Employment status: Key characteristics

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Post Uber-tribunal, employers may be concerned to make sure they have employment statuses clear

As part of our interrogation of the gig economy and what it means for HR, Alan Price reminds of the legal criteria and rights for four different employment statuses

Employee

Works under the control of the employer i.e. is told when, where and how to do the work. Is provided with work to do and cannot turn it down. Must do the job themselves i.e. they cannot send someone else to do it in their place. Is entitled to all employment rights, though some require a prescribed amount of continuous service. The main rights include protection against ordinary and automatic unfair dismissal, national minimum wage/National Living Wage, statutory sick pay, maternity leave and other leave related to family, paid annual leave, protection against discrimination, and statutory redundancy pay.

Worker (including agency workers and casual workers)

Must do the job themselves i.e. they cannot send someone else to do it in their place; but does not necessarily work under the control of the ‘employer’ or have to accept work that is offered. Not in business on their own account. Is entitled to basic employment rights including national minimum wage/National Living Wage, paid annual leave, and protection against discrimination. Not protected against being unfairly dismissed.

Self-employed

May be able to send someone else to do their work; is in business on their own account i.e. stands to take financial risk. Will invoice for work done rather than receiving a wage. Will determine their own hours and use their own equipment. Has no employment rights other than protection against discrimination in some circumstances.

Employee shareholder

Works under the control of the employer. Is continually provided with work to do and cannot turn it down. Must do the job themselves. Has minimum £2,000 worth of shares in their employer and special contractual documentation. Has all the same rights as an employee except for ordinary unfair dismissal, statutory redundancy pay, and adjustments to other rights.

Alan Price is CEO of Croner

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