Employment Status: What do strippers, clergymen and car-washers all have in common?

What do strippers, clergymen and car-washers all have in common? They have all been the subject of recent decisions concerning employment status. 

 

Different types of worker - employee, self-employed, agency worker or a partner –  enjoy different levels of ‘employment rights’. For example, only ‘employees’ can bring claims for unfair dismissal, receive redundancy payments or claim notice pay. However, all ‘workers’ are protected against discrimination and have the right to bring claims under the Equality Act 2010. Understanding status is therefore all-important. But, it is not always clear in practice whether an individual is an “employee” or merely a “worker”. 

 

The Employment Rights Act 1996 defines an employee as (my emphasis) “an individual who has entered into or works under a contract of employment [defined as a contract of service”(s230(1)). By contrast, a worker (defined at s230(3)) includes employees, but also individuals who perform personally any work or services for another party, where the context is not that of a client or customer. In other words, those who work under a contract for service. 

 

To be a contract of service, three things must be presents: an obligation to provide work personally (the worker himself must show up for work, he can’t send a substitute); mutuality of obligation (the employer must provide work and the worker must agree to do it) and the worker must be the subject of control (the employer can dictate how the work is performed). If those three elements are present, the worker is likely to be an employee.

 

However, when determining status, the terms of any written contract are only one element to consider. The Tribunal must also look beyond the written terms and consider all of the circumstances of the case to understand the reality of the employment relationship; the written contract may be only one part of a bigger picture.

 

When bringing or defending a Tribunal claim, understanding the reality of the employment relationship in question is vital; the contract alone cannot always be relied upon.