‘Self employed’ or ‘worker’ and why is it so important?

With the ‘gig’ economy growing rapidly, as employers we need to be clear on our responsibilities or it could cost us dearly.  There has been so much in the news recently but do we really understand what it all means?

The gig economy tends to refer to people using apps to sell their labour. The most commonly used examples are Uber and Deliveroo, but there are a growing number of platforms facilitating working in this way.

Uber have been arguing that their drivers are ‘self employed’ .  This Employment Appeal Tribunal decision in November, in a case originally brought by two of the drivers said they are in fact ‘workers’ when the app is switched on and not as the US owner of Uber claimed, ‘self employed’.  What that means is they could have the following rights:

  • Rights to the minimum wage
  • Sick pay
  • Paid holidays

So this could cost a considerable amount of money, especially as recently the European Court of Justice decided that if ‘workers’ had been mis-classed as self employed they were entitled to be paid that holiday (potentially going back almost 20 years!)

In some ways it doesn’t matter what is written in a contract, if it doesn’t reflect reality it will be overruled. It comes down to a number of factors, including the obligations on the individual when they are available for work. If these are sufficiently onerous then the relationship is one of a ‘worker’.

So what next? Well, there is a feeling that as more people become active in the ‘gig’ economy, people are not having access to employment rights as they did when they were employees.  The independent Taylor Review was commissioned to look into this for the Government.  It considered the implications of these and other new forms of work on worker rights and responsibilities, as well as on employer freedoms and obligations.  It made a number of recommendations including that workers for firms such as Uber and Deliveroo should be classified as ‘dependent contractors’, with extra benefits.

So watch this space for the latest development but in the meantime check whether your self employed contractors really are ‘self employed’.


The Christmas Party Pooper

The party season is coming, so as employers should we be celebrating or panicking?

If you Google ‘Employer’s Christmas party’, the first 6 results are insurance companies offering Employer’s liability Insurance!

So why is this the case?

Firstly, there could be the big risk that harassment could take place and of course violent incidents at alcohol fueled work parties are not unheard of, but is the employer responsible in these situations?

Yes – if the incident arose during the ‘course of employment’.

What that means is if the incident happened during the Christmas party itself the employer is potentially liable.  It doesn’t matter that the employer would have disapproved of the incident or clearly had not directed someone to behave in that way, they still could be liable. The reason is that social events away from the workplace but involving people from work either immediately after work, or for an organised leaving party, are considered to be in the “course of employment”.

However, some relief is possibly at hand.  In a case this past summer, it was decided that the employer was not liable for damages resulting from an incident that occurred after a party when a number of employees continued drinking in a hotel room at a different location in an impromptu session.  It must be remembered that it is still a fine line and one that employers need to be on their guard against because each case will be decided on it’s individual facts. This is not a get out of jail free card.

So, practically what should employers do in advance of the party season?

They should ensure that they have a policy on equality & diversity, harassment and bullying in place and that their code of conduct includes behaviour at work related events.  Also, that everyone is trained and made aware of these polices and the expected behaviour standards (reminding people that they may be personally liable for some acts can really capture people’s attention!)

Happy holidays!


Harassment – an employer’s perspective

“With all this harassment in the news, what should I be doing to protect my staff?” asked one of my client’s yesterday.

Understanding what is meant by harassment in the workplace is a good start.  Legally harassment is defined as “ unwanted conduct that has the purpose or effect of violating the other person’s dignity; or creating an intimidating, hostile, degrading, humiliating or offensive environment for that person”.

Essentially what is key is the effect it has on the individual.

Our role as employers is to provide a positive work environment where everyone is treated with dignity and respect and one in which people perform to their best.  So practically here are a few top tips for employers:

Make sure you have clear policies and procedures for dealing with harassment, setting it out in handbooks, contracts and communicating this from induction onwards.

Create and maintain the culture in which no inappropriate behaviour is tolerated.

Ensure your line managers and leaders are role modelling ‘this is how we do things around here’, bringing your policy and culture to life in your organisations.

Train all staff in how to spot inappropriate conduct and how to handle it. Have clear lines for reporting concerns, and if possible offer the opportunity to raise concerns outside of this

It is not about the end of humour in the workplace but appropriate humour.  We are at work for a good part of our lives so we must have fun and enjoy ourselves, but always respect others dignity.

The effect of inappropriate behaviour on a business can be substantial, not just through the effects on the individual but the knock on effect on others’ motivation, productivity and staff turnover can be devastating and let’s face it, we are in a time of almost full employment so as employers we need to ensure we attract and retain great people. Young people will not put up with some of the behaviours of the past and they are right, so we must create a workplace in which everyone is happy and can thrive.  Culture is a key attraction and retention tool, it is important not to forget that.

Putting these key measures in place will certainly help keep employers on the right side of the law but more importantly provide a rewarding, respectful and enjoyable work environment for everyone.

Getting redundancy right

Restructuring an organisation is something you may find you need to do in order to ensure the right people are in the right place in a workplace that has grown since you put the original structure in place, or that needs to make cost savings.

Redundancies are often a consequence of this, and although in employment law, are a potentially fair reason for dismissal, they are never nice, and do come with certain pitfalls.

  1. Ensure your reasons are fair.

You have that person who doesn’t really perform too well, and although you’ve never actually discussed this with him, making him redundant would be fair because of his performance, and would leave you free to replace him with someone better, right?  Um, no.  Making redundancies should be because the position is no longer required, therefore you can’t immediately replace the person made redundant.  Redundancy can be because a role is no longer required, the work has diminished, or the work at a particular site has diminished.

  1. Ensure your selection process is fair.

If, say, you have 2 people doing the same job, and now only require 1, you must select the person to be made redundant fairly, and in consultation with them.  This again will rule out simply deciding it will be aforementioned “poor” performer without any further process.  However it could be that objective selection criteria can be agreed, and performance can be taken into account.  Other criteria could be disciplinary records, attendance (but be very careful not to penalise someone who has taken time off for pregnancy related conditions, or in connection with a condition that is likely to be considered a disability), and role-specific criteria, such as customer service, sales achieved, items made etc.  Length of service is not a fair reason for redundancy and should not be considered.

  1. Ensure you make time to consult with people, and meet with them.

We’re not going through the process in depth in this blog, however this is an important process, and if you treat it as something to fit in when you have a spare minute, it’s unlikely to go well.  Take time to talk to people, and empathise with the difficult situation they’re in, however, and you are more likely to have employees who, whilst naturally not happy about the situation, are more understanding of your reasons.  While we’re on the subject, be honest, as far as you can, about your business reasons for making changes, and anything you have attempted in order to mitigate the need for redundancies.

  1. Give those leaving their entitlements.

Make sure that final payments are correct and made in a timely way, and give people the right to appeal against their redundancy.  Are you in a position to offer anything else, such as outplacement support (support with CV writing, job applications etc)?

  1. Consider those staying.

Recognise that there may be feelings of guilt, or concerns that there may be further redundancies.  Reassure as far as you can without of course making promises you may not be able to keep.

How flexible are you?

Not personally, you understand!  However, as a modern employer, no doubt you have implemented, considered, or been asked about some form of flexible working practice.  There remains a great deal of variation of flexibility in UK workplaces and the very phrase still fills many employers with concern.

The legal position is that anyone with 26 weeks’ service can make a request to work flexibly, which the employer must consider, but is able to reject for legitimate business reasons.  However, this article is about more than simply your legal obligation, but what benefits flexible working might bring and why it’s not a scary concept!

Recently, the Equality and Human Rights Commission (EHRC) reported that they considered progress regarding gender pay gaps, as well as pay gaps for disabled or ethnic minority employees, was “painfully slow”.  They set out some recommendations to try to tackle these issues and advertising all jobs as flexible was one of them.  Whilst other areas of work often evolve quickly, there remains a traditional mind-set in many workplaces that sees hours being rigid, homeworking frowned upon, and fears of loss of management control dominate.  At the same time, other employers look to utilise zero hours contracts, or categorise workers as “self-employed”, so it’s clear that certain forms of flexible working which are more clearly financially beneficial for an employer is growing in popularity.   However, look into other forms of flexible working more closely, and you will see a great deal of research pointing to financial benefits for organisations here too.  When people feel happy and trusted at work, they are likely to be more engaged and productive and also less likely to take time off sick.  You as an employer will be able to access a wider pool of potential new employees when you are recruiting, as you haven’t narrowed your field.  It’s also not necessarily the case that flexible working always means reduced hours and thus reduced productivity.  Working at different times, or working compressed hours, means you receive the same amount of output, but with (hopefully) a more engaged employee who you may otherwise have lost.

Clearly, some jobs present more challenges than others to enable flexibility, but that doesn’t necessarily mean it’s impossible.  Have a think about it, as you may find you get great results.


Zero hours contracts – so are they a good idea or not?

Employment contracts are not normally the kind of thing that regularly make the news however, zero hours contracts have a regular place in the headlines and in the opinions of politicians and much of the general public.  They have again recently been in the news, as the Taylor review, an in-depth review of employment practices commissioned by the Prime Minister, was published.  The report did not recommend the end of zero hours contracts, but did have a concern that some companies were too reliant on such, where they perhaps could offer a more secure alternative to their employees.

Zero hours contracts can be very popular with employees.  One of the most common uses of such a system is bank staff in a healthcare setting, which can fit very well amongst employees’ other personal commitments and offers employers flexibility in covering sickness absence for example, without the cost of recruiting people with fixed hours.

However, by their nature they do not offer much security and this is what has led to some bad press.  If an employer routinely offers such contracts but in fact expects the employees to work a certain number of hours regularly, it is unlikely that zero hours contracts are the most appropriate.  Don’t forget that employees on zero hours contracts have no obligation to accept work, just as an employer has no obligation to offer it.

Remember that those on zero hours contracts, if they work, are entitled to benefits in line with other employees, so they will accrue annual leave, are entitled to be auto enrolled in a pension (if they earn enough) and should receive any other benefits you offer, pro rata to their working hours, where appropriate.

Lastly, employers are no longer allowed to write exclusivity clauses into zero hours contracts.  These are when employers do not guarantee work, but require employees to nevertheless be available for work at all times, denying them the ability to work elsewhere.  It seems clear that such clauses could cause financial hardship and for that reason were banned.  Therefore, employers should be careful when drafting such contracts, as their terms can and sometimes should differ from other forms of employment agreement.

Gender pay gap in the news

The BBC has written its own headlines with the revealing of the salaries it pays to its stars, with its highest earners including household names such as Gary Lineker, Chris Evans, Jeremy Vine and Graham Norton.  Does anything strike you as odd about this list?  Aside from the uncomfortableness the BBC was trying to avoid by revealing such sensitive information, it had maybe not anticipated that a rather concerning gender pay gap would also be thrust into the limelight.  News reports quickly picked up that only two of the top ten earners are women and, for example, a list of female newsreaders were all paid less than male newsreaders with similar experience to their female counterparts, for evidently doing a similar job to them.

While you may be correct in thinking that the BBC has little in common with your own organisation, you may wish to consider the gender pay gap issue a little further.  The legal position is that only organisations with 250 or more employees should publish a report on their gender pay gap, that is, the gap between male and female employees’ earnings.  However there is nothing to stop organisations with fewer employees publishing such a report, or at least internally investigating their position.

There are numerous potential benefits of doing so.……overall morale may be improved just from the fact that you’re keen to look into this and take action if appropriate.  You may uncover a problem you didn’t know you had, in which case you can address it.  Even if you can explain any gap, for example the higher salaries are earned by the senior men in the organisation, and the women have more junior roles in general, you should maybe consider why this is, and are you unintentionally discriminating against women in your recruitment or working practices, thus barring them from the most senior positions?

If you can show an absence of a gender pay gap, or that you have tackled and reduced any gap, this will assist your organisation’s reputation, whereas the opposite, as the BBC example shows, can do serious harm to your name in the wider community.  Female employees have the right to bring an equal pay claim if they can show they have been, or are being, paid less than their male colleagues for doing “similar work of equal value”.  The BBC are no doubt bracing themselves for such claims, however they haven’t been the only organisation in the news over recent years for this reason.  Birmingham City Council and Asda are just two big names who have had to pay significant sums of money to female employees in back pay to retrospectively correct their salaries to bring them into line with male counterparts.