Employee, Worker or Self Employed on the Farm?
- AuthorJCP Solicitors
It is not unusual for farmers to engage workers on the farm but what is the status of these workers in so far as employment law is concerned?
This is important because a “worker” or an “employee” can establish certain rights under the Employment Rights Act 1996 which means potential litigation in the Employment Tribunal.
Some of these employment rights include: paid holidays; the right not to be unfairly dismissed; rest breaks; redundancy pay; statutory sick pay; national minimum wage; notice pay…and more.
As you can imagine, these can have the potential to lead to unexpected costs if your workers decide to challenge the terms of their status and make a claim.
In addition, recognising or understanding the status of your farm workers is important as employers are liable for the acts of their employees in the execution of their duties. This is known as ‘vicarious liability’. Separately, the farmer also has a duty of care regarding the health and safety of all employees.
Perhaps you already have a formal contract in place known as a “Consultancy Agreement” or something similar, and your workers already pay their own taxes to HMRC in accordance with their self-employed status. Possibly, because of this, you believe that there is no risk of a claim being made against you at the Employment Tribunal.
However, even when such written agreements are in place, they are not conclusive and do not necessarily determine the true nature of the relationship between you and the individuals i.e. whether they attract employment rights. There is often a misunderstanding or misconception that a formal agreement provides a defence against any claims by individual workers – that is not necessarily true (depending on the individual facts of each individual case of course).
In any case brought before the Employment Tribunal, which seeks to answer the question: “Is this an employed or self-employed relationship?” the judge will look beyond any formal agreement and assess whether there are specific factors that indicate an employment relationship.
These factors are:
- The individual must perform the work personally i.e. without the right to appoint a substitute. This is one of the most important factors in deciding on the nature of the relationship.
- The farmer has day-to-day control over the worker as to when work is carried out, in what ways the work is performed, the time, hours and place in which the work is carried out, and so on. In addition, the individual is subject to any workplace rules, policies or procedures. It is worth mentioning that day-to-day control over the individual is not essential in determining an employment relationship and an individual who is independent with autonomy to carry out day-to day tasks could still be regarded as a worker or employee.
- There is an expectation that the farmer will provide work and the individual will accept that work.
- Is there a financial risk to the individual? Even though they are in business on their own account, does the farmer determine the rate of pay to the individual?
- The farmer expects an exclusive service and the individual is not ordinarily free to provide services to others.
- The relationship between the farmer and the individual is permanent or open-ended. Perhaps there is a distinction here between individuals who work short-term on specific tasks such as the harvest, calving or lambing compared to an individual who is undertaking work for the long-term, for example milking or looking after animals.
- The individual is treated in the same way as the rest of the workforce i.e. other staff who are already regarded as employees on the payroll.
- The farmer provides the individual with personal equipment to enable them to perform their work.
To avoid or reduce the likelihood of a worker’s claim in the Employment Tribunal, you should, as far as is reasonably possible, ensure that the individual has the freedom to:
- accept or reject work;
- work for others;
- decide how work is carried out;
- determine their own rates of pay or fees;
- use their own equipment; and
- appoint a substitute to carry out the work.
You should ensure that any written contract between you reflects the above and also, ensure that the parties conduct themselves in a way that is in keeping with the contract.
Finally, it is worthwhile making enquiries as to whether you can purchase a ‘legal expenses insurance policy’, providing cover against the risk of damages and legal costs associated with defending a claim in the Employment Tribunal.