Assessing Worker Status
Uber’s recent case recently demonstrated the importance of assessing worker status. As you may already know the Supreme Court dismissed Uber London’s appeal against an earlier ruling. That earlier ruling was about assessing worker status.
The case was bought by a number of Uber drivers taking Uber London to court. This was due to the fact that they
felt they were being misrepresented. Also because there was no clear indication of their actual status.
The Supreme Court has made the decision that Uber drivers are classified as “workers”. Meaning they are not independent contractors which Uber London previously had their workers believe.
What does this mean for businesses?
So the question now is, what exactly does it mean to be a “worker” or an independent contractor? Or even an employee for that matter?
Do you or your organisation fully understand what is meant by employment designations? Do you understand the serious impact if there is not complete transparency?
Let us take a closer look at it all.
Employment Designations and what they mean
In the UK there are three main designations:
Employee
Worker and self-employed, or
Freelance independent contractor.
Below we give a more in-depth definition of each and what the differences are:
WORKER
You are generally classed as a ‘worker‘ if: you have a contract or other arrangement to do work or services personally for a reward. The contract doesn’t have to be written, but it is advisable. The reward is for money or a benefit in kind. For example; the promise of a contract or future work.
Employment Rights for a Worker:
- Minimum wage
- Protection against unlawful deductions
- Statutory Paid Holiday
- Work no more than 48 hours per week (there are some situations you can opt out but it requires careful consideration and advice).
- Protection against discrimination
EMPLOYEE
You are an employee if you are hired by an employer to do a specific job. An offer of employment is accepted by you. You are also given details of your duties and expectations. Also, your hours of work and salary to be paid are set by the employer.
Employment Rights of an Employee:
All the same as a WORKER and:
- Statutory Sick Pay
- Maternity, paternity, adoption and shared parental leave
- Protection against unfair dismissal
- Time off for emergencies and,
- Statutory redundancy pay
SELF-EMPLOYED
You are self-employed or a freelance contractor if you own your business. You are therefore responsible for everything in your personal capacity.
Employment Rights of a self-employed individual:
Employment law doesn’t cover self-employed people. In most cases because they are their own boss. However, they do have protection of their health and safety as well as against discrimination.
The exact terms and conditions will be set out in their contract. Should you need any advice or assistance on drafting or reviewing a contract please do get in touch.
Are you compliant when it comes to the people who work for you?
If anything, the Uber case has brought to the forefront many questions. There are many businesses that are quite possibly in a similar situation. They may genuinely not be aware of what designation the people doing work for them actually fall under.
The above definitions should give you better insight. Alternatively, you can contact us. Or you can always take a look at the UK Government website. Their website details the rights but also gives some more detail.
In the Uber case, the Supreme Court did focus a lot on factors such as the minimum wage, sick leave as well as being available but not being paid. In particular, an Uber driver could log onto the app and be available. However, still not have any customers for an extended period of time.
The drivers were not happy with the ruling. They feel they should get paid if they are not actually driving. However, we believe this is a very blurry line and may need to be addressed further at some point.
IR35 and how it works
IR35 will imminently come into force in its new form. It is important to know that it is not the first time that this has come about. The amendments were due to come into force last year, but because of COVID, it was pushed back. Prior to last year, IR35 was already in existence – just in a different form.
IR35 governs Freelancers, Service Providers and Contractors within the private sector who are not on the payroll. It takes into consideration the control exerted over the person doing the work. Another key consideration is whether the freelancer can be substituted.
Assessing Worker Status and how we can help
If you would like to have a more in-depth understanding of IR35 and how it is linked to worker status, you can read more about it here
Don’t forget that K&K Consulting is able to assist with all things compliance related, legal considerations, legal drafting and much more. If you need an expert’s view regarding worker status or regarding business advice generally please do get in touch.