Lecture 2 Week Beginning 28th January 2019 Barriers to Employment Rights Identifying the Status of Workers Four categories of Workers Employee Statutory workers Self Employed More recently Employee ID: 785114
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Slide1
Business and Employment LawLecture 2Week Beginning 28th January 2019
Barriers to Employment Rights
Slide2Identifying the Status of WorkersFour categories of ‘Workers’EmployeeStatutory workersSelf EmployedMore recently - Employee
Shareholder
Slide3EmployeeS230 Employment Rights Act (ERA) 1996 defines statusBUT the section itself is confusing which is why it is often left to the Court to decide who is and who is not an ‘employee’Why is this important?Only an employee has full employment protection
Slide4IDENTIFYING CONTRACT OF EMPLOYMENT [II]: STATUTORY WORKERS.230 (3) (b) ERA 1996
Any other contract (other than a contract of employment) …whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is
not
….that of
a client or customer of any profession or business undertaking
carried on by the individual
Slide5Implications for WorkersSubordination of the worker created by the desire to change relationship:-Avoid complainingTendency to over work because of a fear of non engagementHigher incidence of work related stressLess job satisfactionLow moraleLess security
Flexibility??
Slide6EmployeeDoes work personally – cannot ‘turn work down’Enjoys additional ‘protection/perks’ – company carEnjoys all statutory rightsTax is paid at source Employer is vicariously liable
Slide7WorkersDoes work personallyOften ‘employed’ on casual basisMay be temporary workersMay be zero hours contractTax is paid at sourceNo security of tenureEmployer is vicariously liable
Slide8EMPLOYEES v. WORKERSEMPLOYEES + WORKERS
EMPLOYEES
ONLY
Equal pay for equal
work
Non discrimination
Right
not to have unauthorised deductions from
pay
S
tatutory
health and safety
rights
Minimum wage
Working
time
regulationsData protection rightsTime off to care for dependantsPart-time workers are protected
R
ight
not to be unfairly
dismissed
R
ight
to redundancy
payment
R
ight
to be given a statement of principal terms and conditions of
employment
Statutory
maternity
pay
Statutory
sick
pay
Security
of employment after maternity
leave
Protection
of the right to belong, or not belong, to a Trade
Union
Time
off rights
Slide9Self EmployedIn business of their own accountAble to make a profit or loss of their ownMore than one clientProtected from discriminationProtected by Health and Safety LegislationMust keep own accounts
Pay for premises/vehicles
Slide10Self Employed ….May also be responsible for others as he may sub contract work outProbably a contract for service but will be liable re:DiscriminationHealth and safetyEtcStringfellow Restaurants Ltd v Nadine Quashie [2012] EWCA
Civ
1735
Slide11EMPLOYEES v. SELF-EMPLOYEDEMPLOYEESSELF-EMPLOYED
Working under a contract
of
service.
Income tax and social security payments deducted by employer.
Vicarious liability of employer.
Extensive duty of care by employer.
Working under a contract
for
services.
Responsible for paying income tax and social security contributions.
No vicarious liability of employment.
Limited duty of care by employer.
Slide12Employee ShareholdersS31 Growth and Enterprise Act 2013 inserts s205A into the ERA 1996Employee, in return for (minimum of £2000) shares in the business now able to contract out of some employment protection:- gives up the right toRequest study or training leaveFlexible working
Not to be unfairly dismissed
Redundancy payment
Increased notice of intention to return from adoption or maternity leave
Slide13Employee/ShareholderS31 Growth & Enterprise Act 2013Allows employees to opt out of unfair dismissal protection – minimum £2,000 sharesOpt out of redundancy protectionDoes this defeat the intentions of the ERA?What is the true intention of the employer?
Slide14Problems with s230 ERA 1996As is evident, courts are often left to decide who is and who is not an employee. Over the years they have developed ‘tests’ to help them Control test – now rather outdatedIntegration Test – also less relevant but still usefulMixed and Multiple test – pulls the other areas together and is generally used today alongsideEconomic Reality Test – what is actually happening in the business – what is the
‘intention’
of the parties?
Slide15Control TestHow much control does the employer have over the work of the employee? Flexible working/skilled workers – Bramwell LJ – Yewens v Noakes
(1880) ‘A servant is a person subject to the command of his master as to the manner in which he shall do his work’
How realistic is this in 21
st
Century? Does a football manager tell his player
how
to play football or does he rely on the footballer’s skill?
Slide16Integration of Organisational TestIntegration is a useful test for professional people however,The test is only really useful for permanent or core workers when in fact even outsourced work might be integral to the employer's business.
Slide17Mixed/Multiple Test Ready Mixed Concrete SE Ltd v Minister of Pensions [1968] 2 QB 497Mackenna J:”A contract of service exists if three conditions are fulfilled”
Slide18Ready Mix ConcreteThomas Latimer worked for RMC from 1959 to 1963.He took up an opportunity to start to drive lorries on behalf of the company – RMC set up a hire purchase to allow employees to buy their own lorry.His new contract described him as an independent contractor even though he wore company uniform and painted the lorry with company markings.
Slide19Three conditionsThe servant agrees that, in consideration of a wage ...he will provide his own work and skill in the performance of some service for his masterHe agrees expressly or impliedly... He will be subject to the other’s control The other provisions of the contract are consistent with its being a contract of service
Slide20Factors the Court will examine will include:Provision of equipment or toolsAbility to work for other people/companiesAbility to control eg does the worker determine when to take holidays or does he need permissionWho markets the work done.
In RMC – they were small business men, able to make a profit or loss of their own
Slide21What is happening in the Firm?Is there:- Mutuality of ObligationsDoes the individual provide personal service or is he able to substitute his labour?What is actually happening in the firm – what is the intention of the parties, what is the Economic Reality?
Slide22Other Cases to ConsiderMarket Investigations v Minister for Social Security (1969) 2 QB 173O’Kelly v Trusthouse Forte Ltd (1983) ICR 728
Carmichael v National Power plc (2000) IRLR 43
Lee v Chung and Shun
Shing
(1990) IRLR 236
The Economic Reality Test
Slide23Status as a Strategic Management ToolAssociated with Risk:An employer will choose the most appropriate “employment” contract to suit the needs of the firm Consider the function of the worker, its importance, the risk to the business if done less well, how easily staff-turn-over can be managed.Core workers – employees
Non core/low skilled - workers
Slide24Strategic Management ToolThe Employer will structure his business according to his needs.He may use core workers, zero hours contract workers, self employed.He may also use the device of probation periods
Slide25Agency WorkersAgency WorkersGaining rights in line with employeesSome rights gained from day oneRights to facilities and
amenities
Right to be informed of vacancies
Slide26Agency WorkersSome rights acquired after 12 WeeksSame basic pay as if they were permanentSame holiday entitlementSame bonus and commission - but only if paid on a personal basis – eg not profit schemesPaid time off for ante natal care