In Brief: September 2018
A good gig?
Most people only encounter the law when they have a dispute like at work or a divorce. You are generally led by your advisor or representative and it’s always reluctant involvement, even buying or selling a house is a reluctant activity as far as engaging solicitors is concerned.
As an aside, though most people reluctantly engage in any legal process we do so every day, for example when we buy a ticket for a train there is a contract between the parties. Even buying a pint of milk establishes a contract, the price is sought and agreed, and then money changes hands to seal the deal. There is an implied agreement that the milk is not sour. With a train ticket there is an implied agreement that you will be taken from point A to point B and safely, but there is no promise of being able to sit, unless stated, and no promise of punctuality though separate rules apply to be compensated if they fail to provide the train you were told would be available.
We accept the fact that a child evolves from being unable to speak to speaking, maybe several languages and maybe achieving far more, like becoming a musician. Some say an expert is just someone who has made more mistakes than anyone else, and so there we have the same principles for everyday law. It is continuously evolving to meet the needs of the people. It is the reason why we no longer stone people to death for placing crops of two different types together in a field, or hang draw and quarter people. In my humble opinion, the more civilised we become the more we have laws that protect individuals and looking back we see how that protection has evolved over time.
As a case in point, employment law has evolved massively over the years from when it was barely in existence. Prior to gods knows when, we didn’t have weekends or breaks from work. The first Factories Act established rest periods and the UK’s leisure industry was born. The evolution of this very practical section of law has mostly been a reaction to poor practices and attempting to close the gaps that unscrupulous employers slip through. If employers were the best they could be, employment law and Unions would have no reason to exist.
For instance, failure to provide a contract (or it’s more formal title ‘a written statement of employment particulars’) can lead to 2 or 4 weeks salary paid to an employee. That didn’t come about because someone had an idea that it would be a nice law, it came about because of the numbers of people without contracts. The law makers realised it wasn’t sufficient to just say ‘people would have contracts’ it was necessary to have a penalty if they failed to comply. Much like parking restrictions, simply saying ‘no parking’ would not deter people. Saying ‘no parking or £50 fine’ deters most people.
These ‘evolving law’ principles have never been more in the spotlight than with the recent zero hours contracts and gig economy ‘workers’.
A person can be an employee, a worker or self-employed. Sounds simple enough, or so you would think.
First we need to look at the various elements of ‘employment status’. Although each case is decided on its own merits, there are some essential elements that must be satisfied for someone to be defined as an ‘employee’
- The individual has to have a contract with the employer
- The individual has to carry out the work personally
- There has to be “mutuality of obligation” between the two parties
- The employer has to have “control” over the work that the employee does
A ‘Worker’ is defined as someone who works under a contract of employment or “any other contract, whether express or implied…whereby the individual undertakes to do or perform personally any work or services for another party to the contract”.
A self-employed person is just that, they work for themselves though some employers still hire people on a ‘self-employed basis’. I did once have an enquiry for a man who was genuinely self-employed and wanted holiday pay. I stopped short of saying “stand in front of a mirror and ask for time off”.
A zero-hours contract is a type of contract between an employer and a worker, not an employee, where the employer is not obliged to provide any minimum working hours, while the worker is not obliged to accept any work offered.
For some employers having ‘workers’ rather than ‘employees’ fits their needs. They can employ only when needed and the worker is under no obligation to accept the work and will not be penalised if they refuse. It works for busy periods in hotels or restaurants, but most of the time you will find that a person is employed on a zero hours contract but has regularly worked 35 hours a week for the last 5 years. At this present time the law says ‘not an employee’ but as argued above, the law evolves to fit need or to correct a bad practice.
The gig economy: This is a relatively new term. You work ‘when you get a gig’ is the origins of it. Basically zero hours and no obligation to provide more. It has been a very slow drip, drip process of change, occurring initially with Uber where their staff, said to be ‘self-employed by Uber have instead been classified as ‘workers’.
The question arises ‘why have this complex set of statuses or contracts?’. The simple answer is the evolution of employment law. At some point someone challenged their status and said ‘I am not self-employed, I am an employee’ and the law recognised the need to protect people in this position. The 1996 Employment Rights Act established this type of status and so provided protection from being treated unfairly.
In the main the law has reacted to another attempt to circumvent employees’ rights and corrected it. This is then the evolution of worker statuses. I fancy that one day zero hours contracts will not be allowed to circumvent the spirit of the law with regards to these people. I have a guess that a judgement will be made that if you work 35 hours for more than 2 years then your status changes to that of an employee.
For the employers they will probably discover that attempting to avoid their legal responsibilities is far more expensive than not doing so.
Consider the positon where we are all self-employed but working for a company. No holiday pay, no right to minimum wage, no right to notice pay, Maternity leave, parental leave, and no protection against unfair dismissal. This then is what lies behind any employer’s attempt to classify staff as ‘self-employed’ or even as ‘workers’ rather than an employee, and it is why the law protects people from having that status imposed on them.
Patrick McNamee is a legal adviser at Hadfield Bull & Bull.
Please contact 0208 301 0808 or email firstname.lastname@example.org to discuss any employment related matters with Patrick.