Category Archives: contract of service

Changes to Worker and Employee Contracts – 6 April 2020

From 6 April 2020 there will be a right to a basic written contract written as a section one statement that applies to workers and employees alike.  This is in accordance with the Employment Rights (Employment Particulars and Employed Annual Leave) (Amendment) Regulations 2018.  Up to this point employees have the right to receive written terms and conditions within eight weeks of starting employment and workers may not have received any employment documentation at all.

The right to a basic written contract takes effect from day one of employment so ideally should be issued before employment starts.  Genuine self employed contractors are not included.  Agency workers will receive their documentation from the employment business that is contracting them to work with a third party employer.   

A basic written contract as a section one statement should include the following as a minimum:

  • The names of the employer and employee
  • The date the employment starts and period of continuous employment
  • Details regarding probation period – duration and conditions
  • Pay (or method of calculating it) and interval of payment
  • Details of any additional remuneration eg bonus, commission
  • Hours of work (including if fixed or variable; if varied how)
  • Days of the week required to work (including if fixed or variable; if varied how)
  • Holiday entitlement and pay
  • The employee’s job title or a brief description of the work
  • Notice periods
  • Place of work
  • Details on sick pay and leave
  • Entitlement to additional pay ie maternity pay, paternity pay
  • Details regarding training entitlement including if mandatory and if the worker/employee must pay for this

The law provides that the issuing of certain other additional terms may be given within two months of beginning employment.  This may be in the form of a supplementary statement sent to the worker or employee.  In the alternative they may be signposted as to where they can find this documentation eg on an intranet or via a request to HR. This includes information on:

  • Pension and pension schemes
  • Collective agreements
  • Information on grievance and disciplinary procedures

However, it might be good practice to share that information via the issuing of just one document. 

With this new legislation holiday pay for workers will be referenced via 52 week period rather than the current 12 week period.

If any of the information changes the employer must notify the worker/employee within one month. Revised contracts/statements do not need to be provided to the worker/employee automatically.  However, if one is requested this must be provided within one month of the request.

Employers should review their existing processes to ensure they comply with the law.

Employment Status – How to Distinguish Between Employed and Self Employed

The recent case of Stringfellow Restaurants Ltd v Quashie has highlighted the importance of distinguishing between employed and self employed workers.

Quashie worked as a lap dancer for Stringfellows and took them to an employment tribunal claiming unfair dismissal.  She alleged that she had the right to do so because she was an employee.  Although the tribunal found in her favour the case was overturned by the EAT who found that because she took the risk in terms of receiving payment from Stringfellows she did not have a contract of service.
When employing staff it is important to provide the right contractual paperwork which is reflected in how workers are used and given work.
With a contract of service the employer has a great deal of influence  over the worker in terms of the hours they work, where they work and how they do it.  The employer provides the equipment they use.  The worker has to do the work themselves for which they are provided with a salary as detailed in a wage slip.  In return the worker receives employment rights that they may challenge in an employment tribunal if unfairly treated depending on the situation and their length of service. 
A self employed worker is usually provided with a contract for service.  With this there is no obligation for the company to use their services.  The self employed worker should have the choice of where to work, which may be at their own premises or those of the company and should use their own equipment.  In no way should they be integrated into the company.  With the agreement of the company they should have the ability to choose the hours/days they work and may provide a substitute.  To receive payment they should invoice the company and manage their own tax and national insurance contributions liaising with HMRC.  They take the risk of whether they get paid or not,  chasing non-payment through the small claims court.  Furthermore they should obtain appropriate insurance such as professional liability and/or public liability.  They should be able to work for a number of companies without restriction.