News and Events

Extension of employment rights to some 'self-employed'

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The government announced yesterday that it would introduce a new power under the Employment Relations Bill to extend some or all existing employment rights to all workers, apart from those who are genuinely self-employed.

The extension is intended to bring agency workers and temporary workers within the mainstream fold of employment law protection (they already have rights under the NMWA and WTR, assuming they fall within the definition of 'worker').

Research carried out by the Business Research and Faculty of Law at the University of Cambridge demonstrated that 86% of 'workers' perceive themselves as employees. However, under the current (vague) tests for distinguishing employees from self-employed, only 70% of true 'workers' fell within the definition of 'employee', and the status of the remaining 30% was unclear.

Employers, particularly agency employers, currently avoid giving their workers 'employee' status by two principal methods:

(1) the widespread use in contracts of 'waiver' or 'relabelling' clauses purporting to determine status; and,

(2) the use of terms denying that the employer has an obligation to provide work to the worker.

The government's proposal would prevent employers from being able to stop many employees from accruing rights under the 1996 ERA. It would also lead to a reduction in workloads for Employment Tribunals, since the exciting preliminary appointments to determine whether a worker was employed or self-employed would reduce significantly in number.