (Prevention of Less Favourable Treatment) Regulations.
It is very important for employers to fully understand their obligations in respect of the temporary and permanent staff who work for them. We can advise you if you have any questions regarding the exact employment status of your staff.