Tutorial 2 – The Employment Relationship: Employment Status
1. What distinguishes employees from other types of workers? Why is that distinction important?
While in the past an employee’s status was not a source of uncertainty, as the ‘servant’ and ‘master’ relationship was clearly defined by the socio-economic factors influencing society, nowadays more and more people fall into a ‘grey area’ where it is hard to distinguish whether a person can be classified as an employee, worker, or just being genuinely self-employed. As the Employment Rights Act (1996) provides little assistance in determining an individual’s employment status, the courts have developed a number of tests in order to help them determine this. These five tests (control test, integration test, economic reality test, mutuality of obligation and multiple test) examine the relationship between the employer and the employee - or decide if there is one - by looking at elements such as what degree of control the employers has over an individual, the extent to which the work performed is a core part of the employers business, how economically independent the employee is in performing his work and whether or not there is a mutuality of obligation between the two parties. The courts will take in consideration not only what is stated in the contract of/for services but also other factors such as whether the individual is on a payroll or if s/he has to send invoices to the company, if work is offered consistently and what the customs are in a specific industry. The courts will also examine if the contract was terminable on either side without notice and if the employee or individual contractor had the option to refuse work.
The distinction in employment status is significant as it establishes whether or not an individual benefits from specific forms of statutory protection. Such statutory rights include but are not limited to the general duty of care that all employers owe their employees, a duty...
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