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Employment Status: Employee or Worker

Employment Status: Employee or Worker

Theresa Mimnagh

Theresa Mimnagh

Employment Status

Labour’s plan for employment law, includes an intention to look at employment status and move towards a single status of worker, so removing the distinction between employees and workers. This means there would only be two categories: workers with full employment rights and the self-employed. How would such a change affect recruitment?

Worker or employee?

Currently, in the recruitment industry, most temps supplied directly by a recruitment business are workers, rather than employees.  However, workers are still entitled to many basic employment rights. These include:

  • the national minimum wage
  • statutory paid annual leave
  • a written contract
  • itemised payslips

Employees currently have additional rights. These include:

  • minimum notice periods
  • rights not to be unfairly dismissed
  • redundancy payments after two years
  • enhanced rights to statutory leave such as maternity

Employment Status in recruitment

There is little doubt that worker status is preferable to most in the industry. One significant reason is that it is hirers rather than recruiters who have day to day management of the temps, including decisions to terminate. If, PAYE temps had the same rights as employees, particularly concerning termination, this would reduce flexibility and potentially increase liability.  Some of these aspects could of course be addressed in contracts, factoring in matters such as notice periods or redundancy payments. However, recruiters would need to consider how this may be managed.

What next?

Single worker status is just a proposal at this stage, but one that could have a significant impact on the recruitment industry.  It is dependent upon Labour winning the election and would also be subject to consultation. A consultation would allow for the industry to voice any concerns, and address how this will operate practically. For now, anyone operating a PAYE worker status model should ensure that contracts properly reflect that status and are fully up to date.

For more information on employment status, or rapid advice on any recruitment or employment law matter, please contact us on 01273 236 236 or email us at [email protected].

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