Employment Law Coursework PDF

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Employment Law Coursework LAW08103 Sean McGrouther

The sources of employment law come mainly from common law and statute. Common law comes into place where statute has not covered everything. The following discussion will determine whether or not drivers and deliverers for companies such as Uber and Deliveroo could be classed as employees. In order to determine this, we must first look at employment status as a whole, in relation to the Employment Rights Act 1996.1 When looking at the employment status of a person we have to understand what rights, if any, they have in relation to their employment. We must also understand the relationship between employee and employer, which would often be the compelling argument to determine one’s employment status. Several court tests have been put into place to differentiate the different types of employment, namely, the multiple test and the mutuality test. The two main sources of employment law come from common law and statute. Common law is used when legislation set by the court isn’t clear or specific enough. Common law ideas can extend the rules of statute. Statute is law which has been passed by the parliament and must be abided by. The most significant source is The Employment Rights Act 1996. Both these sources come into play in explaining the distinction between a worker and an employee. The first thing to look at is the different types of employment status; contract for services and contract of service. The former means that you are selfemployed which means that you carry the entirety of the risks involved. You are not guaranteed work and you are responsible for any defective work. At the other end of the spectrum, we have a contract of service, which means that you are an employee, stated in the Employment Rights Act 1996 s230 (1)2. As an employee, you are entitled to the national minimum wage3 and guaranteed hours. You are also entitled to a pension and statutory sick pay, which are minimum requirements.4 So, if your employer provides regular and permanent work for you, which you cannot turn down, then this likely means you are an employee. Even more so if your employee pays your taxes and national insurance on your behalf. However, if your employer has no control over where and when you work, then you may still be employed but as a worker and not an employee. The recently formed term ‘worker’ has come into place to act as a middle man to being self-employed, or employed. Important rights such as unfair dismissal5, redundancy payment6 and notice of termination7 are restricted to those who have a contract of employment. To tell the difference between the different types of employment, the court has come up with several tests. One of the oldest tests is the ‘control test’. Before, if an employer could tell the employee what to do and how to do it, this would be sufficient enough to create a contract of employment. An example of this test took place in Performing Right Society v Mitchell and Booker.8 The judge in this case had to determine whether or not a band hired by Mitchell and Booker were employees, or self-employed in order to sue the correct party for infringement of copyright. It 1 Hereinafter referred to as the ‘1996 Act’ 2 1996 Act s230 (1) 3 National Minimum Wage Act 1998 4 Equality Act 2010 5 1996 Act s94 6 1996 Act s135 7 1996 Act s86 8 Performing Right Society v Mitchell and Booker [1924] 1 K.B 726

was eventually held that the band were in fact employees, so Mitchell and Booker were held responsible for their actions. This decision came from the fact that the band was under control, and the owners of the dance hall could specify what music was played. The problem with the control test is that it has become outdated and is not suitable for more developed and sophisticated types of employment.9 Because of this, the ‘multiple test’ was introduced. This is a much more flexible test that has been used to deal with many sorts of employment. This test takes many considerations into facto such as the degree of control, provision of equipment, financial risk, income tax and national insurance and mutuality of obligation. The leading case for this is Ready Mixed Concrete v Minister of Pensions and National Insurance.10 The Judge in this case, Mackenna J, provided a definition of when a contract of service exists; “(i) the servant agrees that in consideration of a wage or other remuneration he will provide his own work and skill in the performance of some service for his master; (ii) he agrees, expressly or impliedly, that in the performance of that service he will be subject to the other's control in a sufficient degree to make that other master; and (iii) the other provisions of the contract are consistent with its being a contract of service.”11 It was held in this case that the appellant was a self-contractor, and not an employee due to the fact that not all of these conditions were met. Whilst this case defines what it takes to be an employee, it is also a starting point in determining whether or not drivers for Uber and Deliveroo are employees. To help understand this a little more, we must look at the mutuality of obligation. Mutuality of obligation asks the question of is the employer required to provide work when it is available and is the individual required to do it when it is provided. By this, both parties are gaining something out of the contract. This was applied in Carmichael v National Power plc.12 It was held here, that there was not a contract of service as there was no reliance by either party on the other party. There was no mutuality. A similar outcome appeared in Montgomery v Johnson Underwood13 where it was held that there was no obligation on the employer to consider an agency worker an employee. The opposite outcome came in Autoclenz ltd v Belcher.14 The appellants (employer) appeal, that the respondents were workers and not independent contractors, was dismissed. The workers in this case were car valeters who claimed that they were workers under the National Minimum Wage Regulations 199915, and were entitled to minimum wage and holiday pay. The workers had to pay their own tax and national insurance, however, the employer told them how to carry out their work, their rate of pay, provided cleaning materials, prepared their invoices and required notice of when they were unable to work. This led the court to the decision that they were employed as workers and were not self-contractors. This brings us onto determining whether or not drivers for Uber and Deliveroo are employees or not. We have, as previously mentioned, a new type of employment, known as workers. Along with this new type of employment, comes a new term for it; ‘flexicurity’. This deals with the idea that we no longer have a sharp division between being self-employed 9 Understanding Scots Law 2nd Edition, W. Green 9-06 10 Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497 11 Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497 12 Carmichael v National Power plc [2000] I.R.L.R 43 13 Montgomery v Johnson Underwood [2001] ICR 819 14 Autoclenz Ltd v Belcher [2001] ICR 1157 15 National Minimum Wage Regulations Reg.2(1)

and being an employee. Flexicurity basically means that you have flexible working hours but with some security, although not as much security as an employee. One of the main protections a worker is entitled to is protection from discrimination.16 Workers are protected from sexual discrimination and racial discrimination17 but are also entitled to equal pay.18generally, a worker will be someone who is under a contract personally to do work but is protected against discrimination and relies on a certain extent to the business for work. The term is defined in the Employment Rights Act.19 An example of someone claiming to be a worker came in Smith v Hewitson.20 Here, it was argued that people serving snacks on buses/trains are to be considered workers, or self-employed. In this case, the individual would bring their own trolley and stock with their own supplies. The only degree of reliance was whether or not the driver would let them on, to which they had no obligation to. Therefore, the outcome was that the individual was selfemployed. Compare this to Byrne Brother v Baird21 and we have a different outcome.in this case, labourers were held to be workers. Although they had to supply their own tools, this wasn’t the sort of work they could just do anywhere. They also required direction, and a contract of sorts, leading the judge to class them as workers. As for drivers for Uber, they are, by court orders, classed as workers thanks to Aslam and Others v Uber BV.22 The court held that drivers for Uber were workers, as defined in the Employment Rights Act.23 This hearing came about after Uber failed to pay minimum wage and paid leave. As a driver for Uber, you can work whenever you want. You have no obligation to accept work either. The way Uber works, is that once the driver’s app is switched on, they will receive a message, or an offer, for work. Said driver has ten seconds to either accept or if they want, reject the offer. In which case, the offer would be sent to someone else. This fits in with the term ‘flexicurity’ as by definition, there cannot be any more flexibility than this. Going by this alone, the driver could maybe be classed as a worker. However, the app is the only medium in which the driver can get work. They cannot accept work any other way. It was stated that as long as the app was switched on and they were in the territory in which they were allowed to work, they would be classed as workers. However, drivers for Uber are still not classed as employees. Being a worker means that you are entitled to some of the rights an employee is entitled to and are protected from discrimination but they are not protected from the likes of unfair dismissal, minimum notice of employment ending, or redundancy pay.24 With Deliveroo, although they work on a similar basis to those of Uber, they are still classed as self-employed. As of yet, there is no case law to support the idea that they are workers so therefore are not entitled to any rights that a worker may get. A quick search will tell you that they are paid on how many deliveries they do. Work is not guaranteed. Work is very flexible but as mentioned, not guaranteed.25 Without any case law to support the idea that they could be workers, we cannot say they are workers. But if we were to compare working for Deliveroo to the Aslam case, it could very well be argued that they are workers 16 Equality Act 2010 s4 17 Race Relations Act 1965 18 Equal Pay Act 1970 19 1996 Act s230 (3) 20 Smith v Hewitson EAT 17 September 2001 21 Byrne Brother v Baird [2002] ICR 667 22 Aslam and Others v Uber BV and others [2017] IRLR 4 ET 23 1996 Act s230 (3) 24 1996 Act s94 25 https://www.indeed.co.uk/cmp/Deliveroo/reviews

and should be entitled to the national minimum wage and have protection against discrimination. To summarise, we do have different types of employment, all regulated by the Employment Rights Act. Being self-employed is self-explanatory. You are responsible for everything you do, pay your own tax, national insurance and are not entitled to any employment rights. Being employed means that you are entitled to many rights such as minimum wage, sick pay, holiday pay etc… and your tax and national insurance is paid for on behalf of your employer. Then we have the worker. Not self-employed but not completely employed. They are entitled to some rights, namely minimum wage and protection against discrimination but it doesn’t go much further than that. Work can be on your terms, in that it is very flexible. The main differences between a worker and an employee are the rights entailed, and the flexibility of work. An employee has set hours, a set rate of pay and full security. Going by this, drivers for Uber are classed as workers and entitled to the rights a worker is entitled to, set out in the Aslam case. The same cannot be said, as of yet about deliverers for Deliveroo.

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Employment Law Case and Statute List Table of cases Performing Right Society v Mitchell and Booker [1924] 1 K.B 726 Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497 Carmichael v National Power plc [2000] I.R.L.R 43 Montgomery v Johnson Underwood [2001] ICR 819 Autoclenz Ltd v Belcher [2001] ICR 1157 Smith v Hewitson EAT 17 September 2001 Byrne Brother v Baird [2002] ICR 667 Aslam and Others v Uber BV and others [2017] IRLR 4 ET

Table of statutes Employment Rights Act 1996 National Minimum Wage Act 1998 Equality Act 2010 National Minimum Wage Regulations Race Relations Act 1965 Equal Pay Act 1970

Employment Law Bibliography

Books Understanding Scots Law 2nd Edition, W. Journal Articles

Websites https://www.indeed.co.uk/cmp/Deliveroo/reviews...