The legal test – employee, worker or self-employed?
[ch 2: pages 33-37]The question whether an individual is an employee, worker or self-employed is complicated, but the basic statutory test used to determine access to most statutory rights says that an employee is somebody who works under a contract of employment (whether or not it is written down), while a worker is anyone else who works under a contract to perform work personally for another party to the contract, as long as that other party is not a “client or customer of any profession or business undertaking carried on by the individual”.
In other words, the key to whether someone is an “employee” is whether they have a contract of employment in place. If there is no contract of employment but there is a legal obligation to perform work personally, the person will be a “worker”. The only exception is where someone is in business for themselves, freely contracting with their own clients or customers in a genuine “arms-length” relationship, in which case they will be “self-employed”.
All apprentices with an Apprenticeship Agreement are employees (see page 57).
Through case law, judges have developed various tests to help work out whether someone is an employee, a worker, genuinely self-employed, or a volunteer. These are:
• the presence of mutuality of obligation (an obligation to do some work in return for payment (usually wages);
• an obligation to work personally (i.e. no right to send someone else to do your work instead of you);
• control (the extent to which someone else decides when and how you do your work); and
• consistency (the extent to which the arrangement, looked at as a whole, is consistent with the employment status being asserted).
When an employment tribunal approaches the issue of employment status, it must examine the reality of the relationship, always bearing in mind the employer’s superior bargaining power and its ability to control what goes into the contract documentation (Autoclenz v Belcher [2011] UKSC 41).