Although all employees are workers, not all workers are employees and there’s no easy legal definition of a worker. Among other rights, workers are entitled to protection against discrimination and the national minimum wage but if you can’t define a worker, then who does the legislation apply to?
Now the employment appeal tribunal (EAT) has set out a useful test to help determine who is a worker. The case James v Redcats was a case brought by a courier for a catalogue company under the National Minimum Wage Act.
Redcats delivered parcels to her house, Mrs James then delivered them to private addresses using her own vehicle. Her pay was determined by the number of parcels delivered and she had the right to find a substitute if she was unable to deliver due to holiday or sickness.
Mr Justice Elias said the definition of a worker found in the National Minimum Wage Act is identical to that found in the Working Time Regulations and the Employment Rights Act.
Once it is determined that there is no contract of employment, to decide if someone is a worker it is necessary to consider whether there is:
- A contract to perform work or services
- An obligation to perform the work or services personally
- Whether the individual is performing the work or services in the course of running a profession or business and the other party is a client or customer.
These tests are – intentionally – extremely broad. The EAT gave guidance on points two and three, together with mutuality of obligation.
On whether there was a personal obligation, the EAT said that this is unaffected by the ability to provide a substitute if the worker is sick or on holiday. The key is that the substitute option is only available if the worker is ‘unable’ to work – not ‘unwilling’.
An individual does not need to have a pre-existing business for them to be viewed as being engaged in a business undertaking. The EAT took the view that the best approach would be to consider the dominant feature of the contractual arrangement.
For instance, if the dominant feature is personal service, then the contract will lie in the employment field, while if it is a particular objective or outcome then the contract will be in the business arena.
In the past, it had been decided that if someone only works from time to time but there is no mutuality of obligation in the breaks (for the employer to provide work, for example) then the individual could not be a worker. The EAT criticised this, saying that the point to consider is the person’s status when they are working, not when they’re not.
Mr Justice Elias said the issue particularly affected casual and seasonal workers, adding: “There is no reason in logic or justice why the lack of worker status in the gaps should have any bearing on the status when working. There may be no overarching or umbrella contract, and therefore no employment status in the gaps, but that does not preclude such a status during the period of work.
“If casual and seasonal workers were to be denied worker status when actually working because of their lack of any such status when not working, that would remove the protection of minimum wage and other basic protections from the groups of workers most in need of it.”