Legal-ease: Employment status

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Where we are with the legal definition of employment status

The second half of 2017 was a busy time for the definition of ‘worker’: what with the Taylor Review, the employment appeal tribunal (EAT)’s decision in the Uber case, the Central Arbitration Committee (CAC) decision about Deliveroo, and a mention in the Budget. So where does all of this leave the distinction between a worker and a self-employed contractor?

The employment status of an individual is critical; it dictates the levels of rights and benefits they are entitled to. An employee will be entitled to the broadest range of rights and a self-employed contractor has the fewest rights.

The Uber and Deliveroo decisions were concerned with the distinction between worker and self-employed contractor. The EAT concluded that Uber drivers were workers whereas the CAC decided that Deliveroo couriers were self-employed.

The EAT took specific note of the control Uber had over the way drivers were appointed and the way they worked, and found that this control was indicative of the drivers being workers. There were contracts in this case referring to an agency arrangement between Uber and the drivers. The EAT concluded that the reality of the working situation did not match what was set out in the contracts and that there was inequality in the bargaining position between Uber and the drivers.

In the Deliveroo case both parties accepted that there were binding contracts between the couriers and Deliveroo. These included a right that a Deliveroo courier could substitute another person in their place to undertake the delivery. The CAC found this undermined any argument that the couriers were workers.

The Taylor Review has been considered by a House of Commons joint committee. It recommended that there be additional guidance through a statutory definition and a presumption of worker status.

While these developments can seem confusing, key messages can be taken from them. In particular note:

  • The wording and circumstances of any contract
  • The working situation
  • The degree of control exerted by the organisation over the individual
  • The ability of the individual to assign a substitute to undertake the work.

Now the government has published its response to the Taylor Review, we will need to keep watch in 2018 to see whether the recommendations of the Review and the House of Commons committee are put into effect.

Helen Rowley is a senior solicitor at ESP Law, provider of HR magazine's HR Legal Service

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