Employment Status and Statutory Rights

Employment status and the effect on companies

Employment status has a big effect on companies especially when it comes to statutory rights.

Considering the gig economy, which is growing rapidly, two companies have dominated the news in recent weeks for this reason – Uber and Deliveroo.  One has drivers who are workers, the other has riders who are self-employed.

So, what does this mean for other companies who may have similar arrangements?

Companies must carefully consider the relationship between them and those who provide services for them. The question is whether someone is truly self-employed or a worker.

The answer is complex but through a wealth of case law certain key principles have been established. Two of which are; if a company controls when and how the individual provides their services it is likely the person will be considered a worker for the purposes of employment legislation. Another is that the individual must do the work and cannot send a substitute to do the work for them.

The Employment Appeal Tribunal has ruled that Uber drivers are workers, therefore, they are entitled to National Minimum Wage; paid annual leave, protection against unlawful deductions; statutory rest breaks and protection against unlawful discrimination and whistleblowing. It is likely Uber will appeal against this decision.

In contrast, a test case brought against the delivery company, Deliveroo, ruled that riders are self-employed and not workers. The majority of Deliveroo riders wanted workers’ rights and union recognition but the Central Arbitration Committee found they were self-employed because of their freedom to ‘substitute’ – in other words they can allow other riders to take their place on a job.

With this ruling they are NOT entitled to the National Minimum Wage, paid annual leave etc like the Uber workers as mentioned above.

Companies should also be mindful of arrangements they may have with volunteers; similar arrangements may result in company / worker relationships.

It is recommended that companies assess their relationships with individuals and ensure they take measures to resolve any issues.

If you have any issues regarding employment status, statutory rights and need advice, speak with our HR consultants who will be happy to help or take a look at our HR Services.

This article is provided by Qdos HR.