Partly (one suspects) in response to such cases, the Government has now announced a wide ranging review of the status of workers. The aim of the review is to ascertain whether the current framework is clear, whether there are any options to extend employment rights to more people and to streamline the various rules and qualifications that apply, so that all parties are clear at the time of recruitment what rights are available. The range of status will be analysed including employee, worker and self-employed status and interim findings and recommendations following the review are expected by March 2015.
The Government's press release can be viewed here.
The status of individuals who are engaged to perform individual assignments under an umbrella contract has been a particular area of focus for the Employment Appeal Tribunal (EAT). In recent weeks, there have been several cases in which the EAT has considered worker status, in particular examining mutuality of obligation within the context of umbrella contracts.
Mutuality of obligation is the obligation to offer and to accept work and is an essential element for an individual to fall within the category of a worker. Whilst such cases are often fact specific, the EAT has provided some useful guidance. In particular, in one case concerning a self-employed labourer who had changed status from employee to sub-contractor in return for a payment, the EAT found that although there was no requirement for the company to offer work or for the sub-contractor to accept it, there was mutuality of obligation during each assignment or period of work that the individual undertook to establish worker status and entitlement to holiday pay. Therefore, where an engagement of a self-employed contractor consists of a series of short individual assignments, there is no requirement for the individual to establish mutuality of obligation between assignments to be held to be a worker.
A second case provides useful guidance when considering whether an individual is protected under the Equality Act 2010. That particular case concerned two interpreters who successfully argued that they were workers rather than self-employed contractors and could therefore bring claims of discrimination under the Equality Act. The EAT found that the lack of mutuality of obligation between their assignments was irrelevant to determine whether the interpreters were "employed" for the purposes of the Equality Act.
If you require any advice on an individual's employment, worker or self-employed status, please contact any member of our team who will be happy to assist.