An individual choosing to be self-employed is nothing new. Nor is the process of a company engaging the services of a self-employed contractor to undertake a specific role. However, ever since two drivers took the taxi firm Uber to court last year; claiming they were more like ‘workers’ than self-employed contractors and therefore entitled to certain legal rights; a sharper focus has been paid to those working in a similar manner.

According to some reports, the so-called ‘gig-economy’ now accounts for up to 5 million people in the UK. With this in mind, here is some information on what employers should be mindful of when it comes to employing the services of self-employed contractors.

It’s not all in a name

Many employers are under the illusion that requiring workers to sign zero hours contracts or casual worker agreements will automatically determine a worker’s employment status in the eyes of the law. However, this is not necessarily true and as seen in the Uber case and others, Courts and Tribunals will always look at the reality of an individual’s day to day working conditions when making their ruling. Employers should be aware that the name or contents of an employment contract or agreement can be disregarded should a Tribunal conclude it bears no resemblance to the reality of a worker’s routine duties.

Ensure a fair rate of pay

The recent cases brought against the likes of Uber and CitySprint were borne due to workers feeling aggrieved that they were effectively being paid below the national minimum wage once other costs of doing their work, such as maintaining a vehicle, any sick or holiday pay and admin expenses, were taken into account.  Companies utilising ‘casual’ or ‘gig’ workers would therefore be advised to ensure they are paying a fair hourly rate and generally not treating such workers unfavourably.

Workers vs contractors vs employees

Employers should be mindful of the differences in the eyes of the law between workers, contractors and employees. For example, whilst workers have fewer rights than employees under contracts of employment, they do still have rights including entitlement to the national minimum wage, holiday pay and the right not to be discriminated against.  The Government is currently undertaking a review of modern working practices in order to keep up to speed with rapidly changing business models and it will be interesting to see whether such rights will also be extended to ‘gig’ workers.

As individuals continue to choose to undertake work on a casual basis, this area is likely to grow in importance.  Employers would be sensible to take advice should they employ the services of a large number of casual workers, ‘gig’ workers or contractors.  For further help and advice, please contact us.

KMC Human Resources,
Sabden, Lancashire, BB7 9EP 01282 875728

http://www.kmchr.com