It is standard HR practice to issue a contract of employment to each employee and you have probably read lots about the upcoming changes to employment contracts (if you have not, click here). Hopefully you have also realised that there will be a new legal obligation to issue a similar form of document to any new workers that you engage on or after 6 April 2020. However, this new obligation may be more tricky to comply with than it first seems.
You will need to be able to identify who is a "worker"
There are three employment status categories in employment law; employee, worker and self-employed. Differing levels of employment protection and rights apply depending on the individual's employment status.
There are a number of tests that employers can apply to determine what category an individual falls within. However, in practice the exercise can be far from clear-cut and has often been the subject of dispute (remember all the cases involving personnel in the gig economy - see here for an example).
Employers will need to think carefully and ensure that they are issuing the correct documentation to each individual.
You need to give careful thought to the terms
The list of prescribed information that must be contained in the document is the same for both employees and workers. However, some elements in the list do not fit well in a worker situation.
By way of example, the legislation dictates that the statement of terms must specify the person to appeal to if the individual is dissatisfied with a disciplinary decision. Most employers would only apply their formal disciplinary process to an employee (and not a worker). This is for two key reasons: (a) only employees have the legal right to bring an unfair dismissal claim and (b) by exerting such a level of control over an individual, it could indicate that they are an employee, rather than a worker.
When issuing the required documentation, care must therefore be taken by employers not to inadvertently suggest that a worker is actually an employee (meaning they benefit from more rights and legal protections).
Worker A person is generally classed as a ‘worker’ if: they have a contract or other arrangement to do work or services personally for a reward (your contract doesn’t have to be written) their reward is for money or a benefit in kind, for example the promise of a contract or future work they only have a limited right to send someone else to do the work (subcontract) they have to turn up for work even if they don’t want to their employer has to have work for them to do as long as the contract or arrangement lasts they aren’t doing the work as part of their own limited company in an arrangement where the ‘employer’ is actually a customer or client