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The difference between workers and employees

employment status

Are you a worker or an employee?

Section 230 Employment Rights Act 1996 describes an employee as an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment. The Act describes a worker as an individual who has entered into or works under a contract of employment, or any other contract. Under this contract, the worker undertakes to personally do or perform any work or services for another party to the contract (the employer). The employer is not a client or customer of any profession or business undertaking carried on by worker. The worker is not self-employed (shop workers and betting workers are excluded from this description)

It is important to know whether you are an employee or a worker because it is your employment status that gives you your rights. Employees have more workplace rights. [see You can be a worker even if you’re paid through your own limited company]

Different Contracts

Employment law has made a distinction between employees as those who enter into a “contract of service”, and workers as those who have a “contract personally to perform work”.  Employees have the right not to be unfairly dismissed and the right to receive redundancy payments, as well as other statutory rights. Workers don’t have the same privileges, but have entitlements to statutory rights such as those under the Working Time Regulations 1998. Workers also have the right not to be discriminated against under the Equality Act 2010. [see The terms of your employment contract, Agency workers and temps]

Updated: 14/03/2020


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