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The difference between workers and employees


Are you a worker or an employee?

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] 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]


Employees

Section 230 (1) Employment Rights Act 1996 (ERA 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. A ‘contract of employment’ is a contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing [ERA 1996 section 230(2)].

If you are employed on a fixed term, you have additional rights under the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002 not to be treated less favourably than a comparable permanent employee.

Case law has established that in a valid contract of service you;

  • provide your own work and skill in the performance of some service in return for pay
  • in performing that service, you are subject to a sufficient degree of control by your  employer
  • there is ‘mutuality of obligation’ between you and your employer. [ERA 1996 section 230(3)]

Mutuality of obligation means that you HAVE to do the work that your employer tells you to do, and your employer MUST pay you whether or not they give you work to do. In some circumstances there is an obligation on your employer to provide you with work.

Employment rights

You have all the statutory entitlements of an employee including the right not to be unfairly dismissed, to receive redundancy payments, the right to a written statement of particulars of employment as well as maternity and paternity leave and pay. [see EOC Employees Rights]


Workers

Section 230(3) ERA 1996 describes a worker as an individual who has entered into or works under a contract of employment, or any other contract. Under this contract, you undertake to personally do or perform any work or services for another party to the contract (your employer). Your employer must not be a client or customer of any profession or business undertaking that you are carrying out and you must not be self-employed (shop workers and betting workers are excluded from this description).

Worker rights

Workers also have protections under employment law and must not;

As a worker you have statutory entitlements which include the following;

 

 


Updated: 10/07/2020

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