New UK Government guidance on employment law – including the gig economy

Hutchinson Thomas Employment Law

New government guidance has been introduced aimed at clarifying employment status for workers and businesses. This new guidance is intended to be a one-stop-shop for employees and employers to help them understand which employment rights are applicable in which cases.

Everyone who works in the UK is entitled to statutory employment rights. However, the rights you are entitled to depend on your employment status. So, both employees and employers need to be aware of which employment status applies in their case, in order to determine the correct rights and responsibilities that will apply. This means that every employee has rights, and every employer equally has responsibilities within a workplace.

The new guidance also provides clarity on the employment rights to those working in the so called ‘gig economy’ as well. This clarity comes about due to the landmark Uber Supreme Court Judgement (Apex court) which held that individuals in the gig economy can qualify as ‘workers’, meaning they too are entitled to core employment protections.

The UK government has further explained that the new guidance has been tidied up to help workers find out if they are being treated fairly by their workplace.

What is your Employment status?

A person’s employment status is what defines the rights and employment protections they are entitled to at work including pay, leave and general working conditions and, therefore, dictates the responsibilities that an employer owes to that worker. In employment law a person’s employment status helps determine:

  • their rights; and
  • their employer’s responsibilities.

Whenever an organisation employs a new employee, it is up to the employer to determine what type of employment status it is hiring them under. The employment status chosen is going to have a big impact on the way the employee works. It is important that both employees and employers understand the different types of employment status, so the most appropriate status is chosen.

The main types of employment status are:

  • Worker – this employment status is a very flexible arrangement and can vary greatly – as discussed below.
  • Employee – this employment status offers much more stability for both parties.
  • Self-employed and/or contractor – this employment status offers the worker the most freedom and flexibility but has less assurances regarding work continuity and rights from the organisation employing their services.

An individual is generally classed as a ‘worker’ if they have a contract or other arrangement (written or unwritten) to undertake work or services personally for a reward – i.e., money or benefit in kind – for a certain period.

It differs from being an employee because it means that they might only do the work occasionally for the employer in a casual or irregular fashion. Workers still have certain rights though, including getting the National Minimum Wage, the statutory minimum length rest breaks, holiday entitlement, as well as certain protection against unlawful discrimination and being forced to work more than 48 hours a week.

They may also be entitled to things like statutory sick pay and maternity, paternity or adoption pay – though not leave. However, certain other rights that are enjoyed by ‘employees’ are not legally required, though they may be agreed by an employer at the outset of the contract.

Someone classed as an ‘employee’ is an individual who works – either full-time or part-time – under an employment contract. All employees are workers; however, an employee has extra employment rights (as well as responsibilities) that do not apply to ‘workers’.

These include all the rights that workers have, plus statutory sick pay, maternity, paternity and adoption pay and leave, protection against unfair dismissal, the right to request flexible working, time off for emergencies, and statutory redundancy pay. They will also gain the right to join the company’s pension scheme. It should be pointed out, however, that not all of these rights will be automatically applicable from day-one of an employee’s contract.

Generally speaking, a person who is a self-employed contractor will not have the rights and responsibilities of an ‘employee’ or a ‘worker’, as they are considered their own boss. If they are contracted to do work for another organisation it is not classed as their employer, but rather as their client. The terms of their contract with the client will, therefore, determine these matters. However, they still have basic rights protecting their health and safety, and against discrimination of any kind.

The new guidance now brings together employment status case law into one place for businesses and individuals to access and has been published alongside a response to a consultation on employment status, where many respondents called for additional clarity around employment status boundaries and examples of how to apply the rules in different scenarios. This will support workers by improving their understanding of what rights they are entitled to at work, enabling them to have informed discussions with their employer and help them to take steps to claim or enforce them where necessary. It can be accessed by clicking here.

What about Micro-businesses, Start-ups and SMEs?

Importantly, this one-stop shop guidance is not just for workers – it also gives businesses the confidence and tools to better support their staff. By featuring real world examples of what an individual’s working day or contract may involve, and how that translates into their employment status, this new one-stop-shop guidance will help to ensure that the workplace is fair to its employees.

If you would like additional clarity around the employment status boundaries and how to apply the rules to different scenarios, do not hesitate to get in contact with us here at Hutchinson Thomas. We undertake a broad range of legal work serving both individuals and commercial clients. All our lawyers are specialists in their area of law, and for many services we offer a free initial discussion where we will discuss all your options with you.

Working with our specialised team, you will be guaranteed the highest quality legal representation by lawyers who understand your needs and exceed your expectations.

If you are looking to talk to a solicitor or just want to find out more, get in contact with us today: 01792 439000 or