10 characteristics that say employment not contractor

I’ve been working for businesses looking to engage consultants/contractors and drafting consultancy agreements recently. It’s key to remember that one of the characteristics of a contracting arrangement is that the business has less control over those working for it. Having one or two of the controlling characteristics may not mean that your arrangement with a consultant or contractor is closer to an employment contract than a consultancy contract but the more you have the more likely it is to be employment rather than consultancy or contracting.

It is important to remember that in employment law it doesn’t matter what you call the arrangement. If a tribunal looks at the way a contract operates and believes that it is operating as an employment contract or the individual is a worker and the arrangement whatever it is called is not a consultancy contract, the contractor may well have status as an employee or a worker and all the employment rights that go with that.
The following is a list of some of the characteristics that may be considered when deciding whether the arrangement is employment or consultancy:

IMG_20180413_160333.jpg1. Can the consultant provide a substitute or are they required to provide the service personally? A requirement to provide personal service suggests a contract of employment not consultancy.

2. Who decides how the consultant’s work is to be done – is the individual IMG_20180413_161434.jpgrequired to follow a set process to do the work or do they determine how they will perform the contract themselves.

3. WhIMG_20180413_160534o sets the hours worked – are they required to work hours dictated by the business. Employment requires the employee to work the hours the employer dictates, that is less typical of a consultancy arrangement.

4. Is there a uniform or a required form of dress? Again, requiring the individual to wear particular clothing suggests control is with the IMG_20180413_1557541523632825-picsaybusiness not the individual.

5. Do they have the freedom to reject work? A consultant or contractor may refuse work an employee may not.

6. How long does the arrangement go on for. A consultant may be engaged for a specific task and the contract would end when the task is complete. An arrangement continuing for an indefinite period where the consultant is allocated tasks on an ongoing basis looks more like employment.

7. How is the individual treated and represented to the business’s customers. A consultant who is treated like the employees and represented to customers as an employee may well be an employee.

IMG_20180413_155934.jpg8. Are they free to work for other organisations including competitors – restricting where an individual may work or requiring them to get consent before working elsewhere is more typical of an employment relationship.

9. Who provides the equipment they need? An independent contractor will usually provide their own equipment.1523632910-picsay

10. Who takes the financial risk? An employee is paid the rate the employer sets for the work agreed. A contractor sets their own rate but does not get paid if there is no work for them.

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Not for my daughter…

IMG_20180308_124452#internationalwomensday #timesup

This morning I read an article written by Sharon Needle of Needle Partners Limited referring to ‘He said what’.  It made me reflect on the strength of the many women in business I meet, all of whom I’m sure have had the same sort of comments and why now is the time to say that it is not acceptable:

  • for a careers teacher to suggest to a grade A student that a career as a legal secretary is a good alternative to getting a law degree and becoming a solicitor;
  • at any interview to ask if you have a boyfriend/ a husband/ a child/ plan to have any more children;
  • to tell a new mother returning to work that the chances of a mother getting promoted are almost nil;
  • to tell a colleague looking for a pay rise that she didn’t need one because her husband also worked;
  • for a judge to say in court how nice it was to see two lovely ladies in his court.

etc. etc

I and many like me have never spoken up about any of this, let alone take up the legal remedies that we know are there, but I sincerely hope it will now stop.  My 17 year old daughter will start her career soon.  She’s not as naïve as I was but she’s just as determined and I’d like to think she won’t have to put up with the all this ****.

 

What is a settlement agreement?

Settlement ag pictureMany organisations seem to be restructuring and reorganising at present.  Often they do at this time of year.

A new structure or a new boss can change an employee’s fit within an organisation.  if so, it may be that termination of employment for whatever reason is discussed.

If an employer wants to end an employee’s employment without having a fair reason or following a fair process, one way of achieving that is to offer a settlement agreement.  An employee cannot be forced or required to leave a job but a settlement agreement can be a solution for both employer and employee.  For employers, care is needed before embarking on such an offer, good HR advice is essential.  An employee may know nothing about the proposal until a meeting takes place and they are handed an agreement or its later sent to them.

What is a settlement agreement?

So, what is a settlement agreement.  It’s a formal contract setting out the terms on which employment will end.

What will it say?

The precise terms will depend on the situation but it usually covers:

  • the date the employment will end;
  • what will happen in the period up to termination;
  • what will happen about any holiday due or owed;
  • what will happen about any benefits, such as a company car, health insurance,  share options or other employee benefits;
  • what, if anything, the employee is required to do up to ending of employment or when it ends, such as completing a particular task or returning property;
  • a reference for the employee; and
  • a payment to the employee after the ending of their employment to compensate them.

What is different about a settlement agreement to other contracts is that employees must have legal advice for it to be binding.  The effect of the agreement is that the employee waives any claim that he or she may have to the employment tribunal.  Without legal advice that waiver and the agreement is not binding.

Why do I as an employee need legal advice?

Because of the imbalance in the relationship between employer and employee.  As the employee is waiving their legal remedies they need to be sure that both the compensation to be paid and the terms the employer is imposing are fair.

Who pays for the advice?

Usually the employer pays a contribution towards the fees.  Whether that will cover all the employee’s fees will depend on the amount offered and the extent of advice required.  Sometimes, the amount offered can be negotiated.

If you would like to discuss your settlement agreement call me on 0770 6351563.

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6 facts you may not know about St Valentine’s day and their (very loose) lessons in law

romance1.       St. Valentine is also the patron saint of beekeepers, greeting card manufacturers, fainting and epilepsy and protects travellers and happy marriages.

Epilepsy is likely to be a disability under the Equality Act 2010.  It is one of many disabilities that might be regarded as ‘invisible’.  Employers need to be particularly alert to disability that may be hidden.  Do not rule out that the possibility some conduct or behaviour may result from disability

2.       The British Museum has a letter that is regarded as the oldest valentine in existence.  Charles d’Orléans was captured by the English at Agincourt and kept prisoner for twenty-five years.  Whilst a prisoner he wrote poetry, including a St. Valentine’s Day note describing his sadness at being parted from his love.

During a redundancy process the possibility of alternative employment should be considered.  Employees may have skills you are not aware of.  Make enquiries about all your employee’s skills.

3.       Kisses are bisous in France, swsus in Wales, baci in Italy, Küsse in Germany, поцелуи in Russia, and 接吻 in Japan.

 In a 2012 case, the Employment Appeal Tribunal upheld a decision that it was an act of direct discrimination when an employer told an employee, who was Polish, not to “use her own language”.

 4.       In the 15th century the seat of emotion was thought to be the liver as well as the heart.  Burmese and Malay describe breaking your liver, not your heart.

The Health and Safety at Work etc Act 1974, requires employers to ensure a safe place of work and safe systems of work.  Clear rules about coming to work under the influence of alcohol or drugs and about drinking alcohol or drug taking while at work addresses risks associated by consumption of alcohol or drugs.  These are often covered in a Substance Misuse Policy.

5.       In Japan Valentine’ Day is celebrated by women giving chocolate to men..!  Fortunately, there is then “White Day”, on March 14 when men give cookies, candy or white chocolate.

Men and women should receive equal pay for equal work.  The UK has long had legislation enshrining that in law yet the gender pay gap remains.  The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 are a step to address this and come into force on 6 April 2017 and are mandatory for businesses employing more than 250 employees.

6.       In nineteenth-century Britain, some sent a “vinegar valentine” to those they did not like such as,

‘Tis a lemon that I hand you. And bid you now “skidoo”, Because I love another – There is no chance for you!’.

An employment contract includes implied obligations on the employer with regard to the self-esteem and dignity of the employee.  Case show that the use of foul and abusive language may breach that contract.   An aggressive or abusive management style may be a breach of contract.

Pimlico Plumbers and worker status

Pimlico Plumbers – couldn’t miss that photo opportunity – so the Court of Appeal ruled this morning on the employment status of a gentleman carrying out plumbing work for Pimlico Plumbers.  He had signed an agreement which stated that he was a self-employed contractor and not an employee or worker.

Many small businesses are considering engaging contractors to carry out work that is usually regarded as more appropriate for employees to perform.  This case illustrates that it is not always straight forward and the business owner needs to be careful and sure of exactly the relationship  they want and then be sure that the agreements and work practices fit that model.

Under the terms of that agreement he agreed to follow the Company’s procedures and working practices which were set out in a manual.  The manual stated that he was required to wear company uniform, work a 5 day week of at least 40 hours and give notice if he took leave.  He was required to call in regularly and be available for on-call work.  He was required to follow detailed procedures about time sheets, invoice procedures etc. and detailed conduct guidelines.  Failure to follow the procedures led to instant dismissal.  The plumbers were provided with a van and paid rental charges for its use.  He was required to provide his own tools and paid his own expenses and was personally liable for his mistakes.  Eight clauses in the agreement restricted the other work he could carry out during the agreement and for three months after.

The plumber became ill and was unable to continue working five days a week.  He asked to reduce his working time and this was refused.  His contract was terminated.  Amongst other claims he made a claim for unfair dismissal, holiday pay and for disability discrimination.

The decision today is significant because it highlights different rights and benefits of each category of employment status.  The employment tribunal decided that he was not an employee on the basis that there were insufficient mutual obligations between Pimlico Plumbers and the plumber.  Pimlico Plumbers were not obliged to give the plumber work and were only obliged to pay him when they were paid.  They did however conclude that he was a worker, because of the various requirements of the manual, the fact that it appeared that the plumber was obliged to do the work himself rather than being able to sub-contract with someone to work for him and because he seemed to be contractually obliged to work a set number of hours.  This decision was upheld in the Employment Appeal Tribunal and a further appeal to the Court of Appeal was lodged and the Court of Appeal gave its ruling today coming to the same conclusion today.

The consequence of this is that the plumber has no claim for unfair dismissal or in relation to other employment rights because he is not an employee.  He may however claim for disability discrimination, holiday pay and unauthorised deductions from wages as these are all rights workers enjoy.  All that can be costly.  With the Uber appeal pending this story will no doubt continue.

 

Are you ‘at risk’?

IMG_20170208_085918.jpg

Since Christmas I’ve had a few calls for advice from employees who have been put ‘at risk’ of redundancy.  I feel for them, just back from a Christmas break having spent too much on Christmas presents and then taken a New Year holiday as well – well I certainly did.  Return to work expecting to pay back on those hard-hit credit cards and suddenly (and for some out of the blue) the regular salary looks threatened.

Most of the time my advice has been to stay calm.  At risk does not mean you are redundant it just means that you may be.  It’s the start of a redundancy consultation.  It’s difficult but it’s important to try and be objective.  Redundancy is one of the fair reasons for dismissal but it must be a genuine redundancy and the procedure leading to the redundancy must be fair.  Mostly (but not always) there is a genuine redundancy situation.  The fairness of the process is often questioned.

As with all employment law there are some basic requirements but the crucial factor is often that of reasonableness.  The question is bearing in mind the resources available to the employer did the act in the way a reasonable employer might be expected to act.  It’s not what you or I would do but rather is it one of a range of things a reasonable employer might do in their particular circumstances.

With that in mind what should the employee at risk expect:

  • A pool from which those who may be made redundant are selected;
  • Individual consultation which gives them opportunity to make representations about the need for redundancies, their particular situation and the process
  • Objective criteria for selecting who within the pool may be made redundant, the criteria must not discriminate;
  • A consideration of whether there is suitable alternative employment available; and
  • A right of appeal if selected.

This means there are a number of opportunities for those who keep their heads to suggest alternatives to redundancy.  This may mean a proposal that makes the same savings to the wage bill but keeps jobs, such as reduced hours or some job-shares, different ways of working that may improve production or anything that may mean that redundancies are not essential.

Individually, your employer may not be aware of all your skills, there is opportunity to highlight these and find out about other roles you could fulfil.  If you feel this business is no longer for you use the additional time in the consultation period to consider what else you want to do and start going for it.

As I say, look at it objectively and try to keep positive.  Most redundant employees I see look back on it as having a positive impact on their lives.  Often though they were extremely stressed at the time.  If you can avoid that, all the better.

Can we talk? Five things you need to know about protected conversations

1485279892-picsayJanuary is one of the months when employers and managers return to work with renewed determination to resolve issues in their team. I’ve had a couple of clients who did just that and am pleased to say we’ve been able to get a quick solution using the protected conversation process. In these cases, it has been really helpful but there are pitfalls. So, what is it all about?
1. A protected conversation is an off the record discussion between employer and employee aimed at agreeing terms on which an employee may end their employment. It can be an extension of the without prejudice rule. Discussions of this type cannot be referred to in a subsequent unfair dismissal claim. This gives employers the opportunity to offer terms on which employment might end without fear that their discussions may later be referred to in tribunal proceedings if the negotiations fail. Successful negotiations would lead to a settlement agreement. For a settlement agreement to be valid and binding it must meet certain legal requirements.
2. If the employer acts “improperly” the protection does not apply and a subsequent tribunal may then decide they can hear evidence about the discussion.
3. Improper behaviour may be harassment or aggressive behaviour, victimisation or discriminating behaviour. It also includes putting undue pressure on the employee. Employers must therefore be careful about how the offer is presented and make sure the employee has the time to consider the proposal.
4. Protected conversation benefits are only of assistance in unfair dismissal claims. If an employee has other claims, including breach of contract or discrimination claims these conversations may still be referred to.
5. The conversation itself may be an act of discrimination so take care!
Often the pitfalls outweigh the benefits but for my clients this month it has been a successful approach resolving long-running grumbling issues without the upset of a disciplinary process.


		

Administration: What does it mean for employees

This week has seen two high profile retailers, BHS and Austin Reed, with many employees go into administration – what does that mean for employees of those businesses?

What is administration?

In simple terms, a company cannot pay its’ debts when they are due, the bank are no longer prepared to support them but it is believed that the business could be restructured or sold and remain viable in some form.  Administration gives the company time to restructure or find a buyer or take some other steps to maintain an ongoing solvent business.  An administrator is appointed to run the business whilst the options for the future solvent running of the business are explored and put into effect.  During the administration legal actions against the company, such as claims for payment of debts, are suspended.

What happens to employees following the appointment of the administrator?

The administrator has 14 days to decide whether to continue to employ any employee.

If they continue the employment after the 14 days the administrator pays ‘qualifying liabilities’, i.e. salaries, including holiday pay and pension contributions as a priority debt payable ahead of the administrator’s own fees and expenses.    The administrator may continue the employment until any restructuring takes place or may just continue for a short time, pending, for example, sale of stock.  Notice pay or redundancy pay are not qualifying liabilities.

If the administrator decides not to continue employment, the employment ends.  The employee then has possible claims for outstanding wages, holiday pay, notice pay, redundancy, breach of contract and failure to inform and consult.  These claims are however unsecured and employees rank low in the priority for payment.

In the event that employees are not paid by the Company the National Insurance Fund guarantees a basic minimum.  Claims from the Fund are made online by completing a Form RP1.

 

 

 

Tony Blackburn case and employment law

Another high profile ending of employment once again highlights some key employment issues.  The ending of Tony Blackburn’s contract with the BBC has once again highlighted misconceptions about employment law.

  • The nature of the arrangement between Blackburn and the BBC is unclear.  I suspect he is a contractor not an employee.  If so the BBC’s decision to end his employment may or may not breach that contract but it is the contract that defines whether there is a breach.  Only an employee has the right not to be unfairly dismissed.  Most contracts for services provide that they may be ended by giving a period of notice.  Beyond that the contractor’s remedies are limited.
  • From the information I have seen, the issue seems to be a question of honesty.  The BBC appear to dispute some responses he made to the Saville enquiry.  It does not appear to be about the incident that took place many years ago or any suggestion that Blackburn was involved in those incidents.
  • I heard the comment this morning, ‘what happened to innocent until proven guilty’.  This implies a perception that the standard of proof in such cases is that of a criminal court.  It is far from that.  The test is whether the employer acts reasonably or unreasonably in treating an incident as a sufficient reason for dismissing an employee.  Employment lawyers frequently hear from prospective claimants dismissed for an offence that they maintain they did not commit.  It is often difficult to explain that that is not the question, rather the question is was the employer’s belief that they did reasonable.
  • Dishonesty at work can be gross misconduct. Not surprising as an employer needs to be able to trust their employee.  If an employer has a reasonable belief that their employee has been dishonest, followed a fair procedure in coming to that conclusion and acted reasonably in all the circumstances a dismissal may well be fair.
  • The fact that the dishonesty was some time ago may not be a bar to dismissal.  If the employer discovers dishonesty some time after the event a dismissal may well be fair.  The most frequent example of such cases are where an employee has lied on their CV.  Dismissal in such cases may be fair.

It will be interesting to see how this story develops.

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5 Office Romance headaches

Apparently 1 in 3 of us have had a relationship at work but rIMG_20160212_151548783 (1) (2)omance in the office can be a real headache for business owners and HR managers.  Look out for:

  • an impact on performance.  Office romances can be distracting not just for the individuals concerned.
  • favouritism.  A romance between a manager and subordinate might lead to favouritism or the perception of favouritism.  Different standards or behaviour or performance by the employee involved with the manager may be accepted or perceived to be accepted creating disharmony which may lead to the loss of staff or even a claim.
  • inappropriate behaviour.  The romancing couple may leave other staff feeling embarrassed or uncomfortable with their behaviour.
  • abuse of seniority.  A junior may feel compelled to date a more senior colleague because of concerns that not to do so could be to their detriment.
  • Inconsistency.  Treating an employee differently or specially because of the relationship may lead to allegations of inconsistency of expectations of conduct or performance which may create a problem if action is taken regarding that conduct or performance.
Some organisations ban office relationships but that is probably unrealistic and might mean problems are more likely to arise as the relationship is hidden.  More realistic is to prepare for it and ensure your policies cover the actions you may take when it happens.  Areas that you may address include standards of behaviour, the possibility of moving one of the partners to the affair, a requirement that a manager should disclose any relationship they have with their subordinates or a sexual harassment policy that is publicised within the business and adhered to.  I have seen cases where the a more senior colleague has started a relationship with a junior colleague and the junior colleague has regarded it as harassment.  It’s a fine line.

 

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