Am I an 'employee' or a 'worker'?
Good question, because the distinction can have important ramifications
The distinction between who is considered an employee and who is classified as a worker is of paramount importance. The differentiation not only affects the rights and responsibilities of the individuals involved but also shapes the obligations of employers.
I’ll explain why it’s crucial to distinguish between an employee and a worker, exploring the legal ramifications and practical implications of each classification.
Defining the terms: employee v worker
The term 'employee' refers to an individual who has entered into or works under a contract of employment. This contract can be explicit or implied, and it can be oral or in writing. Employees are afforded the full suite of employment rights available under legislation which includes statutory sick pay, maternity and paternity leave, unfair dismissal protection, and redundancy payments.
Conversely, the category of 'worker' encompasses a broader spectrum of individuals. This includes those who have a more casual employment relationship and may not meet the full criteria to be classified as employees. Workers are entitled to some employment rights such as the national minimum wage, statutory annual leave, and rest breaks. However, they do not enjoy the full range of protections granted to employees, such as protection against unfair dismissal.
What are the legal implications of the distinction?
The distinction between employees and workers is not merely academic; it carries significant legal implications. For employees, the protection against unfair dismissal is a critical right. An employee cannot be legally dismissed without a fair reason (such as misconduct or redundancy) and without the employer following a fair process. This is not the case for workers, who can be more easily terminated from their positions without recourse to the protections against unfair dismissal.
Additionally, employees have the right to receive statutory redundancy payments. This entitlement, which accrues with the length of service, is designed to offer financial support in the event of job loss due to redundancy. Workers do not qualify for redundancy payments, which can make their economic situation more precarious in the event of job termination.
Tax and social security contributions
From a fiscal perspective, distinguishing between employees and workers is also crucial. Employees are subject to PAYE (Pay As You Earn), where income tax and National Insurance contributions are automatically deducted from their wages by their employer. For many workers, particularly those who may be classified as self-employed for tax purposes, there is an obligation to handle their tax affairs independently, including paying National Insurance Contributions directly to HMRC.
This distinction also affects entitlement to benefits such as statutory sick pay or maternity/paternity pay, which are available to employees but not necessarily to all workers. The correct classification ensures that individuals receive the appropriate benefits and protections and that employers fulfill their legal and financial obligations correctly.
Why the distinction matters for employers
For employers, the accurate labeling of staff as either employees or workers is essential to comply with legal obligationbs and to avoid costly legal disputes. Misclassification can lead to claims for right that would have been due under the correct classification. Additionally, it can result in fines from tax authorities and damage to the employer’s reputation.
Employers must therefore carefully assess the nature of their relationship with the people they hire, considering factors such as the degree of control over where and how work is done, the mutuality of obligation, and the permanency of the relationship.
I have a question coming up next Tuesday in my Q&As:
Am I an employee or self employed?
Q. i work 2 hours a week gardening for a neighbour. i use his mower and his tools and i have agred to do it every two weeks. he says im self employed but i think im employed. can you tell me my employment status?
A. Determining your employment status involves assessing various factors, particularly the nature of your work arrangement and how much control your neighbour has over your work. Based on your description, there are several key points that suggest that you might not be self-employed.
Firstly, you mentioned that you use your neighbour's equipment and follow a schedule set every two weeks. This implies a degree of control over how and when you work, which is more characteristic of employment rather than self-employment.
The fact that you use your neighbour's mower and tools rather than providing your own also points towards an employment relationship. Typically, self-employed individuals provide their own equipment.
Further, if you do not have the opportunity to profit from managing your time and investment, and bear no risk of loss, this can indicate employment rather than self-employment.
However, the limited hours you work and the informal nature of your agreement could complicate this determination. I don’t often cite case law but the case of Autoclenz Ltd v Belcher the Supreme Court emphasised looking beyond any agreement to the reality of the situation.
Given these factors, while there are elements suggesting a potential employment relationship, determining your exact status can be complex and might depend on a detailed evaluation of all aspects of your work arrangement, similar to those considered in employment tribunal cases, but I’m leaning to the fact that you would be an employee!
Subscribers get access to all 10 Tuesday Q&As and a huge back catalogue of Q&As and articles
To conclude, the distinction between an employee and a worker is not just a matter of semantics but a fundamental classification that affects a multitude of legal rights and responsibilities. Correctly identifying whether an individual is an employee or a worker ensures they are granted the appropriate legal protections and benefits. For employers, it helps maintain compliance with employment and tax laws, avoiding potential legal challenges and penalties.
Primary school teacher sacked for teaching kids how to do TikTok dances
Georgia Rogers started teaching at West Grantham Church of England Primary Academy in Grantham, Lincolnshire, in September 2019. The hearing was told on the last day of term in July 2021, the pupils in the teacher’s year five class “wanted to show her a TikTok dance”.
She has now been fired as she breached the school's safeguarding procedure by failing to report her pupils use of the app, an employment tribunal heard. Employment Judge Victoria Butler said Miss Rogers was “undoubtedly a committed teacher who enjoyed her job” with a previous unblemished disciplinary record. Mirror
BBC News presenter launches legal battle against broadcaster after being off air for a year
The BBC is being taken to an employment tribunal by newsreader Martine Croxall who has accused the broadcaster of age and sex discrimination.
Ms Croxall, 55, who has not appeared on air since March 2023, is taking legal action after she and four other female employees lost their senior positions following the merger of the BBC’s News and World News channels, official documents reveal. Independent
Muslim teaching assistant claims being awarded the Christmas Grinch prize at 'light-hearted' school awards ceremony made him a victim of religious discrimination
A Muslim teaching assistant who claimed that being given the Christmas Grinch prize at a staff award ceremony amounted to religious discrimination has lost his employment tribunal case.
Salah Toughfar said he was 'upset and distressed' to have been compared to the Dr Seuss character - despite not know anything about the mean-tempered creature until a colleague showed him a Wikipedia description. Daily Mail
Rastafarian guardsman wins racism case
Dwight Pile-Grey was one of the first Rastafarian men to become a guardsman and served for 16 years. His employment hearing was held in June and July 2023, and the tribunal service published the outcome of its judgment but nothing further in December 2023.
Pile-Grey was the first Rastafarian soldier allowed to wear his hair in locs, and joined the Army at 37. He had signed up in 2005 and was a musician with the Royal Corps of Army Music, and later took a role in the Band of the Grenadier Guards. Personnel Today