As harvest time approaches, vineyards around the county are bound to be considering whether to take on additional seasonal workers to help lighten the load and get the job done.
But before jumping in with both feet, time should be taken to consider what legal basis those seasonal workers are being hired on – as this will have a significant impact in terms of the statutory and contractual employment rights those individuals will enjoy while on assignment with you. It will also determine how much tax and national insurance you both have to pay.
Under employment law, there are in fact only three possible relationships – employee, worker or self-employed. Under tax law there are only two possible relationships – employee or self-employed. There appears to be a continual stream of cases trickling through the Employment and Tax Tribunals at the moment, many of which are determining the worker to be a fully fledged employee despite the parties putting other labels on the relationship such as “seasonal worker”, “casual worker”, “zero hours”, “freelancer” and “consultant” etc.
There are a variety of different industries, particularly in the gig economy that have been affected by the stream of cases through the Tribunals, including; In the Pimlico Plumbers case, Gary Smith was found to be self-employed for tax purposes but a “worker” for the purposes of employment law rights to holiday and sick pay; In the Uber drivers case, the drivers were found to be workers under employment law; In the CitySprint case, bike couriers were found to be workers and entitled to holiday pay and in the StringFellows case, lap dancers were found to be employees and therefore entitled to bring a claim in the Tribunal for unfair dismissal.
Many employers, from a variety of industries, are tempted to enter into sham arrangements in order to save on employment and tax liabilities. However, this is indeed a false economy. Fees and penalties incurred in disputes about these issues far outweigh any savings that can be made. Some may see the decisions in high profile cases such as the Lorraine Kelly tax case and be tempted to chance it, in order to make savings on employment rights. However, it is highly unlikely that Lorraine Kelly would be found to be genuinely self-employed under employment law; since she would very quickly get into trouble if she decided she didn’t want to work to her contracted days of work or send her granny in to be her substitute so she can take a day off!
The thing to remember – it is not just a label, it determines the legal relationship between the parties and therefore the rights and responsibilities that each party enjoys. Just taking a few moments at the outset to evaluate the basis upon which you will be recruiting and ensuring that this is properly reflected in the contractual documentation (or particulars of employment). Getting it right in the first instance, is far more cost effective that having to defend legal proceedings!
