Employment status questions can arise in relation to staff taken on a temporary or casual basis. Depending on their work pattern, they might be employees or workers and their rights will change accordingly. If you are engaging someone to work for you on a regular and consistent basis over a period of time, with a set number of hours’ work guaranteed per week and a expectation both that you will give work to them and they will accept it, it is likely that they will be regarded as an employee. If you are engaging someone on a genuinely casual basis, without an obligation to give work to them or requiring a commitment from them to work such hours that may be offered, that individual may only be a worker, but it would still be sensible to confirm the terms on which they are engaged by you to avoid any uncertainty or dispute arising in the future. Employers often assume individuals can work for them on a self-employed basis, but in our experience this can be a misconception and the individual would need to genuinely be in business on their own account and have a great deal of control over how the work or project is delivered. It is important to remember, however, that whatever documentation you have in place, the reality of the working relationship will always be scrutinised in the event of any challenge to employment status.
“TUPE” stands for the Transfer of Undertakings (Protection of Employment) Regulations. It is a powerful piece of law designed to protect employees when a business changes owner, including against changes being made to terms and conditions of employment.
The size of the business doesn’t matter. When TUPE applies, the employees’ jobs, their terms and conditions, and continuity of employment all transfer across to the new employer.
TUPE can be complex, so we suggest taking specialist advice from our team at an early stage if you’re looking at any deal where the employer is likely to change. In particular, there are significant financial penalties for failing to consult and inform employee representatives or trade unions; and it is important for the buyer to understand risks associated with the transferring employees, including the limitations on changing terms. A seller must also be aware of the employee information they are obliged to provide to a seller and the timescales for doing so.
There are a range of minimum legal rights in the UK that are often described together as ‘family friendly rights. Of course, many employers go beyond the legal minimum as part of their efforts to be an attractive employer, to recruit staff from as diverse a pool of talent as possible, and to retain them.
The key legally is to ensure that you get the drafting of your employment contracts and staff handbook correct, for what you need to achieve operationally. The main rights are summarised below.
For all of these issues, it is important that you review your contracts and staff handbook from time to time to ensure they a) meet minimum legal requirements and b) address your recruitment and retention needs in a competitive recruitment market.
Secondly, these are matters that can give rise to tribunal claims for discrimination. We can help you review your policies so that discrimination is not inadvertently built in to them, but also to advise you if you do receive a complaint.
Most employers will know that when an employee takes time off to have a baby they may be eligible for Statutory Maternity Leave (maximum 52 weeks) and Statutory Maternity Pay (SMP). SMP is currently paid for up to 39 weeks. The Government publish the current rates here: https://www.gov.uk/maternity-pay-leave/pay
Similar rules apply for an employee taking time off to adopt a child or have a child through a surrogacy arrangement, who may be eligible for Statutory Adoption Leave and Pay.
Awareness of Statutory Paternity Pay and Leave is also growing. When an employee takes time off because their partner is having a baby or adopting a child, they may be eligible for one or two weeks paid Paternity Leave. The Government publish the current statutory pay rates here: https://www.gov.uk/paternity-pay-leave/pay
Finally, we also now have the ability for mothers and their partners to share leave, under the rules on Shared Parental Leave (SPL) and Statutory Shared Parental Pay, where they’re having a baby or adopting a child. This increases the flexibility for employees. For employers, the administration can be tricky to grasp. You should also review your policies in respect of any enhanced maternity pay you give to female employees, versus what you would pay a male employee taking Shared Parental Leave, as this is a discrimination risk.
Employees are allowed ‘reasonable’ time off to deal with an ‘emergency’ involving a ‘dependant’. As you can see, there are some definitions that you may need to take advice on. As an employer you don’t have to pay staff for this time off, although many employers do. This is where getting the contract and staff handbook right is important.
All employees (not just parents and carers) with 26 weeks service now have a legal right to apply to you to request flexible working. Typically this is to change hours, start or end times, or work location.
The key to handling a request legally is to consider it in an open-minded and ‘reasonable’ manner. An employee can make a tribunal claim connected to this right, typically where an employer hasn’t:
Requests can be rejected on good business reasons, but it is important to follow a fair process first.
In our experience, this is not used that often. Eligible employees (key points being a years’ service; and parental responsibility or named on the child’s birth or adoption certificate) can take unpaid parental leave to look after their child’s welfare. The entitlement is to 18 weeks’ leave for each child or adopted child, up to their 18th birthday (with a limit of 4 weeks for each child in any one year). There are notice and delaying rules, that we suggest you include in your staff handbook.
As well as employees, ‘workers’ are also entitled to the statutory minimum leave entitlement. Do ensure that you regularly review employee and worker status in your organisation.
Workers are legally entitled to 5.6 weeks paid holiday per year. You can include bank holidays as part of the statutory annual leave, they do not have to be given as paid leave.
For someone working 5 days per week, this means you must give at least 28 days paid annual leave (the equivalent of 5.6 weeks). Of course some employers give more than the minimum.
A part-time worker will get less paid holiday than a full-time worker. People who work irregular hours (e.g. term-time work, or work with shift patterns) also need to have their leave calculated carefully. Take advice if you need help with calculating this fairly.
Common pitfalls in managing holiday legally can be managed by getting the drafting of your employment contracts and staff handbook correct, for what you need to achieve operationally. Those pitfalls include:
For most South West SMEs, at the moment, no you don’t have to publish data under the ‘Gender Pay Gap Reporting’ rules. However, even if you run a small business, please don’t be complacent about the way you set pay rates – there is still potential for expensive claims if you get this wrong.
The biggest employers in the South West will know that if you employ 250 or more people, you are obliged to publish annual data on the gender pay gaps within the workforce.
If caught by the rules, each organisation’s data has to be uploaded to a Government website. Our specialist team can help with this reporting.
Employers of any size should bear in mind that pay information can already be used as evidence to support legal claims for Equal Pay – an entirely separate piece of law (this is often confused).
The Equality Act 2010 implements the principle in the UK that men and women should receive “equal pay for equal work or work of equal value”. We have recently seen a further judgement in a multi party claim involving Asda allowing claimants in their retail stores to compare themselves (for equal pay purposes) with higher paid men who work in the supermarket giant’s distribution centres, but it is the same legal principle whether you run Asda, or one local shop.
With mandatory reporting raising the profile of pay differentials, all employers should consider reviewing the methods they use to set pay rates in their business.
On the face of it, paying the NMW correctly appears simple, but it isn’t necessarily so!
The hourly rate for the minimum wage depends on age and whether the person is an apprentice. Your staff must be at least school leaving age to get the NMW; or aged 25 to get the National Living Wage (or NLW, a higher rate). The NMW will still apply for workers aged 24 and under. The Government publish the current rates here: https://www.gov.uk/national-minimum-wage-rates
The NLW shouldn’t be confused with the Living Wage suggested by The Living Wage Foundation, which has no statutory authority.
Common pitfalls in administering the NMW/NLW correctly include the following. Do take advice if you’re unsure:
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