#15478 - Definition Of Employee - Employment Law

Definition of "employee"

Sources of employment law:

• Common law (contract & tort)

• Domestic legislation

• EU legislation and case law

Tribunals have taken an instinctive approach.

Independent contractors = no employment law protection

• A contract for services —> self-employed.

  • Maximum flexibility, personal performance not required, not subject to overt control, has to bear some degree of financial risk.

• Employees: contract of service —> employee. (NB. employee shareholders)

  • Section 230(1) ERA 1996: employee is an individual who has entered into, or works under a contract of employment.

• Ready Mixed Concrete: paid, agreed to carry out work personally, employer must exercise at least some control.

• Courts will look at the substance and not the form of the contract. Tests:

  1. the mutuality of obligation test;

     • Employer under duty to provide work and individual under duty to perform work personally. If individual can send a substitute this may negate mutuality, although not if the right to substitute is fettered in any way or right never actually exercised.

     • Consider what actually happened in reality (Autoclenz Ltd)

  2. the control test;

     • Control over; who works, when they work, how they work, what work is done, where the work is done?

  3. the integration test; and

     • Integration into the workplace. Accessory or fully integrated?

Do they take part in administrative duties, management decisions, or other duties not consistent with that of an independent contractor.

Uniform? Holiday/sick pay? Grievance procedure?

4. the economic reality/multiple test.

   • Overall picture taking into account all aspects of working activity - Hall v Lorimer

   • Factors: financial risk, how individual is paid, is individual able to work for others, how individual taxed, who provides material & equipment?

Workers: “All employees are also workers, but not all workers are employees.” = some protection

• Section 230(3) ERA 1996: worker is an individual who has entered into or works under (or where the employment has ceased, worked under):

  • a contract of employment; or

  • any other contract, whether express or implied, oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer.

• Benefit from anti-discrimination provisions.

• Cannot claim unfair dismissal

James v Greenwich London Borough Council : unless the paperwork governing the relationship is unclear as to the individual’s status, the Employment Tribunal should not seek to find an employment relationship. Must be necessary to imply employment contract. (affirmed in Alstom Transport v Tilson & Smith v Carillion).

Agency Workers Regulations 2010

• Regulations 12 and 13, from the first day of an assignment, an agency worker must be able to access a hirer’s collective facilities and amenities.

• Regulation 5, after completion of a 12-week qualifying period with the same hirer, an agency worker will be entitled to the same rights to pay, benefits, rest periods and holidays as comparable employees.

• Regulations 17 and 18 set out the claims that an agency worker can bring (bring within 3 months of infringement).

Zero hours contracts

• Important to examine the relationship between employer and employee

Small Business, Enterprise and Employment Act 2015

• Makes exclusivity clauses in zero hours contracts (s. 153)

• s. 27A(3) ERA 1996 provides that any provision of a zero hours contract is unenforceable against a worker if it prohibits the worker from:

  • Doing work under another contract/arrangement; or

  • Doing so without employer's consent

• Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015

  • Workers and employees on zero hour contracts will be entitled to bring a claim for detriment, and an employee will be entitled to bring a claim for automatic unfair dismissal (need not show qualifying period of employment).

ss.1-7B ERA 1996

• Employees must be provided with written particulars of employment within the first two months of employment (particulars in s.1 ERA 1996).

  • s.1(2) ERA 1996: can give statement in instalments.

  • Contract of employment/letter if engagement will suffice - s.7A

  • Provide (s.2(4)):

    • name of employer and employee;

    • date employment commenced;

    • date when continuous employment began;

    • scale, rate and method of calculating pay;

    • intervals at which remuneration is paid;

    • terms and conditions relating to hours of work;

    • entitlement to holidays, including public holidays and holiday pay;

    • job title or brief description of duties; and

    • expected place of work.

  • For information on pension provision and sick pay policy employee can be referred to another document (s.2(2))

  • Notice periods may be dealt with in a collective agreement entered into on the employee’s behalf by his union and the employer, by reference to the law applicable to notice periods (s.2(3) and s.86).

• Statement must include (s. 3(1)):

  • a note specifying any disciplinary rules or referring to a readily accessible document setting out such rules;

  • a note specifying a person to whom the employee can apply for the purpose of raising a grievance.

• No requirement to provide written particulars to employees whose employment continues for less than one month.

  • Employer must provide the employee with a written statement of material changes within one month of the change. (s.4 )

• Employee can apply to the Employment Tribunal (within three months of the termination of employment) pursuant to s.11 ERA 1996.

• Tribunal can (s.12):

  1. Confirm particulars

  2. Amend particulars

  3. Substitute other particulars

• If the written particulars are deficient, compensation of between 2-4 weeks’ pay may also be awarded.

  • Compensation is dependant on another claim - s.38 EA 2002

ss.1 to 7 do not apply to an employee if his employment continues for less than one month (s.198 ERA 1996)