Whether individuals are self-employed, company employees or workers depends on a number of factors and the true nature of their relationship with a company. The exact nature of that relationship will determine what rights the individuals have and what a company’s obligations to them may be.
It is often thought that the determining factor in considering whether individuals are employees will be the documentation which surrounds that relationship. The existence, or indeed absence, of a written contract is helpful in determining whether the individuals are employed, self-employed or workers. Even if there is written documentation, the existence of a contract itself, whilst helpful, is not absolutely determinative in assessing whether individuals are self-employed.
Other factors must also be considered including the element of control over the nature of the work carried on by the individuals, e.g. when the work is carried on; whether the company has an obligation to actually provide them with work and if so, whether they have a mutual obligation to undertake the work on the company’s behalf and is there a sanction if work is refused. Also, one should consider if they or the company assume any risk for the business; how they are paid; whether these individuals are integrated into the operation of the company and also, if the company provides them with tools to carry out the job they undertake for it.
The recent decision of Uber in England may prompt an individual’s query about their “employment” rights. Everyone will be aware of the taxi firm which operates through an App which allows for booking private hire taxis, also operating in Northern Ireland. It’s likely that in determining whether an individual is self-employed, employed or a worker, a tribunal may be influenced by this recent decision. In addition to many factors to be examined in determining whether individuals are self-employed or indeed, the company’s employees, or workers, one should examine how the company’s relationship with them actually operates in practice, rather than any particular name given to it. In the Uber case, the Judge held that the Claimants, as taxi drivers, were not employed by Uber but rather were workers. The notion of a “worker” is an intermediate status between someone who is genuinely self-employed providing services and someone who is directly employed by a company. A worker does however have certain rights, including the right to receive the national minimum wage, the right to paid leave, maximum working week and the right not to be discriminated against on protected grounds. A worker does not have unfair dismissal or redundancy rights. It could be that the individuals providing services are workers with such rights rather than employees.
I suggest it is necessary to examine all the elements of the relationship a company has with individuals who provide services to it on a casual basis. It could be they fall into one of 3 categories- self-employed; directly employed by the company which allows them full employment rights and protection or workers. The company should review particularly how the people were recruited, how work is allocated to them and managed, what control is exercised over the individuals and how payment is made to them. This is a fact specific, complex area and usually, not with a ready answer without a full examination of all matters surrounding the working relationship with individuals.
While great care has been taken in the preparation of the content of this article, it does not purport to be a comprehensive statement of the relevant law and full professional advice should be taken before any action is taken in reliance on any item covered.
