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Specific Categories of Workers

Status of Workers

Apprentices

  1. A contract of apprenticeship, under which the apprentice is employed, exists where the apprentice contracts to be taught a trade or calling. 1 The apprentice undertakes to serve their `master' for that purpose and the `master' undertakes to teach the apprentice and to maintain them or pay their wages. 2A company (or other corporate body) may take an apprentice. An apprenticeship agreement must be for an agreed fixed period. Apprenticeship agreements must be in writing or else they cannot be enforced. 3 The ‘master’ must have responsibility for the training and qualifications of the apprentice. A tripartite agreement, where an employer offers a person an opportunity to train and qualify at an external body such as a school or college, even if they pay the person whilst at college and allow the college to assess the person at work, will not be an apprenticeship. 4
  2. An apprenticeship contract is a contract of employment under HWSA Section 53(1) – see Status of Workers – Introduction section.

Company directors

  1. The legal status of a director is that of an office-holder and an agent of the company. A director could also be an employee, self-employed, or neither. Information identifying a director of any particular company is available from Companies House.
  2. Section 318 of the Companies Act 1985 requires companies to keep copies of all written "service agreements" (employment contracts) with directors and written memoranda of oral service agreements (employment contracts) with directors. Such service agreements may not be for longer than five years unless approved by the company by way of a resolution at a general meeting. If no resolution exists, the service agreement will be freely terminable on notice by the company. If a company does not have a written service agreement or memorandum in respect of a certain director, this does not mean that they are not employed. The company might simply be in breach of the requirements of section 318.
  3. Executive directors are usually employees of the company. An employee is defined in section 53 HSWA and section 230 Employment Rights Act 1996 (ERA 1996) as a person who works under a contract of employment or a service agreement. If a director works full time for the company and is paid a salary, a court is likely to view the director as an employee 5. This is in contrast to the situation where a director takes on some of the business’s financial risk by receiving fees on a sporadic basis dependent upon the company’s performance. Directors are also required to make declarations of their interests at board meetings 6; such interests should include their employment status. Ultimately, as with other people, employment status will depend on the assessment of all relevant factors. A relevant factor in these circumstances is whether there is a mutual obligation on the company and the director to offer and accept work beyond the duties required of any director 7.
  4. Inspectors will be able to use their section 20 powers, if necessary, to require companies to disclose the service contracts of their directors 8 or notes and minutes of meetings 9 so that they can be inspected and/or copies taken of them.
  5. A non-executive director is more likely to be self-employed, although the circumstances of each case should still be assessed. Self-employed is defined by section 52 HSWA in very wide terms as: an individual, who does work for their own gain or reward, otherwise than under a contract of employment, regardless of whether or not they employ others.
  6. A further factor is whether a director has a controlling shareholding in the company. If so, it is less likely that they will be an employee because they could block a decision to dismiss themselves or amend their terms of employment 10. However, this does not mean that a controlling shareholder cannot be an employee 11.
  7. In very rare cases a director’s employment status may fall outside the definition of an employee or self-employed person – he or she (if they are receiving some form of remuneration) may be a “worker”, being neither employed or self-employed 12. The courts will be keen to find an employment relationship or a self-employed status rather than define a person’s status as “worker”. Inspectors should make every effort to find evidence of employment or self-employed (the broad definition of self-employed in section 53 HSWA will assist).

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Casual workers

  1. Casual work is where a person undertakes short periods of work with breaks in between each period when no work is offered or done. The two most common types of casual work are:
    • a situation where the worker may choose, without penalty, whether or not to come to work and the ‘employer’ only pays for the hours worked without offering any other benefits – here, the arrangements will not normally give rise to a contract of employment because there is not usually any mutual obligation to offer or to accept work; and
    • a situation where casual work is taken on for a short period, such as holiday work for students, when the hours and conditions of the work are stipulated by the ‘employer’, although this is often only verbally – here the arrangements would normally give rise to a contract of employment.
  1. In either situation there could, depending on the facts in each case, also be a ‘global’ contract of employment where such mutual obligations exist. The longer the relationship between the parties and the more regular and continuing the work, the more likely it will be that a ‘global’ contract of employment exists.

Labour-only subcontractors

  1. Labour-only subcontracting is particularly common in the building and construction industry . In this situation, the main contractor engages the labour needed on a project by sub-contracting specific jobs to workers (sub-contractors). The legal status of such a worker depends on the normal application of the various criteria listed above. The courts have shown a willingness to overlook the fact that the worker is described as `self-employed", if the other factual circumstances actually point towards employment.
  2. In one case 13, a general labourer was engaged by a firm of builders and was expressly told that he was working as part of a "lump" labour force. He was paid an hourly rate without deductions for tax and national insurance, but was provided with tools and was subject to the day-to-day control of the site agent with regard to what to do and where to do it. The court held that the labourer was an employee of the building firm despite the express intention of the parties that he was to be a self-employed labour-only subcontractor.
  3. Another common situation in the building and construction industry is where there is an intermediary (such as a gang leader or a sub-contracting company) who contracts with the main contractor for the supply of labour and with the worker for the provision of the labour. In this situation, the worker is likely to be in the same position as temporary or agency workers supplied by an employment agency or business (see below).

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Agency workers

  1. An employment agency/business may supply the services of individuals to another company (their client) on a temporary basis. The working arrangement is usually for a limited period of time.
  2. There are a number of possible employment arrangements for agency workers:
    • the worker may not be an employee at all;
    • the worker may be an employee of the agency/business;
    • the worker may be an employee of the company (the client).
  1. If the company (client) pays the agent for the worker and the agency then pays the worker, this will point away from the worker being an employee of the company (client).
  2. If the contract between the worker and the agency states that there may be periods when no work is available and there is no obligation to find work for the worker or for the worker to accept it, this will point away from a relationship of employment between the agency and the worker.
  3. However, whether or not the worker actually is an employee will depend on all the details of the relationship between the parties (particularly the terms of the contract document) and the application of the criteria detailed in the “Contract of Employment” section above. Employment status must be determined from full consideration of all the evidence i.e. not only any relevant documents but also all the relevant evidence about the dynamics of the working relationship between the parties including what was said and done. 14
  4. In one case 15, it was held that there was no contract of employment where:
    • the agency was not obliged to find work;
    • there was no obligation to accept work;
    • the worker was free to register with other agencies; and
    • there was no holiday pay.

    The court considered that the relationship lacked the elements of continuity and care associated with a contract of employment.

  1. In another case 16, the court held that there was no contract of employment between the agency and the worker where the worker was placed at a client company continuously for three years because the terms of the contract indicated that is was not a contract of employment and it was agreed that there would be periods between assignments where no work would be available.
  2. If a company exercises day to day control over an agency worker, case law indicates that even though the agency remunerated the worker there would be no contract of employment between the worker and the agency 17
  3. The courts have made clear that agency/temporary workers can be employees of their agency or the company where they are placed. In one case 18, it was stated that no general rule existed preventing an employment agency worker from being an employee of the agency. Where, as in that case, the worker's relationship with the agency was governed wholly by a written contract, employment status depended on the court's construction of those terms.
  4. There were factors pointing both towards employment:
    • the existence of a grievance procedure;
    • weekly payment with tax and national insurance deductions;
    • a duty of faithful service.

    and factors pointing away from employment:

    • the worker was described as a `self-employer worker not under a contract of service;
    • no holiday or sick pay.

    The court decided that the totality of the terms of the contract created an employment relationship, regardless of the label given by the parties.

Workers

  1. As stated in paragraph 8 above, there is a third category of persons in respect of which a duty is held, besides employees and the self-employed – the category of “worker” 19. Whilst the HSWA imposes duties on employers towards employees (section 2) and duties on the self-employed (section 3(2)), it does not specifically apply to workers. The employer’s duties in the case of workers would fall within section 3(1) of HSWA. Other specific regulations, however, also place a duty upon a person in control of work, regardless of whether they are in control of an employee, are self-employed, or a worker. (For example, the Construction (Health, Safety and Welfare) Regulations 1996).

Office Holders

  1. The category of workers known as “office holders” includes police constables, prison officers, company directors, trustees, members of the clergy, trade union officials, magistrates and club secretaries. An ‘office’ is a permanent post which exists independently of the person who holds it.
  2. A worker who holds an office is traditionally not considered to be an employee because their office continues in existence independently of the particular office holder who, for the time being, holds the position. However there are exceptions to this approach, for example, police officers are office holders but, by virtue of specific statutory provision 20, are treated as employees for the purposes of health and safety legislation.
  3. However, a person may be both an office holder and an employee at the same time depending on the application of the criteria set out above.
  4. In one case 21 the issue was the employment status of the secretary of a workingmen’s club. The relevant factors were:
    • whether payment was by salary or honorarium (a grant);
    • whether payment was fixed in advance or related to the amount of work done;
    • whether there was a right to the payment or not;
    • if there was a right to payment, the size of the payment;
    • whether the individual was exercising the functions of an independent office or was the subject of close control;
    • the extent and weight of the duties performed - (the smaller they are the less likely they are to be an employee);
    • how payment was described and how it was treated for tax and national insurance purposes.

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Volunteers

  1. Volunteers are not employees, so if consideration is being given to proceeding against a dutyholder under section 3 HSWA in respect of risks to volunteers, you need to prove that the duty holder is “an employer”, i.e. that in addition to the volunteers, there is at least one employee within the business/company.
  2. If the dutyholder is not “an employer” you may be able to proceed under section 3 (2) HSWA if the dutyholder was a self-employed person who had volunteers affected by risks but did not have employees.
  3. In addition, you should consider whether section 4 HSWA, which imposes general duties on a person who has control of non-domestic premises, may be a suitable charge if there are risks to volunteers, or for that matter, to any other person who uses the premises or plant.

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Domestic servants

  1. Section 51 HSWA states that Part 1 of the Act does not apply in relation to the employment of domestic servants in a private household. HSE cannot therefore enforce the provisions of HSWA against an employer insofar as those provisions relate to the employment of a domestic servant, nor against the domestic servant him/herself.
  2. There is no case law that provides definitive guidance on when an employee is a ‘domestic servant’. The following factors may, however, be considered in deciding whether section 51 might apply:
    • Whether the employee works for the upkeep and maintenance of a domestic establishment and for the convenience and comfort of those living there 22. It has also been suggested that domestic service might involve quite skilled roles and might not be limited to “housework” 22.
    • The employee may be more likely to be a domestic servant if the employer is a member of the household or a private individual rather than, for example, a local authority or agency. The position might be complicated where the worker is employed directly by a private individual using money provided by a local authority. What duties exist will depend to a large extent on the facts of the case.
    • The work must be done at a private household, as opposed to premises such as a nursing or residential home. However, domestic servants need not live in the household where they work 23 and may be employed in more than one household. 24
    • Section 51 will not apply (and Part 1 HSWA therefore will) in relation to any additional work carried out by the employee that falls outside the ambit of domestic service in a private household.

Footnotes

  1. Wiltshire Police Authority v Wynn [1980] ICR 649
  2. R v Laindon Inhabitants (1799) 8 Term Rep 379
  3. Kirkby v Taylor [1910] 1 KB 529
  4. Fleet v Matheson [2005] IRLR 412
  5. Trussed Steel Concrete Co Ltd v Green [1946] Ch115
  6. This is a requirement under section 317 Companies Act 1985 (“section 317 declarations”)
  7. Eaton v Robert Eaton Ltd and the Secretary of State for Employment [1988] IRLR 83
  8. Under section 318 Companies Act 1985, companies must keep copies of the service contracts of directors at “an appropriate place”
  9. Under Article 100 of Table A Companies Act 1985, minutes of board meetings (this would include section 317 declarations) must be kept
  10. Buchan v Secretary of State for Trade and Industry [1977] IRLR 682
  11. Secretary of State for Trade and Industry v Bottrill [1999] IRLR 326
  12. i.e. an individual (who is neither a “shop worker” or “betting worker”) who has entered into or works under “any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual” (section 230(3)(a) the Employment Rights Act 1996).
  13. Ferguson v John Dawson & Partners (Contractors) Ltd [1976] IRLR 346
  14. Franks v Reuters, TLR, 23/04/2003 / [2003] EWCA Civ 417
  15. Wickens v Champion Employment [1984] ICR 365
  16. Pertemps Group plc v Nixon [1994] IRLB 488
  17. Brook Street Bureau (UK) Limited v Patricia Dacas [2004] EWCA Civ 217
  18. McMeecham v Secretary of State for Employment [1997] ICR 549
  19. Section 230 Employment Rights Act 1996
  20. Sections 51A and 52(1)(bb) HSWA 1974
  21. Social Club v Bickerton [1977] ICR 911
  22. Cameron v Royal London Opthalmic Hospital [1941] 1 KB 350
  23. Re Junior Carlton Club [1922] 1 KB 166
  24. Section 51 HSWA and section 6(c) Interpretation Act 1978