November 27, 2014

Who do you employ?

The status of workers and whether or not they should be categorised as employees is one of the most difficult questions in employment law.

This is underlined by the recent case of Quashie v Stringfellows Restaurants Ltd.  In this case the Employment Tribunal found that Ms Quashie was not an employee, the Employment Appeal Tribunal decided that she was and finally the Court of Appeal decided that she was not.

The situation is not helped by parliament providing broadly similar definitions of a “worker” in respect of the Equality Act, the Working Time Regulations and protected disclosures and a somewhat different definition of “employee” in relation to unfair dismissals.

One thing every employer needs to be clear about is that in defining whether any individual is an employee or a worker the tax status of the individual is not a relevant consideration and not being PAYE does not mean an individual is not an employee.
The current approach of the courts is set out in the Supreme Court case of Autoclenz Ltd v Belcher and Others [2011] IRLR 820.

Autoclenz provided hand car washes and Belcher and the other claimants were the car washers. They were ostensibly self employed and one piece of factual evidence that was heard was that HMRC had conducted an inspection and had pronounced themselves satisfied that the Claimants were self employed.

The Supreme Court said that it was for an Employment Tribunal to consider whether or not a contract represented the true intentions of the parties and must examine all relevant evidence including the written terms, read in the context of the whole agreement and should also consider how the parties conducted themselves in practice and what their expectations of each other were. The Claimants were found to be both “workers” and “employees”.

This summer the Supreme Court has stretched the definition of a “worker” even further. In the case of Clyde and Co LLP &Another v Bates Van Winkelhof. Bates was an equity partner in Clyde and Co LLP, a firm of solicitors, she made a protected disclosure suffered a detriment as a result and brought a claim in the Employment Tribunal.

The Supreme Court held that she was a “worker” and as such could bring a claim for protected disclosure but further as a “worker” she would also be able to bring discrimination claims under the Equality Act or claims under the Working Time Regulations. They did specifically find that she was not an “employee” so would not be able to bring an unfair dismissal claim.

If, as an employer, you are unsure about the status of those working for you you should take advice at an early opportunity and certainly before you take any action that might lead to a tribunal claim.

If you need advice on this subject, contact us and we’ll be happy to help.

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