UK Law and Practice Contributed by: Phil Linnard, Philippa O’Malley, David Rintoul and Clare Fletcher, Slaughter and May
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1. Employment Terms 1.1 Employee Status Under current English law an individual may be: • an employee; • a worker; or • self-employed. While there are statutory definitions for both “employ - ee” and “worker”, employment status is determined through a fact-specific analysis that considers the actual nature of the employment relationship, rather than solely relying on the terms of the contract. It is not possible for an individual to contract out of their real employment status. Employees An “employee” is an individual who has entered, or works under, a contract of employment – meaning a contract of service or apprenticeship which may be express or implied, oral or written (Section 230 (1) and (2) of the Employment Rights Act 1996 (ERA 1996)). Case law has developed the following key compo - nents of an employment relationship: • the individual is required to provide services per - sonally, and cannot send a substitute; • the employer is obliged to provide work for the individual, which the individual is obliged to do (so- called “mutuality of obligation”); and • the employer exerts the requisite level of control over the individual.
Other factors such as notice provisions and provision of equipment or insurance may help determine the existence of a contract of service, but the presence or absence of any one of these other factors is not determinative. “Employees” are entitled to the full range of statutory employment rights discussed in this guide. Workers A “worker” is an individual who has entered into a contract personally to perform any work or services for another party, as long as that other party is not the client or customer of any business or profession carried on by the individual (Section 230 (3) of the ERA 1996). The personal service requirement for a “worker” is not as stringent as it is for an “employee”. For instance, if the contract permits the individual to send a sub - stitute, but only if they are unavailable and with the employer’s agreement, that individual would not be an employee, but could be a worker. Another key element of worker status is the degree to which the individual is integrated into the employer’s business. If the individual is highly integrated they are likely to be a worker, whereas if they are genuinely in business on their own account, they will not be. “Workers” are entitled to a more limited range of statutory employment rights than employees: their principal rights are protection against discrimination, protection for making a protected disclosure (whistle-
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