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Understanding Employment Status: What you need to be aware of when using sub-contractors or self-employed drivers

Earlier in the year Uber was hitting the headlines after losing its appeal against a landmark ruling which ordered it to treat ‘partner drivers’ as workers (you can read our blog on this here), and it seems that courier giant, Hermes, is about to lose the same battle.

An employment tribunal ruling has found that Hermes couriers are workers and not self-employed, therefore entitled to rights such as the national living wage and holiday pay.

A group of 65 Hermes couriers took the delivery service to the tribunal after they said they had been denied basic workers’ rights and although Hermes have said they’ll be appealing the ruling, it does demonstrate the extent of the grey areas surrounding employment status. If a large firm such as Hermes can get it wrong, smaller logistics businesses should be taking extra precautions to ensure they understand the key differences between drivers who are workers, employees and self-employed or contract workers.

So, how can you identify someone’s employment status?

Employee
Someone is likely to be classed as an employee if some or all of the below applies:

• They have a contract of employment
• They’re obliged to perform the work personally
• A manager or supervisor is responsible for their workload, saying when a piece of work should be finished and how it should be done
• They only work for one business
• That business provides the tools/equipment for their work
• They’re required to do a minimum number of hours and expect to be paid for time worked
• The business deducts tax and National Insurance contributions from their wages

Employees have extra employment rights over workers. These rights include Statutory Sick Pay, Maternity/Paternity pay, minimum notice periods if their employment will be ended and protection against unfair dismissal.

Worker
Someone is classed as a worker if:

• They have a contract or other arrangement (not necessarily in writing) to do work or services personally for a reward, including money or benefit in kind.
• 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

Workers have employment rights such as, receiving National Minimum Wage, protection against unlawful deductions from wages, the statutory minimum level of paid holiday, the statutory minimum length of rest breaks and not to work more than 48 hours on average per week, unless they choose to opt out of this right. They may also be entitled to some of the same rights as employees – Statutory Sick Pay, Maternity/Paternity pay

Self-employed
A person is self-employed if:

They run their business for themselves and take responsibility for its success or failure. Self-employed workers aren’t paid through PAYE, and they don’t have the employment rights and responsibilities of employees.
Employment law doesn’t cover self-employed people in most cases.

Contractor
A contractor can be self-employed, a worker or an employee if they work for a client and are employed by an agency.

The logistics industry employs a versatile and varied workforce, where drivers could fall into the category of any of the employment statuses listed above. If you use self-employed and contract drivers, can you be sure that they couldn’t claim to be workers? One of the benefits of agency drivers is that their contract is with the agency and not you, therefore limiting your liability for employment disputes.

Savanna Driver Recruitment are specialists in providing temporary LGV (HGV), HIAB and Moffett drivers to businesses throughout London and the UK. For driver availability and more information please contact us on 0330 335 8367 or fill in our enquiry form.

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