The government has released comprehensive guidance (26th July 2022) to help businesses and workers understand employment status and rights to ensure legislation is adhered to, and there are no ongoing complications. Keep reading, and we’ll summarise some of the important conclusions within the new guidance.
“One-stop shop guidance”
Released on the 26th of July 2022, guidance entitled ‘Employment status and employment rights: guidance for HR professionals, legal professionals and other groups’ provides readers with a “one-stop shop” for workers and businesses.
Business Minister Jane Hunt said:
“Today we are tidying up the rules, helping workers understand their employment rights and find out if they are being treated fairly by their workplace.
Importantly, this one-stop shop guidance is not just for workers – it will also give businesses the confidence and the tools to better support their staff, helping to increase productivity and drive growth.”
The official government press release states:
“Today’s new guidance brings together employment status case law into one place for businesses and individuals to access. This will support workers by improving their understanding of what rights they are entitled to at work, enabling them to have informed discussions with their employer and take steps to claim or enforce them where necessary.
Crucially, the guidance also clarifies the rights that gig economy workers are entitled to – from the national minimum wage to paid leave – while offering them the same degree of flexibility to take on additional work to top up their income, if they choose. This clarity comes following the landmark Uber Supreme Court judgement which held that individuals in the gig economy can qualify as ‘workers’, meaning they are entitled to core employment protections.”
There are three main types of employment in the UK – employees, workers and self-employed
According to the guidance, you are likely to be an employee if:
- You have a manager or are supervised while working.
- You need to work frequently unless you are on leave.
- You have a minimum amount of hours you’re expected to work.
- You are paid for the time that you have worked.
- Work is consistently available, meaning you work for your employer and they ensure you’re working on specific tasks for them.
- You do not use or need to provide equipment.
- You receive a wage and are paid for the hours you work, rather than whether or not you completed a specific task.
- You pay tax like an employee – Pay As You Earn (PAYE).
If the following apply, you may well be a worker:
- You operate with freedom and can choose when you work (usually without obligation).
- You do work within some control from your employer. An example would be a delivery driver where you are free to choose the route you desire, but it’s within your interest to choose the most efficient one. You will probably also need to wear a uniform and be taught how to provide customer service skills when client-facing.
- You usually do not have guaranteed working hours.
- You are paid for the work you do for your employer and don’t have any say in what you are owed.
- You need to complete all work by yourself (or within a team) but cannot send a substitute (e.g. a friend) to come to work on your behalf.
- You would be subject to company disciplinary hearings etc., should you break the rules – because you’re an important part of the company.
- You don’t usually consider yourself self-employed and don’t “market” yourself as such.
The guidance lists the following characteristics of those who are self-employed:
- It’s up to you when you work, where and how you approach your assignment.
- You are solely responsible for how your business performs. You can make a profit or a loss depending on how much you work.
- You negotiate your rate of pay.
- You can send someone else to work for you because you don’t provide a personal service.
- You purchase equipment and goods for work out of your own pocket.
- When you work for a client, you’re not part of their business. For example, you don’t get given a company email account, and you don’t face disciplinary proceedings if you don’t meet their standards). Your client can turn you down if they don’t want to work with you.
The guidance explains employment rights and what applies to the three types of workers (listed above). Employers and individuals must understand how these apply and the law to ensure everyone is treated fairly. The guidance states:
“Employment rights and protections are set out by law and employers must not avoid them. Employment rights and protections vary between the different statuses, and some have qualifying periods.
There are some statutory rights which an employee gets after working continuously for a period of time – this is called continuity of service. Establishing sufficient continuity of service is essential to access those employee rights that have a qualifying period such as the right not to be unfairly dismissed and the right to a statutory redundancy payment. Even if a person does not work every week, a Court can sometimes find that their relationship with their employer continues so that there is an umbrella contract or over-arching contract covering a particular period of time which means there is continuity of service. There are some detailed parts of the law that may mean continuous service is maintained, for example if there has been a temporary cessation of work.”
Please click here to learn more about employment rights and understand what you should be entitled to.
Seek assistance from ACAS if you need it
The guidance provides additional support for those who think their employment status is incorrect or if they are being treated unfairly by an employer. It’s recommended that workers contact ACAS – experts in employment law and settling disputes within the workplace. For more information, please visit the ACAS website.
Top 10 umbrella companies
If you’re a contractor or freelancer and you’re interested in using an umbrella company for your payroll, you’ve come to the right place. We have collated a list of our top 10 umbrella companies, and they’re accredited by either the Freelancer and Contractor Services Association (FCSA) or Professional Passport. Some have special offers at the moment that you won’t want to miss!