Employment Update April 2009: Employee status

29 April 2009

Employment Group

A ‘worker’ is entitled to paid holiday; an independent contractor is not

In the case of Premier Groundworks v Jozsa the question was whether a contract to provide groundwork services for a building contractor entitled the claimant to receive the basic statutory minimum paid leave under the Working Time Regulations.

Under the Working Time Regulations, a ‘worker’ is entitled to the basic statutory minimum paid leave. ‘Workers’ include employees but also those working under contract ‘to undertake to do or perform personally any work or services’ provided that they do not do so as professionals working under contract with a client or a customer .

The terms of the contract are key. In this case it had already been decided by the employment tribunal that the contract was not a ‘sham’. The contract gave the right to the claimant to delegate performance of the services to ‘other persons’ provided that the respondent was notified in advance and that ‘such person is at least as capable and qualified as [the claimant]’.

The EAT decided that this was sufficient to make the claimant an independent contractor and not a ‘worker’. His claim to paid leave failed.

Points to note –

  • Individuals with normal working hours who are entitled under the Working Time Regulations are now (since 6 April 2009) entitled to 28 days paid leave in each year.

  • Although employers will normally be concerned with distinguishing employees from workers, it is worth remembering that there is also a distinction to be made between those providing personal services on a self-employed basis (who may be ‘workers’) and those carrying on their own business with clients and customers where the provision of individual personal service is not the dominant feature in the relationship.