Exam (1~2)

Explain how differences in employment status are affected by employment law. Concerning Common Law tests, provide supporting arguments on its application to two: part-time workers, fixed-term workers, and casualised employees.

Introduction

Employment law constitutes a comprehensive and extensive framework that defines the rights and responsibilities of employees and employers in the United Kingdom (Sargeant & Lewis, 2020). This framework covers a diverse array of statutes, regulations, and case law intended to safeguard workers’ rights, promote fair treatment, and advocate for health and safety in the workplace (Barnett et al., 2020). Critical aspects of UK employment law include the minimum wage, working hours, equal pay, discrimination, health and safety, and dismissal procedures (Taylor & Emir, 2019). It is essential to understand the distinctions in employment status, as such differences directly influence the extent to which individuals are entitled to various employment rights and protections (Deakin & Morris, 2012). Employment status can broadly be categorised into three groups: employees, workers, and self-employed individuals (Bogg, 2019). Each category provides a unique assortment of rights and entitlements, as mandated by UK employment law (Cabrelli, 2021). Employment status differences and supporting arguments will be examined by applying UK employment law to part-time workers (PTW) and fixed-term workers (FTW), emphasising Common Law tests. Common Law tests are pivotal in determining an individual’s employment status and, consequently, the applicable rights and protections (Painter & Holmes, 2015). By evaluating these specific areas, the implications for both employers and employees in the modern workplace will be explored.

Part-Time Workers

PTWs work fewer hours than full-time employees, typically less than 35 hours per week (Burchell et al., 2014). They may engage in work patterns, including job sharing, flexible hours, or term-time-only contracts (Fagan et al., 2014). Under UK employment law, PTWs are classified as employees or workers by work type and contractual relationship with the employer (Sargeant & Lewis, 2020). To determine PTW employment status, Common Law tests such as the control, integration, and mutuality of obligation tests can be utilised (Pyper et al., 2018). The control test assesses the degree of control an employer has over a PTW, weighing factors such as when, where, and performance. The integration test determines whether a PTW is integral to an employer’s core activities. The mutuality test examines the ongoing obligation between an employer and the PTW to offer and assume work. Such an obligation may indicate an employment relationship (Taylor & Emir, 2019).

Two cases exemplify the application and implications of these tests. In British Airways v Williams (2012), the European Court of Justice determined that PTWs should receive pro-rata paid annual leave based on working hours. This reinforced the principle of equal treatment of PTWs (Part-Time Workers [Prevention of Less Favourable Treatment] Regulations, 2000; British Airways v Williams, 2012). In Matthews v Kent and Medway Towns Fire Authority (2006), the Court of Appeal ruled in favour of the part-time firefighters, acknowledging that exclusion from a pension scheme constituted less favourable treatment than full-time colleagues (Matthews v Kent and Medway Towns Fire Authority, 2006). This highlighted the importance of ensuring that PTWs are not subject to unfair treatment or discrimination.

Fixed-Term Workers

FTW are employment agreements between an employer and an employee for a specific duration, with a predetermined end date (Barnett et al., 2020). These contracts often cater to temporary projects or seasonal work. Employers also use FTW to evaluate a new employee’s suitability before offering a permanent position (Casper & Harris, 2008). The FTW control test may indicate employee status if the employer controls activities and schedules significantly. The status could be self-employed if an FTW retains substantial control in this area. The integration test may conclude an FTW is an employee if tasks are integral to the employer’s core activities.

Conversely, if tasks are peripheral, they may be considered self-employed (Sargeant & Lewis, 2020). If an employer has a mutual obligation to provide work and for the FTW to accept it, they may be viewed as an employee. If there is no ongoing obligation for either party to offer or accept work, they may be considered self-employed (Taylor, 2017).

Two cases exemplify the application and implications of these tests. In Royal Mail Group plc v Aldous (2013), the Employment Tribunal ruled in favour of Mr Aldous, holding that excluding FTWs from receiving redundancy payments was less favourable treatment (Royal Mail Group plc v Aldous, 2013). This case highlights the need to protect FTWs' rights by ensuring they are not disadvantaged compared to their permanent counterparts. In James v Greenwich London Borough Council (2008), the Court of Appeal ruled that a worker engaged in a series of fixed-term contracts through an employment agency was not an employee of the organisation. The court found the worker was not sufficiently integrated, citing exclusion from the organisation’s disciplinary and grievance procedures. This case highlighted the importance of the integration test in determining the employment status of FTWs.

Critical Evaluation

While the Common Law tests provide flexibility in determining employment status, there are shortcomings, such as ambiguity and limited protection for non-standard workers. Some argue the tests are suitable by emphasising the importance of a functional approach and asserting tests can address different work arrangements (Collins et al., 2019). Conversely, others have argued the tests lack clarity and fail to protect workers in non-standard arrangements. It has been noted that the absence of a statutory definition of ‘employee’ or ‘worker’ exacerbates the complexity and uncertainty surrounding employment status (The Independent Workers Union of Great Britain v The Central Arbitration Committee, 2021). By comparison, Germany and Australia have introduced statutory definitions of employees and workers (Freedland & Kountouris, 2011). The UK could adopt this method to address the ambiguity in Common Law tests.

Conclusion

UK employment law and Common Law tests establish a framework for determining if an individual is an employee, worker, or self-employed, thereby influencing the rights they are entitled to under employment law. Nevertheless, the tests exhibit limitations with moderate effectiveness. Concerning PTWS and FTWs, UK employment law safeguards rights, including equal pay, access to pension schemes, and protection against unfair dismissal (DBT & DBEIS, 2018). However, these protections do not encompass all workers in such categories, which could heighten the risk of discrimination or unequal treatment compared to full-time, permanent staff (Deakin & Morris, 2012). Exploring alternative approaches from other jurisdictions, such as statutory definitions, presumptive employee status, or sector-specific regulations, may provide valuable insights for improving the determination of UK employment status. HRM practitioners must comply with and understand employment law and its implications for workers with varying statuses (Sargeant & Lewis, 2020).