Just a few months into 2017, emerging alternatives to traditional working patterns and arrangements are raising a number of interesting questions about the future direction of employment law.
Employers now operate in an employment arena where short-term contracts are commonplace and temporary positions and
freelance work is the norm!
While this operates to provide greater freedom and flexibility in relation to work for individuals concerns are starting to emerge that for some employers it creates opportunities for exploitation. The legislature and employment law courts now have a critical role to play in ensuring clarity and certainty for employers and individuals alike in avoiding unintended consequences.
Informal ways of engaging workers has existed for decades but arguably, technological advances make it easier for the informal workforce to tap into the mainstream working environment. This has led to concerns about employees within formal work patterns being disenfranchised and experiencing a gradual erosion of rights associated with traditional working arrangements.
Lost in the debate about the evils of non-traditional forms of working is the host of benefits that it can bring. Flexibility is the key argument of supporters. The ability of individuals to work whenever they want has a direct impact on earning income without undermining childcare, family obligations and medical priorities. Employers also benefit by being able to optimise resources while at the same time managing costs.
The legislature and the courts now need to provide confidence to business that where they engage individuals with the intention on both sides that they are genuinely self- employed, they are not subsequently declared workers or employees.
The genuinely self-employed do not have employment rights. Workers, a creation of European law enjoy fewer rights than Employees but are entitled to receive among other things the National Minimum wage and have a right to paid holiday. Workers can also claim for arrears of holiday pay, which can create very onerous financial burdens on businesses in the event that there is a large group of claimants.
There have been the much publicised decisions in the continuing saga of “employee v worker v self-employed” – this saga is set to continue in the light of the Uber decision that a group of 19 Uber drivers were entitled to receive the National Minimum Wage and holiday pay, being appealed. Whether the recently published Employment Status Review will help organisations determine the question is yet to be seen, but commentators have already pointed out that the review is dated December 2015!
Traditionally, organisations have relied on contracts and policies as a means of plotting a safe passage through the thorny landscapes mentioned above. And, whilst any employment lawyer worth their salt will advise that organisations should ensure they have in place up to date and relevant employment documentation (such as contracts and handbooks), is this enough? Very definitely “no”. Long gone (if ever it was) is the time that organisations could brandish these documents in a “get out of jail free” way.
The Department for Business, Energy and Industrial Strategy has recently issued a statement which included the following “an individual’s employment status is determined by the reality of the working relationship and not the type of contract they have signed. Individuals cannot opt out of the rights they are owed, nor can an employer decide not to afford individuals those rights. Employers cannot simply opt out of the NLW by defining their staff as self-employed.” A sign of things to come?
For assistance with minimising the risk and guidance on proposed engagement agreements you can contact a member of the team at FG Solicitors on 01604 871143.