Employment law deal with the relationship between employers, employees, workers and independent contractors. And its basis can be found in the law of contract, where offer, acceptance, consideration and intention to create legal relationship are essential in the area of employment. The area of human resources is hugely influence by the law of employment, this is reflected in areas such as recruitments, training, placement and dismissal. Employment law has it sources UK legislation, case law, European law and other domestic institutions ( Emir, A. (2012). Selwyn’s Law Of Employment. 17th edn, London: Oxford).
Section 230 (1) Of the Employment Rights Act 1996 defines an employee as an individual who enter into or worker under (or, where the employment has ceased, worker under) a contract of employment, which is a contract of services or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing. Section 295 of the Trade Union and Labour relations (Consolidation) Act 1992, have very similar definition of an employee, but is narrower than the term worker, while the provisions contained in the Employment Right Act are limited to employee. All employee may be deemed as worker, however not all workers are employee.
There are certain characteristic that distinguishes an employee, a worker and an independent contractor. The employee is, as defined above, but in addition employees enjoys the full statutory protection of employment law. The employee is remunerated for their services, and they pay taxes and national insurance contribution through their employer, and they are entitled to sick leave, holiday pay, maternity leave etc.
Section 230 (3) defines a worker as (except in the phrase ‘shop worker’ and ‘betting worker’) an individual who has entered into or worker under (or, where the employment has ceased) a contract of employment, or any other contract, whether express or implied ( if express) whether in writing or oral, whereby the individual undertake to do or perform personally any work or services for another party to the contract…. Where a worker is deemed to be an employee they will enjoy the statutory protection of an employee.
A self-employed person work as a sole trader or consultant and pay tax on a self-assessment basis. Section 29 of the Equality Act 2010 extend protection to all worker, employee and service provider alike, in relation to discriminations and victimisation. The self-employed person is a worker who work independently under a contract for services as oppose to the employee who work under a contract of services. However, the court have developed a number of test when determining who is an employee and who is self-employed.
With the control test, ‘ An important criterion for determining whether or not the relationship of employer and employee exists is the extent to which a person is under the direction and control of the other party with regard to the manner in which the work is done’ (Narich Pty Ltd v Payroll Tax Comr.). The control test introduce by the court in the 19th century was regarded as the sole determining factor, where, if the employer could tell the employee what to do and how to do it then a contract of services existed (Yewens v Noakes (1881) 6 QBD 530. However the greater the skill for an employee’s work the less significant is the control in determining whether the employee is under a contract of service (Beloff v Pressdram LTD [1973].
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