InsightsClient Story - Employment & HR - POSTED: January 16 2017
Do your business’s employment documents reflect the reality of the situation?
How important is it get the documentation and employment status right.
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This was the question asked in the recent case involving the Citysprint cycle courier.
The company went to great lengths to show that those working for them were self-employed contractors. These lengths included staff being presented with a ‘confirmation of tender to supply courier services’ during the recruitment process. Staff were required to electronically acknowledge the key terms including:
- that Citysprint were under no obligation to provide work
- that the courier is not entitled holiday, maternity or sick pay
- that the courier may use a substitute
- if the courier does not attend work they will not get paid.
This document was found not to accurately reflect the relationship between the parties. In reality, the courier was expected to wear a company uniform, work at the times she said she was going to work and was directed by a controller. All of these integrated the courier into the business and reduced her autonomy. Thus the courier was a worker.
You will note the resemblance to the Uber case that was heard last year. However, these issues do not only arise in these so called ‘gig economies’.
In the construction industry we have seen the case of Dhillon and Dhillon v HMRC where it was found that a driver for a haulage business was in fact an employee and not self-employed. The business paid drivers a fixed amount per shift, the drivers could refuse jobs and were not guaranteed work. There was, however, induction training and a limited right to substitution. The First-Tier Tax Tribunal found that the driver was an employee during each individual contract as it was the business dictating the relationship. It is important to note that this case was considering whether drivers were employees under tax legislation and therefore the possibility of the drivers being ‘workers’ was not an option for tax purposes.
What does all this mean for businesses? If in fact your staff are workers they will be entitled to, among others, the national minimum wage, paid annual leave, rest breaks and the maximum working week. If your staff are employees, they will also be entitled to, among other things, statutory sick pay, protection on transfer of undertakings, statutory maternity and paternity pay, the right to a statutory minimum notice period and statutory redundancy pay. It is therefore important that you get the documentation and employment status right.
If you would like any advice on the matters raised in this article, please do not hesitate to contact a member of the Employment team.
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