The conciliation service, ACAS, has published new guidance for employers in relation to employment status.

The guidance has been published to try and assist employers with this often tricky area in the wake of recent publicity regarding employment status and, in particular, increased focus on the so called ‘gig economy’.

There are three main types of employment status:

  • Employee
  • Worker
  • Self-employed

In brief, an ‘employee’ is an individual who works under a contract of employment. For there to be a contract of employment there must, as a minimum, be an obligation for the individual to perform the work personally, the existence of mutuality of obligations between employer and employee and the employer must have sufficient control over the employee’s work.

By contrast, a ‘worker’ is an individual who, under any other type of contract, undertakes to perform personally any work or services for another party to the contract who is not a professional client of the individual (in other words someone who is not in business on their own account).

In establishing employment or worker status, the courts and tribunals will look at the facts and substance of the relationship, not just what is written in the contract. This is important as it will determine what rights the individual has against their employer.

The new guidance, which is fairly short, also touches upon agency workers, apprentices, fixed term workers, peripatetic workers (workers with no fixed work base), piece work, volunteers, work experience and internships and zero hours contracts.