Employment Law - Coursework Example

?EMPLOYMENT LAW WORK “It is often easy to recognise a contract of service when you see it but difficult to say wherein the difference [between it and a contract for service] lies.1 - Lord Denning The original tests of employment included the aspect of control, which further introduced the concepts of integration and economic reality.2 Further, there has been borrowing from American jurisprudence, and thus the following of what has been known as a multiple or composite test.3 Also, the judiciary seems to have laid its focus on the substance of the relationship rather than its form for its characterisation in law.4 Thus, a mutuality of obligation, together with elements of control, is usually seen as a prerequisite for a contract of employment to exist. However, it is important to understand that all employees are workers but not all workers are employees.5 There are two main definitions of the term ‘worker’ currently in use and both of them put within their ambit individuals who work/seek to work under either a contract of employment or any other contract providing for personal obligation towards another party.6 In other words, a worker is anyone, who works for another person (not necessarily under a contract for employment) other than in a professional or business relationship.7 Thus the different types of workers are as classified by law, and this is bound to have implications for employment rights. This is because; employment rights and responsibilities are based on employment status, and certain rights and responsibility apply only to ‘employees’ rather than ‘workers’.8 The trend however, seems to be to widen the scope of law by extending legal rights to ‘workers’ and removing differentiation between the two terms.9 It is fundamental to employment law that one is able to identify the relationship, whether it be that of an employee or worker or self employment or of an increasingly new variety of relationships that are coming up in the contract of employment.10 This is so, because while the legal arrangements involved could be of mutual satisfaction to the parties involved, it might not be well defined, thus making it difficult to categorise for legal analysis.11 Thus, it becomes necessary to analyse the various work relationships, under which it is possible to undertake work and the means through which they can be distinguished in law. These relationships under which, it is possible to undertake work include: I. Employees: The term ‘employee’ is defined in S. 230, ERA.12 The primary requirement is a contract of employment. However, to determine the existence of an employee-employer relationship, it is necessary to look at the control test, organizational test and the mutuality of obligations, along with an obligation of personal service.13 II. Directors: Directors are officers of the company. However, there is nothing to prevent directors from being employees. They can be employees, provided they have a service contract with the company, either express or implied.14 Besides, it is also important to look at the work conditions, mode of remuneration, and other legal requirements.15 However, it would be necessary to note on whether there has been use of the corporate veil to gain undue advantage, and if that has been done, to disallow the status of an employee.16 Thus, the status of a majoring shareholder or a director as an employee is affected, only if the employment contract is a sham.17 III. Business Consultants: It is seen that people who work in an advisory capacity are not always, strictly speaking, employees. Instead, they fall under the term ‘retainers’.18However, depending on the factual and legal arrangements made, a business consultant can be classified as an employee.19 IV. Office Holders: While an employment contract was a requisite to the work described above, a special category exists, who are not employed by virtue of contract of employment, and are known as office holders.20 Examples of such positions would include trustees, police officers, magistrates etc.21 An office holder has been defined as “a subsisting, permanent, substantive position which has its existence independently from the person who fills it, which continues, and is filled in succession by successive holders”.22 However, in cases where the holders have a contract of employment, it becomes necessary to consider whether any money paid was by way of salary for services rendered or whether it was an honorarium for work done in the capacity of a office holder.23 Further, to be considered as an employee, it is necessary that the employer has the power to dismiss.24 It was held by the EAT that there were three categories of officeholders,25 namely: i) Whose rights and duties are defined by the office they hold, and not by any contract (police officers). ii) Who, despite having the title of office holder, are in reality, employees with a contract of service. iii) Workers, who could possibly qualify as both employees and office holders (company directors, clergy26). V. Crown Employees: Courts have often held that crown employees are not employees, as they do not work under a contract of service; in fact being held that they do not work under a contract at all.27 However, recent domestic law has proceeded towards giving them not only a contractual relationship but moving all public employees as closely as possible towards the private sector.28 Thus, this means that since there is an intention to create legal relations, a contract of employment exists, enforceable by private law remedies.29 Even in cases, where a crown employee holds an office, which does not constitute a contract of employment, will be deemed to have so for the purpose of torts liability arising out of industrial action.30 VI. Agency Workers: Agency workers are unlikely to be the employees of the agency, especially when they work on a temporary basis.31 However, this is not a general rule, and the worker for an employment agency may, in appropriate conditions, be an employee, depending on the precise facts.32 VII. Workers’ co-operatives: Workers in a co-operative could be employees depending on the type of business and the nature of control; whether it being self discipline or employer direction.33 VIII. Armed Forces: Even the members of the armed forces have various provisions in the Employment Rights Act applicable to them, along with other Acts like Race Relations Act, Equal pay Act and the Sex Discrimination Act. Further, they can also go to an employment tribunal, without necessarily going through service redress procedures.34 IX. Temporary Employees: Temporary employees gain the same rights as any other employee, provided they have the appropriate length of service.35 This is important, especially when employees are employed on a temporary basis to replace someone, who is supposed to return after a period of time.36 There, it becomes essential that the employee has knowledge and is informed in writing that the employment will be terminated when the absent employee returns to work. Similarly, a contract of employment can also be retrospectively applied in the case of a temporary worker, if there is an expectation of the worker being permanent provides, all goes well, even though if the original engagement was made on the clear understanding that no contract of employment came into existence.37 X. Part-time Workers: A part time worker is defined as one who is paid wholly or in part by reference to the time he works, and having regard to the custom and practice of the employer in relation to workers employed by the worker’s employer under the same type of contract, is not identifiable as a full time worker.38 They are protected under the Part- time Workers (Prevention of Less Favourable Treatment) Regulations 2000. Further, a variety of case laws leads one to the conclusion, that as a matter of principle, part time workers must be paid the same rate of pay as comparable full time workers. Any other type of incentive should be not less than on a pro-rata basis.39 Further, any other difference with full time workers should be based on objective justifications.40 IX. Probationary Employees: Probationary employees may or may not be confirmed after a specified period, and this is a right retained by the employer.41 This naturally makes for a case of differential standard between probationary and permanent employees. Thus, the judicial standard has been towards following this view,42 while requiring the employer to give appropriate guidance and advice to the employee, in the form of a proper opportunity and warnings, in case of a lack of standards.43 XI. Trainees: It is clear that a trainee can be employed under a contract of employment, as ‘apprenticeship’ comes under S. 230, ERA which defines a ‘contract of employment’. However, it is not necessary that all trainees be so employed, and includes exceptions such as policemen44 In addition, there are work relations when the person providing the service is not an employee but under some sort of ‘training and learning’. This would include university students writing for a tutor.45 Thus, even if there is any contract existing between the parties, it would be one of training, enabling the applicant to acquire certain skills and experiences.46 XII. Apprentices: An apprenticeship differs from a contract of employment in that it is not terminable on notice, and if there are provisions in the agreement which is inconsistent with the employer’s normal terms and conditions of employment, it is the apprenticeship agreement which must prevail.47 The contract for apprenticeship must be signed and in writing and cannot be terminated by the employer except for grave misconduct or a refusal to attend to his duties.48 XIII. Domestic Servants: A domestic servant is also an employee, and the conditions of requisite period of continuous employment leading to appropriate statutory rights apply to him as well.49 XIV. Retainers: Retainers are not considered as employees, even though they are ‘on call’ and are paid, as employment involves work or other activity carried out for the employer.50 It was held that hours of work started only when the retainer went on duty following a call.51 However, this decision has been differentiated on a different set of factual conditions in which there was a continuous obligation throughout the night for nurses to be available.52 Thus, throughout the paper, we have looked at the different types of work relationships, under which it is possible to undertake work, and the legal benefits or protection available to the different categories. We have noticed the presence of legislations, along with judicial pronouncements, which aim to give as broad as possible a protection to the wider section of workers. Thus, despite the complexities and complications in different types of work relationships, it can be broken down to one of employment status and the corresponding rights and responsibilities regarding the same, and this helps in distinguishing them in employment law. Bibliography Books J. Bowers, A Practical Approach to Employment Law (Oxford University Press, Oxford, 2005) N. Selwyn, Selwyn’s Law of Employment (Oxford University Press, Oxford, 2008) S. Honeyball, Honeyball and Bowers’ Textbook on Employment Law (Oxford University Press, Oxford, 2004) Cases 102 Social Club and Institute v Bickerton [1977] ICR 911 Addison v London Philharmonic Orchestra Ltd. [1981] ICR 261. British Nursing Association v Inland Revenue (National Minimum Wage Compliance Team) [2001] IRLR 659. Franks v Reuters Ltd. [2003] IRLR 423. Hamblin v London Borough of Ealing [1975] IRLR 354. Lincolnshire County Council v Hopper [2002] All ER (D) 401. McMenemy v Capita Services [2006] IRLR 761. Post Office v Mughal [1977] IRLR 178. R v Lord Chancellor’s Department, ex p Nangle [1991] IRLR 343. Royal National Lifeboat Institution v Bushaway [2005] IRLR 674. Stevenson, Jordan and Harrison Ltd. v MacDonald and Evans [1952] 1 TLR 101 Suffolk County Council v Secretary of State for the Environment [1985] IRLR 24. Wiltshire Police Authority v Wynn [1981] QB 85. Statutes Companies Act, 2006 Employment Rights Act, 1996. Trade Union and Labour Relations (Consolidated) Act, 1992 Read More