Employment law

• The Equality Act 2010 is the main piece of legislation that protects employees from discrimination.
• The Employment Rights Act 1996 (ERA) defines an employee as an individual who has entered into or works under a contract of employment, also called a contract of service.
• A complaint of discrimination can be brought before an Employment Tribunal which can make a declaration of the employee’s rights, award the employee compensation and order the employer to take steps to remedy the situation.
• An employer can show the nature of a job makes it essential to employ people with certain characteristics.
• An independent contractor is a person who runs his own business (self-employed) and may also work for others under a contract for services.
• In deciding whether a person is an employee or an independent contractor, the courts will take into account various factors.
• The wording of any contract between the parties, referring to someone as an ‘employee’ or ‘independent contractor’ or ‘rider’ or ‘driver partner’, is a factor in determining employment status.
• The greater the degree of control over a person, how, when and where he works, the more likely that he is an employee.
• An obligation on one person to provide work for another and an obligation on that person to perform that work is required for a contract of employment to arise.
• The payment of wages (rather than fees) and statutory employee payments such as a pension, holiday and sick pay, usually indicates an employee.
• The greater the freedom a person has to delegate his duties, the less likely he will be considered to be an employee.
• Employees are normally provided with the tools and equipment to do a job whereas independent contractors normally provide their own.
• A person required to wear a uniform is more likely to be considered an employee.
• A person who can work for more than one person is more likely to be an independent contractor than someone who works for only one person.
• A person who can rely on an employer’s support staff and facilities is more likely to be considered to be an employee.
• The longer the working relationship between the parties, the more likely the person will be an employee.
• Statutory employment protection is given to employees, such as sick pay, redundancy pay, pensions, holiday pay, maternity and paternity pay, and protection from unfair dismissal.
• Some rights and duties implied into a contracts of employment generally do not apply to contracts for services.
• Employers are vicariously liable for the torts of employees committed during the course of their employment but are not liable for the torts of independent contractors.
• In the event of a company employer’s liquidation, an employee has preferential rights to outstanding salary and redundancy payments.
• An employer must deduct tax from an employee’s salary, pay national insurance contributions etc.
• An independent contractor is responsible for his own tax, national insurance etc.
• There is a third category of ‘worker’ who is a self-employed person performing work personally.
• This ‘worker’ is entitled to some basic rights: minimum wage and working time.
• Redundancy under the ERA is when an employee’s employer ceases to carry on business, ceases to carry on business in the place the employee is employed, or the requirements of the business means there is a reduction in the need for employees to carry out work of a particular kind, i.e the employer demonstrates the employee’s job no longer exists.
• The non-renewal of the fixed-term contract of an employee recruited as maternity leave cover is potentially fair, and the employer is allowed to bring evidence proving that the dismissal was reasonable on all the facts.
• Redundancy pay follows the same formula as unfair dismissal compensation, it is based on the number of years worked up to a maximum of 22 years, dependent on age: Under 22 years old: half a week’s pay for each full year worked. 22 –41 years old: one week’s pay for each full year worked. Over 41 years old: one and half week’s pay for each full year worked.
• Any claim must be brought within 3 months of the effective date of termination.
• An employee can bring an action for damages in the civil courts for breach of contract for wrongful dismissal.
• A tribunal may make an award of compensation (capped, based on length of service) and/or order reinstatement or re-engagement.
• Redundancy is a potentially fair reason for dismissal, so the claim of unfairness relies on proving that the process of selection for redundancy was unfair, for example, the employer selected all the pregnant women for redundancy.
• Where a redundant employee considers that they have been unfairly selected for redundancy, they can make a complaint to an Employment Tribunal for unfair dismissal.
• If a person employed for 2 years is made redundant, they will be entitled to (capped) statutory redundancy pay.
• Wrongful dismissal is a common law claim for breach of contract, arising where an employer breaches an express or implied term in an employee’s contract of employment which entitles the employee to notice of dismissal.
• The usual rules of contract apply regarding breach of contract and mitigation of damages, meaning that the employee must try to minimise the loss from the breach, i.e must try to find alternative work as soon as possible after dismissal.
• As with any breach of contract claim, the aim of an award of damages made by the court is to put the employee in the position he would have been in had the contract not been breached.
• Automatically unfair reasons for dismissal (and unfair selection for redundancy) cannot be justified, including dismissal on grounds of gender, marital status, sexual orientation, race, disability, religion/belief, age, pregnancy and membership of a trade union.
• Unfair dismissal is a statutory claim under the ERA, where an employer refuses to give reasons for dismissal or gives inadequate/untrue reasons for dismissal, an employee who has been employed continuously for 2 years can make a complaint to an Employment Tribunal for unfair dismissal.
• Unfair dismissal is not a claim for wrongful dismissal, as the employer is allowed to provide reasons justifying a potentially fair reason for dismissal.
• If an employee is dismissed without notice, or forced to leave without notice, that is a wrongful dismissal.