Employment Law in the Modern Economy

In recent months a number of employers have been accused of not paying staff minimum wage include Deliveroo, Uber, Hermes and Sports Direct. Nearly all the staff of the first three businesses are classed as ‘self employed workers’.

This means they don’t have a right to the national minimum wage, paid annual leave, sick pay or protection for unfair dismissal. It’s important to remember however that the courts will look beyond the contract to see what the actual nature of the contractual relationship is, so employers that might seek to obscure the true nature of the relationship should eventually be caught out.

A self employed relationship would generally involve things like the contractor having to raise invoices and being able to send someone else in to do the work as a substitute. The key distinction is the mutuality of obligations that exists in an employment relationship. This is the obligation on the employer to provide work and pay the employee for it, and the obligation of employees to do said work.

If the true nature of the working relationship involves such mutuality of obligations, then it may be that at employment relationship can be implied from the circumstances. It’s likely however that classing staff as self employed or workers will put most off from challenging the business as it places an extra hurdle to get over before they can even look at presenting a claim for unfair dismissal etc.

The issue for employment law is how it catches up to an evolving workplace where flexibility is both a blessing and a curse and where savvy companies are arguably avoiding liability and cost by seeking to obscure the true nature of the relationship. Until a review of employment law is carried out in view of the recent high profile instances referred to above, expect such stories to become more and more prevalent.

Please contact Ashley Hunt and Carrie-Ann Randall on 01858 445480 or Vaishali Thakerar and Sejal Patel on 0116 212 1000 if you need advice on employment status or onerous contractual clauses.

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