2. Categories of worker 





This Chapter summarises the tests that are used to establish employment status and explains how they are applied by employment tribunals to different work arrangements. 



Statutory employment rights are rights deriving from a particular Act of Parliament or other piece of legislation. Unlike contractual rights (that can be enforced by anyone with a contract), statutory rights are only available to those who meet the eligibility criteria set by the particular statute. Reps need a good knowledge of these laws and their limitations to advise members on their rights.


Unions have been calling for many years for the reform and simplification of statutory employment laws which are badly out of step with the modern labour market. Complicated rules on who is an employee, worker or self-employed (called “employment status”) dictate access to basic employment rights such as the right to protection from unfair dismissal (see Chapter 10) or to take time off work in an emergency to care for dependents (see Chapter 9). These laws, fit for a labour market of direct continuous full-time employment, are ill-suited to the insecurity faced by many of today’s workers. 


As well as limiting access to individual employment rights, employment status laws act as a barrier to basic collective rights such as the right to seek statutory recognition of a trade union at work, which is available only to “workers”. In R (IWGB v CAC and Roofoods t/a Deliveroo) [2018] EWHC 3342, Deliveroo cycle couriers were denied the right to seek statutory recognition of their union, the Independent Workers of Great Britain, despite clear evidence of majority support for recognition among the bargaining unit, because the Central Arbitration Committee concluded that they were not “workers” (see Chapter 5: statutory recognition). 




Confusingly, while eligibility for statutory employment rights depends on three different types of employment status, namely employee, worker or self-employed, HM Revenue & Customs (HMRC) recognises only two categories of employment status when deciding employment-related tax liabilities, namely “employed” and “self-employed”. Someone can be a worker entitled to statutory employment rights such as a right to holiday pay and to the National Minimum Wage while at the same time being “self-employed” for the purpose of tax. 


HMRC targets the misuse of employment status laws to avoid tax with a specialist Employment Status and Intermediaries team. Suspected misclassification can be reported by phone or post. 



The role of employment status laws in determining employers’ liability for tax, National Insurance and worker rights (including, most recently, access to pensions auto-enrolment) has spurred the growth of new ways of structuring work to reduce or avoid these liabilities. It is part of the explanation for labour market changes such as the increased number of “gig economy” jobs, the spread of labour intermediaries and the proliferation of zero and short hours contracts across some sectors of the labour market. 


This Chapter begins by explaining the difference between employees, workers and the self-employed, and then outlines how the law approaches the many different work arrangements reps may encounter, including:


 





• zero hours contracts


• part-time workers;





• homeworkers; 





• volunteers and interns;





• young workers;





• apprentices;





• children at work;





• temporary (fixed-term) employees;





• agency workers; 





• labour intermediaries;


• umbrella companies; and


• personal service companies.