SGS 1: Employment + Working Time regs
The Law: 3 Tier Structure:
1. Common law (primarily Contract)
● This is the first point of reference
2. Domestic Legislation
● Statute has modified the harshness of basic contractual principles to take into account nature of employment
● Employment legislation aims to protect the individual and set down a minimum level of rights
● The legislation fetters the effectiveness of what has been put into the contract
● Examples of statutes:
o Equality Act 2010 o Employment Tribunals Act 1996; and
o Employment Rights Act 1996 o Trade Union and Labour Relations
o Employment relations Act 1999 (Consolidation) Act 1992
● Statutory instruments:
o Part Time Workers (Prevention of less favourable treatment) Regulations 2000
o Working Time Regulations 1998
o Transfer of undertakings (protection of employees) Regulations 2006
o Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013
3. EU Law and Case Law
● European Union Legislation
● Judgements of the European Court of Justice
● Judgements of the European Court of Human Rights
● The fundamental principles contained in EU Treaties
The Employment Tribunal
● Less formal than the civil court system and adheres to its own rules rather than the civil procedure rules
● The person bringing the action is ‘claimant’ & person/organ who the action is against is ‘respondent’
● Panel is made up of 3 members, headed by an Employment judge who is a qualified barrister or solicitor
● A right of appeal lies from the Employment Tribunal to the Employment Appeal Tribunal
● Appeals from the Employment Appeal Tribunal are taken to the Court of Appeal and the Supreme Court
Self Employed Contractors, Workers and Employees
Self Employed:
Stage 1: Define self-employed?
o Employees who work under a contract for services
o The end user pays for the service to be provided or the job to be undertaken
o The end user is the client or customer of the individual or their company
o Self-employed contractors = independent contractors
o Flexibility is a key advantage of being self-employed. Can arrange work patterns + structure work as they wish.
Stage 2: Apply the test?
o Control Test, Personal Service Test, Mutuality of obligations test and other factors test.
o If they do not satisfy the irreducible minimum that needs to be proven to be classed as an employee they’re classed as
self employed.
Stage 3: What rights do the self-employed have?
o Those who are genuinely self-employed do not benefit from most statutory protection.
o They are in business on their own account so those to whom they provide their services do not owe them any
obligations from an employment law perspective
Workers:
Stage 1: Define a worker?
o This is hard to define, there are different statutory definitions.
o However, all of these definitions include employees, all employees are automatically classed as workers.
o Workers also include other individuals who undertake to personally perform work or provide services, but who are
not in a client or customer relationship with the end user
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, o Workers are a middle category. The intent behind the definition of worker was to create an intermediate class for
those who can’t be regarded as carrying on in business on their own account but at the same time do not quite
meet the high threshold necessary to qualify as an employee.
Stage 2: Apply the test?
1. Personal service: if individual has an absolute unfettered right to send a substitute, they aren’t a worker
2. The lack of a client/customer relationship
Stage 3: What Rights do workers have?
o They benefit from important statutory protections, like right not to be discriminated against in work and the
protection of the Working Time Regulations
o BUT THEY DO NOT have claims under ‘unfair dismissal’
Employees
Stage 1: Define Employee?
⇒ An employee works under a contract of service
⇒ Definition: an individual who has entered into or works under a contract of employment s230 ERA
⇒ Employees benefit from protection against unfair dismissal, the entitlement to a statutory redundancy payment,
protection under TUPE on a relevant transfer and the benefit of family friendly protection such as the right to maternity
or paternity leave and pay
⇒ The distinction between self-employed and employee has become blurred with the so-called gig economy so need to
look at all the facts of the case and arrive at a reasoned conclusion
Stage 2: Apply the tests? They are an irreducible minimum that must be satisfied.
Hall v Lorimer- each case will turn on its own facts, but all factors must be considered to paint a full picture
1. Control test
▪ Ready Mix Concrete Test employer must exercise a sufficient degree of control over the individual (where, when,
how, who)
⮚ Features of control:
▪ A clocking in and out system shows the company has control over when the work is done
▪ Requirement that individual reports to same place of work every day = no flexibility, so has control over when the
work is done
▪ Setting of targets and what work needs to be done= control over what work is undertaken
▪ Skilled employers are experts in their field so an employer cannot ‘tell’ them how to do their job, but they can
exercise discretion to take them away from a particular client and this still satisfies
2. Personal Services Test
▪ Ready Mixed Concrete Test Individual must have agreed to carry out work personally in return for pay
▪ If can send a substitute to perform his duties= no contract of employment (Ready Mix Concrete)
▪ Staffordshire Sentinel Newspapers However, a limited power to delegate is not inconsistent with the existence of a
contract of employment:
o Limited power= unable to attend rather than preferring not to AND the choice of substitute is fettered/limited
MacFarlane v Glasgow City Council
o Pimlico Plumbers if there is a right to substitute, does the dominant feature of the contract remain personal
performance on their part??
▪ VS Express and Echo Publications agreement allowed the driver to send a 3rd-party replacement to provide
the services. There was no limited power, it was a general power he could exercise whenever.
▪ Vs Real Time Civil Engineering The unlimited contractual right to substitute leads to the conclusion that
they are self-employed, even if it was never exercised
3. Mutuality of Obligations
▪ Is there an obligation on the company to provide work and for the individual to perform work when given it?
▪ In the absence of it, it is likely to be fatal to finding that the individual is an employee
▪ Carmichael v National Power the parties were not obliged to accept work when offered so were not employees
4. Other Factors (economic and integration)
▪ In addition to the factors which are an ‘irreducible minimum’, it’s necessary to look at all elements of a contract to
understand its true nature
▪ Additional factors to be taken into account include:
o Does the individual take on a degree of financial risk?
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, o Does the individual profit from sound management of tasks?
o Is the individual paid through PAYE or does they provide an invoice for services?
o Does the individual hire their own helpers?
o Who provides the materials and equipment?
o Is there holiday or sick pay?
o How have the parties described their relationship?
o Does the individual wear a uniform and appear to the outside world to be an employee of the company?
o To what extent is the individual part and parcel of the company (attending company social events, training
sessions, team meetings)
5. If the Factors are evenly balanced, consider the parties label
▪ Label placed by the parties on arrangements and the intention of the parties is not determinative.
▪ If the true nature of the contract is that of an employer and employee, the fact the parties set it up as a contract
between principal and independent contractor will not change the fact that an employment relationship exists
(Autoclenz v Belcher) – essential question= ‘WHAT IS THE TRUE AGREEMENT BETWEEN THE PARTIES’.
CHALLENGES TO THE TRADITIONAL TEST FOR AN EMPLOYEE
1. Casual Workers
o Carmichael v National Power Plc worked on a casual basis. They were not obliged to work, but if they did the
company paid tax & NI on their behalf. The company provided uniforms & had control over what they did when
working. There was no sick pay entitlement. HELD to NOT be employees as there was no mutuality of obligation
o Aslam, Farrer and others v Uber Written contractual terms between Uber and drivers bore no relation to reality and
UBER could not be said to be a customer or client of the drivers.
2. Agency Workers
o James v Greenwich London Borough Council unless the paperwork governing the relationship is unclear as to the
individual’s status, the employment tribunal should not seek to find an employment relationship. The correct test is
a question of fact, whether it is necessary to give the arrangements business efficiency, rather than simply desirable
to imply a contractual relationship between the agency worker and the end user
o Alstom Transport v Tilson a significant degree of integration of any agency worker into an organisation is not
inconsistent with there being no employment relationship between agency worker and end user. It is not necessary
to imply an employment contract between the agency worker and the end user to give business reality
o The Agency Workers Regulation 2010 gives specific rights to agency workers:
o Reg 12 & 13 Day One Rights An agency worker must be able to access a hirer’s collective facilities and amenities
and have access to info about the hirer’s job vacancies.
o Reg 5 Equal Treatment Rights after completion of a 12-week qualifying period with the same hirer, an agency
worker will be entitled to the same rights to pay, benefits, rest periods and holidays as comparable employees
or workers engaged directly by the hirer.
o Reg 17 & 18 if the day one rights or the equal treatment rights have been infringed, agency worker can bring a
claim within 3 months from the date of infringement and tribunal can declare the regulation has been breached
and award compensation:
▪ If there has been a breach of reg 12 & 13 (Day One Rights), then bring claim against end user
▪ If breach of Reg 5- then bring claim against agency and end user
3. Zero Hour Contracts
o Employer offers the individual work when it arises & individual can either accept or reject the work offered.
o If the working arrangement follows the written terms of the zero hours contract, it is unlikely that there will be an
employment relationship, as mutuality of obligation will be lacking.
o The individual however, may be a worker and thus entitled to statutory annual leave, minimum wage and other
rights afforded to workers. An employer will still be responsible for health and safety of workers on zero-hour
contracts
o S153 The Small Business, Enterprise and Employment Act 2015 prevents employer inserting a clause restricting the
zero-contract worker from working elsewhere even though they’re under no obligation to provide hours
o S27A(3) ERA any provision of a zero hour contract is unenforceable against a worker if it prohibits the worker from:
o Doing work or performing services under another contract or under any other arrangement
o Doing so without the employer’s consent
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WORKING TIMES REGULATIONS
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, ▪ DEFINITION Reg 2 covers workers, or those who work under a contract of employment or any other contract to personally provide
any work or services to another party/person (this is wide enough to include agency workers and freelancers but excludes genuinely
self-employed).
▪ 48 HOUR WORKING WEEK Reg 4
o Each worker should work no more than 48 hours per week on average over a reference period of 17 weeks.
o There’s no breach in a given week if 48-hour max has been exceeded. Breach will only become evident once 17 weeks have
been worked and an average calculated.
o Working time: when employee is working at the employer’s disposal and carrying out his activities or duties Reg 2
o On call time: time spent by doctors on call at hospital premises even when asleep counted as working time. This applies when
expected to be present and available at the workplace rather than at home Landeshauptstadt Kiel v Jaegar
▪ Federacion de Servicios Privados del sindicato Comisiones obreras for peripatetic workers who aren’t assigned a fixed
place of work, time spent travelling between home & premises of their first and last customers of the day is working time
because they were at their employers disposal during these times.
o A worker can opt out of the 48-hour working week & work more than the 48 hours a week over the 17-week period without
the regulations being breached:
▪ Employers must maintain records of the names of workers who opted out
▪ Worker can give written notice to opt back in and the employer cannot require more than 3 months’ notice.
▪ The opt out ONLY APPLIES TO REG 4 AND NOT OTHER PROVISIONS OR REGULATIONS
▪ PAID ANNUAL LEAVE Reg 13 & Reg 13A
1. Amount
▪ All workers entitled to 5.6 weeks paid annual leave. That’s 28 days for full-time workers. Prorated for part-time workers.
▪ The 8 bank holidays count towards the 5.6 weeks & are not additional (although workers & employer can agree that they
are additional through contractual terms).
▪ Reg 16 workers must be paid at a rate of a week’s pay for each week leave, calculated according to s221 - 224 ERA
2. Pay in lieu Reg 13(9)(b)
▪ Employer may not pay a worker in lieu of permitting them to take annual leave, except on termination of employment
3. Roll over
▪ Employer may not allow worker to roll over any part of their holiday entitlement to the next holiday year Reg 13(9)(a)
▪ Worker may be permitted to roll over any contractual leave entitlement over & above their entitlement under regs
4. Notice Reg 15
▪ Worker must give notice to employer of their intention to take leave. This notice must be at least twice as long as the
amount of leave requested. If employer refuses the request, they must serve a counter notice on the worker & this counter
notice must be at least as long as the number of days leave refused. This can be varied by an alternative agreement
between worker and employer.
▪ The employer may also require a worker to take all or part of their leave on certain dates by giving them notice of that
requirement. Length of notice must be at least twice the amount of time employer wishes worker to take as leave.
5. Accrual of annual leave
▪ Stringer v Revenue and Customs Commissioners:
o Entitlement to paid holiday does accrue whilst an employee is absent on sick leave; BUT
o It is for member states to decide whether workers may take their holiday while they are on sick leave
o And after termination of the contract, workers are entitled to a compensatory payment to reflect accrued but untaken
holiday leave, even where the worker was on leave for the full holiday year.
▪ NHS Leeds v Larner: Reg 13(9) should be read as follows, ‘leave to which a worker is entitled under this regulation may be
taken in instalments but (a) it may only be taken in the leave year in respect of which it is due, save where the worker was
unable or unwilling to take it because he was on sick leave and as a consequence did not exercise his right to annual leave’
▪ KHS AG v Schulte held that there is a limit to length of time that an employee on long sick leave can continue to carry over
untaken statutory annual leave. That carry over period must be substantially longer than the leave year. Recommended 18
months
6. Part time workers and bank holidays
▪ Part Time Workers (Prevention of less favourable treatment) regulations 2000 a part time worker should not be treated
less favourably than a comparable full-time worker, in relation to the benefits offered to that part time worker.
▪ Bank holidays may have to be prorated for part time staff. Employers should work out how many bank holidays a part time
worker should be entitled to and then compare that entitlement to the number of bank holidays which, due to their
working pattern, that worker will actually take time off. If there is a shortfall the part time worker should be allowed to take
that shortfall as holiday during the holiday year. This will make up for the Monday bank holidays the worker misses out on
● REST PERIODS
○ Reg 10: daily rest- adult workers are entitled to 11 consecutive hours rest in each 24-hour period
○ Reg 11: Weekly Rest- adult workers are entitled to a rest period of 24 hours in each 7-day period
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