Clamp down for employers who call a spade a shovel

Ride hailing app Uber has won attention for revolutionising the taxi business worldwide, but is now grabbing headlines for different reasons, following legal action by drivers claiming workers' rights.

The GMB Union brought the action on behalf of a group of Uber drivers, who are described as self-employed 'partners' by Uber. The action argues that as Uber pays the drivers and effectively controls charging rates and the route taken, they owe the same responsibility as any employer does to its workers, including the minimum wage, paid leave and making sure drivers take rest breaks. If successful, Uber could be forced to compensate drivers for past payments, as well as future.

Anything Uber-related attracts attention, following its meteoric worldwide growth, but the problem highlighted is one that UK companies need to consider as they seek efficiencies in staffing.

Many organisations do not recognise that even where someone is not an employee, they may still be categorised as a 'worker' and be entitled to certain rights such as the minimum wage and paid holiday. Employees are also 'workers', but with extra employment rights and responsibilities.

To tackle the problem, the Government has launched an online tool to help employers and individuals to identify their status.

The definition of a worker in the Working Time Regulations 1998 is someone who works under a contract of employment, or any other express or implied contract, to provide work or services personally for a reward and who cannot send someone else to carry out the task. There are some exceptions on sub-contracting of work, and also where services are provided by an individual through a limited company, however, it means that many casual, freelance or self-employed workers may be treated as workers. In one case that reached the Employment Appeal Tribunal, a self-employed joiner working exclusively for a firm of building contractors, was found to be a worker, despite providing his own hand-tools and paying his own tax and national insurance.

Similarly, many think that calling someone an intern will confer a special status, but it's much more likely they too will be a 'worker' or an employee. So, what counts when deciding whether an intern is due to be paid?

• If someone is acting as a shadow, watching someone at work, and not undertaking anything on their own that could be seen to be of benefit to the company, they are not likely to be a worker
• If they can come and go as they please, and are not required to do a certain amount of work, they may not be classified as a worker. A shorter term placement is also likely to support this.
• If they are a student and undertaking work experience of less than a year as part of a UK-based further or higher education course, they are exempt from the national minimum wage, although the Government is encouraging all employers to pay interns irrespectively.
• Voluntary workers may not be entitled to the minimum wage if they're working for a charity, voluntary organisation, associated fund-raising body or a statutory body and they receive only limited benefits such as travel or lunch expenses

Said Mark Ridley, employment lawyer at Band Hatton Button solicitors: "When employers come up with different ways of contracting for services and staffing to make efficiencies, it's not necessarily a bad thing for workers, who may themselves be seeking greater flexibility, for example, but both sides need to be clear. What's important is recognising that the way that the company and an individual interact will determine the outcome on employment status, rather than simply the title that's given to someone."

He added: "It's a complex area, and even something that seems clear-cut may not prove to be so - such as a case where someone working through an agency has been able to satisfy the conditions for employed status. If it reaches an employment tribunal, they will be looking at the intentions of both sides, as well as whether a person provides their own equipment, has some form of financial risk or is integrated into the business."

ENDS

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This is not legal advice; it is intended to provide information of general interest about current legal issues