SHOULD YOU BE PAYING HOLIDAY PAY TO YOUR CONTRACTORS?

 

It is thought that people are either self-employed or employees.  When it comes to employment law, however, it’s not that simple.  Somewhere between an employee and a self-employed contractor, there is a third category referred to as ‘workers’.  However, HMRC does not recognise this third category for tax purposes.

 

There may be an individual who pays tax as self-employed but under employment law would be classed as a worker.  These workers can make claims for unpaid holiday pay; the national minimum or living wage and breaches of some discrimination laws.

 

With recent publicity surrounding such cases, it is possible that we will see more individuals pursuing organisations for payments which neither party expected to pay or receive.  Recent cases include a bike courier and an Uber taxi driver who were considered to be workers and therefore entitled to additional payments and protections.

 

The content of the contract you enter into with a self-employed contractor is not enough to defend a claim successfully, if, in practice, the relationship works differently.  Tribunals and courts have confirmed

 

 

 

 

 

 

APRIL 2017

 

 

 

that whether an individual is an employee, a worker or is self-employed is now a balancing act with no tick box ready reckoner available to decide.

 

The factors below may be taken into consideration:

 

What words do you use?

 

If you use words such as ‘employed’ or ‘dismissed’, this would indicate that an individual may be an employee.  Instead, you could use words such as ‘contractor’, ‘contract’ and ‘engaged’ instead.

 

What would customers think?

 

If a customer sees the person wearing the company’s uniform and drives a branded company vehicle then they will be more likely to think they are employees or workers.

 

What control do you have over the individual?

 

If the individual has no control over when and where they work, what they have to do, what they will be paid for and signs up to comply with various rules, then this would indicate that they may be employees or workers.

 

 

 

 

Is the individual obliged to perform the work personally?

 

Unless you can show that the individual is running their own business and you are a customer of that business and you do not require them to personally perform the work then that individual would be considered an employee or worker as self-employed people can delegate their work to others.

 

Are you obliged to provide work for the individual?

 

If you are not obliged to provide work to the individual and they are not obliged to perform work for you, this would normally rebut the argument that there is an ongoing employment relationship.

 

How do you pay the individual?

 

Workers and employees may be paid regular payments without having to invoice for work completed, whereas self-employed workers would normally invoice at a fixed price for work they have carried out.

 

Does the individual perform work for other people or organisations?

 

If the answer to this question is no and the company is the individual’s only client then this is more likely to mean that the individual would be considered an employee or worker.

 

Who supplies the tools and materials?

 

Employees would generally expect their employer to provide them with the tools and materials they need to carry out their duties.

 

 

What is the individual’s tax status?

 

Individuals are less likely to be employees if they pay their own tax but this is not determinative of the position as different rules apply to tax than to employment or workers’ rights.

 

If you have clearly worded contracts that set out everyone’s obligations and expectations and ensure that the relationship is conducted in accordance with those contracts then you can protect yourself from any future claims.  Getting it right at the start of the relationship can save costly and time consuming headaches in the future.

 

 

SAR’S AND PROPORTIONALITY:  GOOD NEWS FOR EMPLOYERS?

 

Last month, the Court of Appeal in the case of Dawson-Damer v Taylor Wessing LLP held that in searching for information organisations, in some instances, could claim disproportionate effort when dealing with Subject Access Requests (SAR), but why is this good news for employers?

 

What is a SAR?

 

A SAR is a written request made under the Data Protection Act 1988 (DPA) by an individual to access their personal information that a company holds on them.  SAR’s are becoming more popular in situations where there is a grievance, dispute or dismissal claim by the individual.

 

 

 

 

 

 

Why was this case before the courts?

 

Mrs Dawson-Damer and her two adopted children are the beneficiaries of various Bahamian trusts.  In 2014, they sought disclosure of personal data from Taylor Wessing, solicitors, who were acting on behalf of the trusts.  The SAR was made in connection with a dispute regarding the trusts and was raised in the Supreme Court of the Bahamas.

 

Taylor Wessing, among other things, asserted that they did not need to provide this information as it was not reasonable or proportionate to carry out a search for the information and to assess what was covered by privilege and what was not.

 

What did the Court of Appeal say?

 

The DPA allows organisations to refuse a SAR where the supply of the information requested would involve “disproportionate effort”.  The ICO’s Subject Access Code of Practice suggests that only the work in producing copies is relevant in terms of this proportionality assessment.

 

However, the court found that when assessing whether responding to a SAR would have a disproportionate effort, consideration should be given to both:

 

  • The work needed to supply copies of the relevant information and

 

  • The work needed to search for the relevant information.

 

 

 

 

Why is case important for employers?

 

Although, in this case, the Court of Appeal overturned the High Court’s earlier findings and found that complying with the request would not create disproportionate effort, the ruling itself does not appear to widen the scope of the exception to include the work needed to search for relevant information which could assist employers when dealing with SARs.

 

When passing judgement, the court concluded that searches for information should rarely be disproportionate as organisations should be considering the need to respond to SARS when designing their systems and procedures.  This is an important point as we near GDPR implementation).

 

 

HEADSCARVES – IS YOUR WORKPLACE DRESS CODE DISCRIMINATORY?

 

According to the European Court of Justice, a neutral ban on the wearing of all visible religious signs is not direct discrimination.  For example, a receptionist in Belgium wished to wear an Islamic headscarf while at work, however, her employer had a policy banning any visible signs of political, philosophical or religious beliefs.  The internal rule treated all employees in the same way, requiring them all to dress neutrally.  As a result, the employee’s dismissal was not considered to be direct discrimination.

 

 

 

 

 

 

However, the court did not rule out the possibility that the dress code might amount to indirect discrimination.  Although apparently neutral, this result may disadvantage people of a particular religion.  An employer’s desire to project an image of political, philosophical and religious neutrality towards its customers can be a legitimate aim.  However, the court questioned whether the employee could be given a position not involving visual contact with customers rather than dismissing her.  If this was the case then the dismissal probably amounts to indirect discrimination.

 

What can employers in the UK take from this decision?

 

When applying a dress code rule, be clear what it is you are trying to achieve and whether you are applying the rule in a genuine and consistent way.  If your main motivation for the rule is customer perception, do you need to apply the rule to non-customer facing employees?

 

Another case which occurred in France related to a design engineer providing IT consultancy services to clients.  The client complained that the engineer was wearing a headscarf.  Her employer asked her not to wear the headscarf at her next meeting with the client and she refused and was subsequently dismissed.  The question for the court was whether the wishes of a client, who didn’t want to deal with someone wearing an Islamic headscarf, could be a defence to a claim of discrimination.  Unsurprisingly, the answer was no.


 

Monthly Bulletin of Indices

 

 

 

 

YEAR

JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEPT

OCT

NOV

DEC

2005

711

713

713

713

713

714

769

769

769

768

769

770

2006

769

770

770

769

769

769

793

794

793

793

793

793

2007

793

795

795

795

795

795

824

825

825

825

826

826

2008

826

827

827

831

831

832

874

874

874

873

873

874

2009

874

875

874

874

875

875

875

875

875

876

876

876

2010

876

878

878

878

879

879

879

879

879

879

880

880

2011

880

885

885

885

888

889

898

898

909

908

908

911

2012

910

911

913

912

910

912

912

914

915

915

924

924

2013

939

940

943

942

941

938

937

937

938

937

937

937

2014

941

941

942

941

941

941

961

961

961

960

960

962

2015

961

961

961

960

969

969

993

993

993

993

993

992

2016

992

993

992

992

992

992

992

1016

1015

1013

1015

1015

2017

1018*

1018*

1020*

 

*Provisional