Blurred lines - employee, self-employed or worker?

In light of the 'Uber' and 'Citysprint' Employment Tribunal decisions and the very recent 'Pimlico Plumbers' Court of Appeal decision, it is clear that 'Worker' status is highly topical, evolving and a potential pitfall for employers. So, what is it all about?

Most people are relatively clear about what it means to be an ‘Employee’ or ‘Self-employed’. The uncertainty arises as a result of a third class of individuals who are not quite ‘Employees’ but also not independent enough to be thought of as ‘Self-employed’ – the law refers to these individuals as ‘Workers’. When determining whether or not individuals fall within this category, the Tribunal will consider various factors including the amount of control exerted by the ‘Employer’ over the individual (the more control, the more likely it is that the individual will be a ‘Worker’), whether there is a mutual relationship obliging the parties to provide work (‘Employer’) and accept work (‘Worker’) and whether the individual must provide the service to the ‘Employer’ themselves. Crucially for ‘Employers’, ‘Workers’ are entitled to some of the rights enjoyed by ‘Employees’ such as the rights to receive the National Minimum Wage, to receive paid holiday and to have rest periods during working time but they are not entitled to benefits such as maternity/paternity leave or pay, the right to a minimum notice period or to claim unfair dismissal.

In all of the above-mentioned cases, the ‘Employers’ sought to assert, amongst other things, that the Claimants were ‘Self-employed’. In ‘Citysprint’, the Tribunal Judge was far from impressed by the contractual arrangements that were in place between the parties; the documentation was described as "contorted", "indecipherable" and "window-dressing" as it gave the impression that the individuals were ‘Self-employed’ and contracting with the company. It was clear to the Tribunal that the relationship between the parties, in reality, was very different.

In ‘Pimlico Plumbers’, the Court of Appeal expressly targeted arrangements that make operatives appear to clients of a business as working for that business, but at the same time the same business seeks to maintain that they are ‘Self-employed’ and not an ‘Employee’ or ‘Worker’.

As a result of these cases, it is increasingly clear that the Tribunal will look through an ‘Employers’ purported business model and contractual documentation and will review the reality of a relationship when making a decision as to the status of the individual.