Are your freelancers entitled to holiday pay?

… Yes, if they are “workers”….  What’s a “worker” you might ask.
Whilst “workers” were defined way back in 1996 in the Employment Rights Act, the definition seemed to attract little attention for many years. However, thanks to the so-called gig economy we are all getting to grips with its significance now.

According to the definition, a worker must:

  • have a contractual relationship with the employer
  • perform work personally for the employer
  • not be in a relationship with the employer where the employer is the client of the worker’s business.

Being a worker entitles individuals to some of the rights available to employees such as holiday pay, the National Minimum Wage and the right not to be unlawfully discriminated against. There have been a few well-publicised cases recently (such as the Uber and CitySprint cases) where so-called self-employed individuals have successfully claimed worker status in order to take advantage of these rights.

The last of these cases was brought by Mr Smith against Pimlico Plumbers. Mr Smith won his case despite his contract stating that he was self-employed and that he could pick and choose which plumbing jobs he did. A large part of Pimlico Plumbers’ downfall seems to have been a fairly prescriptive operatives’ manual setting out various requirements, including the requirement for plumbers to be available for a minimum number of hours each week. The spirit of the manual appeared to be in conflict with the written contract emphasising self-employed status. This, and the lack of an unfettered right to send a substitute to do the work, led the tribunal to conclude that Mr Smith was really part of the business of Pimlico Plumbers rather than Pimlico Plumbers being a customer of Mr Smith’s.

Whilst it can still be difficult to determine employment status, one thing is certain from the recent spate of cases in this area: courts will place a great deal of emphasis on contractual and other documentation. All organisations should therefore be encouraged to ensure that they have contracts in place for freelancers and contractors if they wish to avoid being stung with unwanted claims for holiday pay and the like in future.

If you would like Harmony HR Solutions to review your freelancers’ contacts and working practices, please get in touch.

2017-06-23T12:58:21+00:00