Define employee?

James Fairchild
Member - 256 posts

Anne, can you give more information about a sessional (seasonal?) worker?

I think the existance (or otherwise) of mutuality of obligation (in the period when these people are not working) is the key point here.

If these people are low level workers, I think that the tribunals might give more sympathy than if they were, for an example an IT consultant who comes when you have a problem.

In terms of your benefits (sick, pension, etc) the danger seems to be one of these people proving that they are an employee (ref Dacas, Muscat, Bushaway, James, etc etc) and hence being able to use the Part Time Workers (Prevention of Less Favourable Treatment) Regulations to show they are being unfairly denied sick/pension/etc.

I also suggest you consider the make-up of your team, and whether a Racial or Gender claim is likely.

I'm also wondering whether the legislation (and I can't find the reference off-hand) allowing fixed term workers who have worked on a series of contracts for four years to become permanent would be relevant here.

On a practical level, what is the cost to your business in bringing these people onto a formal Part Time contract?

Anne McAllister
Member - 124 posts

James,
I have consulted a legal representative about this and the situation is far from clear.
The staff are not seasonal. The closest description of the contract seems to be "casual" and traditionally this is used on an ad hoc basis.....ie we offer work and they can accept or decline the work.
It is written into the contract (which everyone must sign) that we are under no obligation to supply work and they are under no obligation to accept work.
This works well for some staff, ie student wanting to earn money in their spare time, some staff with other jobs who want to earn extra and it works well for us because we can keep the costs down .
I suppose they are a bit like agency workers except we employ them direct.
I have always been under the impression that the staff on these contracts were happy as it gives them the freedom to choose when and to some degree where to work.
For example if I offered you work in a service you didnt like you would be free to say no.
Tha main problem is that many staff are on these contracts for long periods of time and the only time spent not working for the organisation is days off i.e. working up to 37 or sometimes 40 (and occassionally) above hours per week and for varying lengths of time (up to 4yrs)
They are different from part time staff because we dont give ssp or company sick pay if you are unavailable for work you are unavailable. We do pay holiday pay ( allocated several times a year ) Ive just realised that they dont qualify for flexible working or parental/dependant leave either.
Intyerestingly you mention the gender claim here. This is one of the areas brought to my attention as many( not all) of our staff are female.This hasnt been an issue before.It has always been accepted by staff and management that sessional /casual workers do not have the same rights and this has been considered a perk by some who do not want to be contracted in a traditional way.
I know we are not alone as many organisations in the health and social services industry operate this way but we are now are now being challenged and as i said I have consulted our legal team and am awaiting their response but wanted to get some good advice from here.

Martin Brewer - Mills & Reeve
Online advisor - 84 posts

Legally speaking in order for someone to be an employee the minimum (but not only) requirement is mutuality of obligation (the employee is obliged to work, the employer is obliged to pay). The absence of this is fatal to an employment relationship. Your contract would seem to be sufficient to prevent these individuals being employees (assuming it's not a sham contract). I should add that it is irrelevant whether the individuals concerned have never or rarely refused work offered. If they can refuse then there is no mutuality of obligation.

Anne McAllister
Member - 124 posts

Very interesting Martin. I dont consider them sham contracts but that seems to be what is being suggested.
These contracts have been unchallenged until now but there is a statement reading....sick pay is not payable(ssp or company sick pay) in accordance with the relevant stautory and organisational regulations.....however one member of staff has actually been paid SSP and the suggestion now appears to be that the contract is in fact illegal.
Another factor appears to be that verbal contracts have been entered into facillitating set hours and set days over a period of about 7mths.
Does this make any real difference.
I think i know the answer but Im hoping to get impartial advice here.
Thanks
I know its difficult but it seems to have opened a can of worms here.

Pasc Ruggiero CFIOSH, FIIRSM
Member - 42 posts

More ‘muddy waters’. A person may not be classed as an employee for employment, tax and insurance purposes but may still be an employee for health and safety purposes! This is a complex area but in simple terms if an employer controls this person as if he were an employee, then the requirements of section 2, HSWA74 etc will apply. This is very often the case in construction work.


If the employer - employee relationship doesn’t hold, then s3, HSWA 74 (duties to “others”) will apply and very often, in practice makes little difference to responsibilities to this person. However, this may absolve the employer in eg providing PPE!

Anne McAllister
Member - 124 posts

Muddy waters indeed.
The problem seems to be the use of the word sessional.
Its not seasonal, but it is classed as employee for tax and insurance purposes i.e. they are clearly not self employed.
The main concern appears to be the fact that two different interpretations are at work here.
The traditional "casual" worker who wants to choose when and where to work and therefore control his/her employment to some degree and the longer term worker who has ( in some cases) entered into a verbal agreement to work set hours and days ( in one case due to childcare issues).
Many organisations like ours could not function without these workers /employees of both interpretations.
James the main issue with providing part time or full time contracts here would really be financial in respect of rights to sickpay ,pensions etc but I fear a precedent may already be set as one member of staff appears to have been paid ssp because of the amount of money earned prior to becoming ill.
Regarding the reference to ETs the majority of these sessional staff do tend to be front line workers although a few are in more senior posts.
Somebody somewhere must have come across this before.
Any advice welcome
Thanks

James Fairchild
Member - 256 posts

In reality Anne, the employees will say that they are happy to work on this kind of flexible basis until such time something happens (i.e. a manager deciding that they are not to be offered work any more) then they will try every trick in the book to prove employment status and hence the right to claim unfair dismissal.

Martin - you say Mutuality is the minimum requirement, but what of the notion (stated in the Dacas judgment, I think) to 'look through' the written contract(s) which in this case is presumably a contract for services, to see the existance of an implied employment contract (by virtue to the reality of the circumstances).

I realise that the guidance in Dacas has been pretty much replaced by the guidance in James v Greenwich, but references were made to "the passage of time" in the former.

I guess this is what you mean by a sham, but even where the documents (at face value) are genuine and not a sham, I imagine a tribunal would be prepared to "read between the lines" in the case of a worker they perceive as vulnerable.

Anne McAllister
Member - 124 posts

James confuses me because that was clearly an agncy worker employed by the agency but who worked for the council for a period of time.
We employ these individuals directly.
Thanks a lot for some really useful advice.

Anne McAllister
Member - 124 posts

Just to clarify .....I am referring to the James case and not james Fairchild who does not confuse me at all LOL

James Fairchild
Member - 256 posts

I do sometimes..... heck I even confuse myself some of the time. I was trying to suggest that Ms. Dacas/Ms. James are/could be seen as similar to your issue because (as I see it) you have these casual workers on contracts for services whom you do not wish to be able to claim full employment rights (which is a legitimate objective of your business, in my view).

I think that is analogous to the situation of an agency worker trying to show the existance of an (implied) direct contract of employment instead of or in addition to their written contract for services.

Martin Brewer - Mills & Reeve
Online advisor - 84 posts

catching up on this I can see lots of muddied water.
James, the courts have confirmed that you cannot imply a contract of employment unless you have the requisite 'necessity'. The courts have also confirmed that time is not an issue. Furthermore they have reaffirmed that unless the contractual arrangements in place are a sham, you don't look behind them.
So, the key issue for Anne is this: can her workers refuse work which is offered. If they can then they are not employees. Employees cannot refuse work. It does not matter if these workers have never refused. The test is not 'have they' but 'could they'.
Anne, being on the payroll is not conclusive of an employment relationship. Many non-emloyees who hire out their services on an individual basis are put on the payroll as HMRC require this-it's a tax collecting measure.
Furthermore, the fact that someone has mistakenly received sick pay does not make them an employee. It's just a mistake.
What this debate does highlght is the very real need to get good contracts in place, be they employment contracts, consultancy contracts, contracts for services etc. and to ensure staff are treated in accordance with what has been agreed.

Anne McAllister
Member - 124 posts

On researching further it appears that the sick pay was not erroneously given. According to HM Taxes website employees are entitled to SSP if they have earned in excess of £80 (roughly) per week.
Technically the staff can refuse work but verbal agreements appear to be in place and set hours and days appear to have been worked.
I have also discovered that the service involved has been referring to an outdated policy (?)
I think its Acas who refer to the refusal of work as ONE issue in determining employee status . I beleive the other issues are wether tax and insurance are paid and control over work.
I take your point about having good clear contracts in place but this is an inherited problem.
Many thanks for the advice here ( to everyone).
Any further comments or suggestions welcome.

James Fairchild
Member - 256 posts

Anne,

I have just today received an email about a course run by CPD Webinars on this very topic - may be very helpful for you if you attend. Link:

http://www.cpdwebinars.com/details.php?id=25
(if this link doesn't work, then send me a message [click my name then click "send message"] and I shall forward the email to you)

Martin,
I don't think your note "Furthermore they have reaffirmed that unless the contractual arrangements in place are a sham, you don't look behind them" is quite right.

James CoA p50: "The EAT added observations (paragraphs 53 to 61) which are intended to assist tribunals in the task of deciding whether a contract of employment with the end user should be implied. ETs would be well advised to follow the guidance given by the EAT, which I would expressly approve."

James EAT p54: "The issue then is whether the way in which the contract is in fact performed is consistent with the agency arrangements or whether it is only consistent with an implied contract between the worker and the end user and would be inconsistent with there being no such contract. Of course, if there is no contract then there will be no mutuality of obligation. But whereas in the casual worker cases the quest for mutual obligations determines whether or not there is a contract, in the agency cases the quest for a contract determines whether there are mutual obligations."

Seems to suggest that even if not a sham one would still consider the way in which the contract is performed?

I accept that p.50 of the CoA says "The relevant question in such cases is whether it is necessary, in the tripartite setting, to imply mutual contractual obligations between the end user to provide the worker with work and the worker to perform the work for the end user."

I do of course bow to your superior knowledge on this issue.

Anne McAllister
Member - 124 posts

Thank you James for another priceless piece of valuable information.
The link worked fine and Im well impressed with whats on offer.
Cheers !!!