Employment Law Update | May 2021
Employment Law Update | May 2021
James Mallon, our HR Business Partner, provides us with an Employment Law Update for May 2021.
EAT case considering Mutuality of Obligation Test
Employment status, and specifically whether someone is a worker, employee, or self-employed, has long been a contentious and confusing question for employers. Why does it matter? The rights and legal protections a person is afforded vary greatly depending on their employment status. As a borderline reductive summary, employees have the right to claim unfair dismissal and holiday pay, workers have the right to claim holiday pay but not unfair dismissal, and self-employed contractors can claim neither.
To determine whether a person is a worker or an employee, Employment Tribunals will apply a number of tests, including one known as the “mutuality of obligation” test. Simply put, this test asks: does the employer have to give the employee set work, and does the employee have to accept that work? If the employer has to give the work, and the employee has to accept it, it is one test that starts pointing towards an employee/employer relationship. Conversely, if the employer is not contracted to offer the person set work, that starts to hint at either a worker or a self-employed relationship.
The test was examined recently in the Employment Appeal Tribunal case Somerville v Nursing & Midwifery Council. Here, the Court examined whether a minimum degree of obligation was required in order to be an employee or worker. For instance, if a person is obliged to do only a few hours of work per year, and they can reject that work when it suits them, can that still satisfy the mutuality of obligation test?
The Claimant sat as a panel member for the Nursing & Midwifery Council and chaired Fitness to Practice Hearings for nurses. He was a practising barrister and his letter of appointment to the role stated: “You are not an employee or an office holder of the NMC. Your appointment as a practice committee member makes you eligible to provide services, as an independent contractor, to the NMC, as a panelist or a panel chair.” He was not obliged to sit for a minimum number of sessions per month or per year, and he could withdraw from any dates he had accepted. He sued saying that he was a worker, not a self-employed independent contractor, and therefore entitled to holiday pay.
The Employment Tribunal found that, although there was not sufficient mutuality of obligation or control for the Claimant to be deemed to be an employee, he was engaged as a worker. The Council appealed to the Employment Appeal Tribunal but the Court rejected that appeal. The EAT found that there were a series of individual contracts each time the Claimant sat on a panel and an overarching agreement for the provision of his services. Therefore, there was a contract in place in between any sittings and there did not need to be an “irreducible minimum of obligation” in order for a person to have worker status.
The tests to determine employment status are broad, flexible, and varied. Any employer who thinks they can dictate the rights of their operatives simply by writing in a contract “you are self-employed” will fall foul of the law in a grossly expensive way. Instead, employers need to be alert not just to the full spectrum of tests the courts apply, but also to how the courts have been applying and extending these tests over the last 5-10 years. If you need expert advice and want to ensure you know your operatives rights before they do, contact HPC and we will help you navigate the fog.
Right to Work Checks
Updated Government guidance has stated that the adjusted right to work check process will remain in force until 20th June 2021 (previously 16th May 2021). This adjusted process allows employers to carry out right to work checks over video calls rather than in person and allows job applicants to send scanned copies of identity documents, rather than provide originals. The guidance also states that employers will not have to carry out retrospective checks, i.e. will not have to request copies of original documents from those engaged in the last 15 months, once the adjusted right to work checks end.
Right to work checks are seldom a priority for employers. In some ways, this is understandable: Directors are excited by growth, new ideas, and profit. A law that mandates document-checking is never going to be at the forefront of an employer’s mind. But employers ignore this law at their peril. Failure to check that an employee is allowed to work in the UK can, in extreme cases, lead to the imprisonment of the Company’s Director. Administration may not be fun, but Company Directors need to ensure they have a strong team in place to complete these checks thoroughly, regularly and to the letter.
Acas Report: ‘Estimating the Costs of Workplace Conflict’
Acas published a new report: Estimating the Costs of Workplace Conflict. Staggeringly, it estimates that workplace conflict costs UK employers nearly £30 billion every year, or an average of just over £1,000 for every employee. The research considered the cost of informal, formal, and legal processes, as well as the cost of sickness absence and resignations. Further, the report highlighted that nearly half a million employees resign every year as a result of conflict.
A bug-bear of ours at HPC is that sometimes, by the time a dispute comes to us, there is little hope of reconciling the employment relationship, and more draconian measures need to be taken. Following a prolonged conflict, employers and employees can become so entrenched in their positions that there is no hope of ever salvaging the relationship. It is monumentally cheaper, easier, and less stressful to tackle an issue at its infancy before the relationship becomes toxic, and the trust has gone. At HPC, we have trained mediators who can provide workplace mediation to rescue relationships and allow employers to get on with running their business. If you think this can help you, please speak to the team, and we will talk you through your options.
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If you have any concerns or would like to discuss the Employment Law Update | May 2021 further, please get in contact with the HPC team today.
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