The contract of employment

The distinction between employees and independent contractors The evolution of the tests at common law Application of the three tests established in Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] Understanding and application of the ‘business on own account’ test for employment status Appreciation of the significance of ‘mutuality of obligations’ in determining who is an employee The limitations of the parties’ use of labels in establishing employment status The sources of the contract of employment The major provisions required under s 1 Employment Rights Act 1996, known as the ‘written particulars’ The implied terms that provide rights and obligations for the employer and the employee The protections a restraint of trade clause provides to an employer when an employee leaves the business

EMPLOYED OR SELF-EMPLOYED? The difference between an employee and a self-employed person is of crucial importance for a number of reasons. Only employees qualify for:

Social Security payments, such as jobseeker’s allowance, statutory sick pay, etc;

employment protection rights, such as unfair dismissal, redundancy payments, minimum notice on termination, etc;

rights under the Sex Discrimination Act 1975; the Race Relations Act 1976; Pt II of the Employment Rights Act (ERA) 1996 (unlawful deductions from wages); and the Disability Discrimination Act 1995 are the significant exceptions – their coverage extends beyond employees to independent contractors who personally perform the task. Generally speaking, EC law applies to ‘workers’ , a broader term than ‘employees’;

certain health and safety provisions;

the benefit of the employer’s duty of care at common law to protect employees (such as the vicarious liability of the employer) (see Lane v Shire Roofing Co (Oxford) Ltd [1995]);

taxation under Schedule E to the Income and Corporation Taxes Act 1988, and tax is deducted under the PAYE system, whereas a self-employed person is liable to tax under Schedule D, with its more generous allowances.