What legal rights do casual workers have in the workplace? This depends on a number of factors, some of which senior employment lawyer Matthew Ainscough highlights here in an FAQ for employers.
I am sure that we will all be familiar with the term "casual worker". This term, however, has no specific legal meaning. It can be used to describe persons who are engaged across a wide range of industries in many different circumstances in a flexible, often ad hoc way. Sometimes they are employees, sometimes “workers” with fewer rights than employees, and sometimes they are self-employed.
Employers use casual workers because it gives them a degree of flexibility in their workforce. Historically, casual workers were used in businesses where the need for workers was seasonal, such as tourism. However, in recent years there has been a shift and casual workers are often used in businesses where arguably there is a constant need for workers; as a result, the so-called "gig economy" has emerged, though gig economy workers are often recruited as self-employed contractors.
In very broad terms, employees have more legal rights than workers, and workers have more legal rights than the self-employed. Let’s have a closer look at the issues.
What are the different types of casual worker?
Casual workers may be engaged in a variety of ways such as:
- Zero hours contracts (i.e. no minimum guaranteed hours)
- Short-hour or guaranteed minimum hour contracts
- Self-employed/freelance contracts
- Contractor/sub-contractor agreements
- Fixed term/term-time contracts
How do you decide the employment status of a casual worker?
The legal concept of a "worker" has been developed over time through case law. Generally speaking, casual workers who are not employees may be “workers” if they provide their services personally (i.e. they do not send a substitute in their place to carry out the work for them) and the other party is not a client or customer of the worker’s own business.
When determining employment status, the main questions are:
- Is there a contract between the employer and the individual?
- Is the individual required to provide their service personally? Or are they entitled to send a substitute?
- Is the other party a customer or client of any business or profession carried out by the individual?
- Is there an obligation on the employer to provide work and an obligation on the individual to do that work if provided? If not, this suggests that there is no ‘mutuality of obligation’, which is an important factor in determining worker status.
In addition to these questions, a tribunal will look at the overall picture and consider whether there are any other factors that suggest worker status, such as how much control an employer has over that individual.
What are the problems in establishing employment status?
The term "casual worker" suggests an informal relationship between the parties, with little obligation on either side. However, employers should beware because some casual workers may in fact be employees, and some self-employed contractors may in fact be workers, and therefore entitled to a greater number of legal rights than the employer realises.
To complicate matters, the employment status of a casual worker can change over time – for example, if their working arrangements develop a regular pattern. It is possible, therefore, for someone to start work as a genuinely self-employed contractor but develop worker status as the relationship with the employer progresses.
There have been several cases in the courts suggesting that many gig economy workers hired as self-employed contractors are actually workers under employment law, including the recent and widely-reported case involving the taxi service Uber.
If I describe a casual worker as self-employed is this enough to prevent them becoming a worker or employee?
No, even if the contract states that the individual is “freelance” or a “contractor”, or is not intended to be an employee, this will not be sufficient if a tribunal considers that the reality of the relationship between the parties does not reflect this. In other words, the labels applied by the parties will not decide employment status; what actually happens in practice will be just as important and tribunals may disregard contractual labels when deciding employment status.
However, it may help employers to keep a clear distinction between their casual workers and their employees, for example by not labelling them as employees for internal purposes and not providing the same benefits as are given to employees.
Do casual workers have legal rights?
Employees have more legal rights than workers, such as the right not to be unfairly dismissed and the right to a statutory redundancy payment, but workers do have the following legal rights:
The right to receive a written statement of terms
Any worker commencing work on or after 6 April 2020 is entitled to a written statement of employment particulars.
Holidays and holiday pay
Most workers have a right to a minimum of 5.6 weeks' paid annual leave.
Related article: Calculating holiday entitlement for casual workers
Workers are entitled to certain daily and weekly rest periods, and are subject to the maximum weekly working time limits (unless they have signed an "opt-out”).
A part-time worker has the right not to be treated less favourably than a comparable full-time worker unless that difference in treatment can be objectively justified.
Employers often believe that employing an individual on a fixed-term basis is desirable because this provides a greater level of flexibility. However, it should be noted that an employee on a fixed-term contract is entitled to exactly the same rights as an employee on a permanent contract once they acquire the necessary length of service, and that they also have additional protections against less favourable treatment.
Sickness and sick pay
Workers may be eligible to receive statutory sick pay.
Maternity, paternity, adoption and parental leave and pay
A worker may be entitled to some family-friendly rights, such as maternity leave and pay.
All employers in the UK are required to automatically enrol eligible workers in a pension scheme and pay mandatory minimum contributions.
A casual worker or self-employed worker may also benefit from protection in the Equality Act 2010, such as the right not to be discriminated against.
Termination of a casual worker
A worker cannot claim unfair dismissal and they are not entitled to a redundancy payment. However, if a casual worker has developed a long-standing relationship with the employer, they may argue that they have acquired employee status and all the rights associated with that, including the right not to be unfairly dismissed or the right to receive a redundancy payment.
Tracking casual workers with HR software
Myhrtoolkit can help employers keep track of employees and casual staff with key staff management features, including a comprehensive staff database with detailed files and relevant individual documentation attached.
To find out more, you can get in touch with the myhrtoolkit team to discuss your requirements and book a demonstration.
Written by Matthew Ainscough
Matthew Ainscough is a Senior Employment Lawyer and Fellow of the Chartered Institute of Legal Executives (FCILEx), specialising in discrimination and employment litigation for law firm Bell & Buxton incorporating Ironmonger Curtis. He writes about specialist employment law topics and issues.