Theresa May commissioned the Taylor Review of Modern Working Practices in
July 2017. In this review, Matthew Taylor emphasised the need to provide fair work
for all. The review recommends that numerous changes are made to improve the
rules regarding employment status. For example, an employer should have the
responsibility of clarifying the employment status of their employees, since they
must adopt appropriate employment policies in response to working conditions
and flexible working rights.
Under the Employment Rights Act 1996, an employee is a person who enters
employment under a contract, and a worker is considered a person who enters
employment under a contract that can be expressed orally or in writing. The
difference is that the term ‘worker’ means a person who works for a third party in
the contract, for example to provide personal services. Since the review, there has
been no significant change in the law concerning the framework for employment
status to eliminate divergences in tax or employment. The current complexity of
the UK statute and employment status makes it difficult to define employment
status. This makes it difficult to decide how to categorise the framework for
employment status, which means that workers have fewer rights than full-time
employees.
The courts have carried out tests to identify employment status, such as the
integration test developed to deal with controlling how a job is done. (Stevenson
case). This test is advantageous for qualified employees, such as surgeons, as
shown in Cassidy v Ministry of Health, where the legal principle held that a person
was a servant of the defendant when they were chosen for the job. However, this
test is criticised for the mutuality in Carmichael, which has denied employment
rights to casual workers since 1999 and is relevant to employment status because
integration has never been defined. This causes issues, as the current work state
of the UK is developing while the statute is not, limiting casual workers’ rights.
Stevenson Jordan and Harrison v Macdonald and Evans (1952 1 TLR 101)
Cassidy v Ministry of Health ([1951] 2 KB 343, 1 All ER 574 CA)
Carmichael v National Power plc [1999] UKHL 47,48
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, HMRC, Employment Status Manual <https://www.gov.uk/hmrc-internal-
manuals/employment-status-manual/esm7200> accessed 1 November 2021
In evidence of this, the degree of control is tested by the control test, where the
master exercises control over the employee. (footnote) The control test has a weak
technology component and is inadequate as the only determinant of employment
in today's labour market. It is unsuitable to apply to high-skilled employees, such
as in Staffordshire Sentinel Newspapers v Potter, where the legal principle
concluded that the right to substitute was part of the contract, but Potter was not
an employee of the respondent. Therefore, his claim for unfair dismissal was
unsuccessful.
Nevertheless, there should be a contractual right to control, rather than in practice
exercising control over, the employee’s activities, shifting the focus to how much
control an organisation has over an individual. The Taylor review suggests
legislation should introduce a better definition of output work under the NMW
regulations to capture services provided by applications and define the criteria for
the status of employees and workers in primary legislation. It implies that the
government should make a free online tool for determining employment status,
such as HMRC's employment calculator. Given this suggestion, it is unclear
whether the review's recommendations will be introduced in practice due to the
government's lack of a parliamentary majority.
Control is already part of the worker's test to decide whether the person works for
a customer, in the case of Windle v Secretary of State for Justice, where the court
found that court interpreters were not employed for the Equality Act 2010, which
considered the zero-hours clause in the plaintiffs’ contracts significant. This shows
how biased the problem of zero-hour contracts and agency contracts is, especially
because the Equality Act 2010 replaced the Equal Pay Act with reasonable
adjustments, including the Employment Regulations Act 2003. Again, this shows
how employment statutes are changing but not keeping pace with employment in
practice.
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