Good charities need good people. Those people are often
volunteers, trustees, employees, advisers, and everyone in between.
But what rights, if any, do they have?
As far as employment rights are concerned, the answer will
depend on the employment status of the individual concerned. In UK
employment law, there are three categories of employment status
– employees, workers and the genuinely self-employed. Recent
cases coming from the gig economy have brought this issue of
employment status back into the spotlight and many businesses are
reviewing their operations in light of these cases, and charities
and third sector organisations should be doing the same.
What do we mean by the gig economy cases?
You may have seen our recent updates following the Court of
Appeal's decision in the
Pimlico Plumbers case and the Employment Tribunal's
decision in the
Uber case. There are also now reported employment tribunal
decisions involving CitySprint and Excel Group cycle couriers, and
we understand that Deliveroo riders are the latest to be bringing
similar claims to the tribunal. These cases are now becoming known
collectively as the 'gig-economy cases'.
Generally speaking, these cases all involve businesses who
engage the services of individuals (usually on an ad hoc, flexible
basis) who they consider to be self-employed and not employees or
workers of the business. These individuals often provide their own
tools, account for their own tax, provide their own insurance, and
work under contracts that clearly describe them as self-employed.
However, in each of these gig economy cases, the tribunals and
courts have decided that, despite the wording of the contract
between the business and the operative, these individuals are
workers, and not self-employed.
The tribunals and courts in these cases have looked beyond the
strict terms of the contracts and considered the relationship
between the parties in practice. Interestingly, reference has also
been made to statements made by the companies to the public and
While each case will turn on its own facts, there is now a
growing body of case law in which the tribunals and courts are
finding that individuals are workers, particularly where the
business retains control over the individuals. These gig economy
cases are also attracting media attention and so organisations
should be prepared for questions, and potential claims, from those
currently regarded as self-employed but who believe they are in
fact employees or workers.
Why is this important?
Truly self-employed individuals are not entitled to employment
rights, but employees and workers are. This means that workers (and
employees) are entitled to protections against unlawful
discrimination as whistleblowers; to pay for annual
leave, the National Minimum Wage (and National Living Wage),
rest breaks and may also be eligible for an employer contribution
under an auto enrolment pension scheme. Employees also have
additional rights such as the right not to be unfairly dismissed
and statutory redundancy payments. There is therefore a substantial
financial (and administrative) risk for charities and third sector
organisations who get employment status wrong.
What can charities do?
It is vitally important that charities and third sector
organisations review their position in order to minimise these
risks. Taking advice now could limit the financial and reputational
Charities and third sector organisations should therefore:
Ensure contracts are well drafted and robust;
Ensure that the relationship in practice is not materially
different from the relationship on paper; and
Ensure that statements made in public do not contradict the
terms of the contract.
The material contained in this article is of the nature of
general comment only and does not give advice on any particular
matter. Recipients should not act on the basis of the information
in this e-update without taking appropriate professional advice
upon their own particular circumstances.
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The Court of Appeal has held that where a contract of employment lacks a provision for when notice of termination takes effect, it is effective from when the employee personally takes delivery of the letter containing notice.
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