We’re coming into the one of the busiest periods of the year for seasonal working, and subsequently, entering into a stretch of uncertainty for many HR professionals. A survey by Careerbuilder.co.uk this month found that 39 per cent of employers were planning on hiring seasonal workers for the summer, with 81 percent of these saying they’d consider them for a permanent position. But, how does employing temporary workers, compare to employing permanent staff? Here, Karen Bexley, head of employment law at leading commercial and private client law firm MLP Law, discusses how HR professionals can best manage legalities around seasonal workers.
With more emphasis than ever being placed on the bottom-line and squeezing every ounce of value from each employee, businesses are keener than ever to build up a flexible workforce, to deal with commercial fluctuations and seasonal demands. The appointment of temporary workers is now becoming increasingly popular, and can provide an ideal solution to various business demands, as well as helping to drive unemployment levels down, and equipping workers with additional skills and knowledge.
As we hit one of the peak times in the year for seasonal hires, an increasing number of businesses are enquiring about the legalities facing them when it comes to permanent vs. temporary staff. Undeniably, employee status is an extremely complicated area, and one that very few businesses truly know and understand.
With that in mind, what should HR professionals consider when recruiting seasonal staff into the workforce?
Worker vs. employee
Firstly, it is worth noting that terms such as ‘casual worker’, ‘temporary worker’ and ‘seasonal worker’ actually have no legal meaning. To assess an individual’s legal rights we have to establish whether they are classed as a worker, employee, employee shareholder, or self-employed. Although it may seem obvious whether someone is an employee or not, the answer is not always that straightforward. Even the courts sometimes struggle trying to figure it out.
Knowing this is crucial though, as it determines what, if any, employment rights staff are entitled to. For instance, only employees can claim redundancy payments, notice pay, unfair dismissal, the right to receive written explanations for dismissal, as well as a number of rights relating to family leave, including parental leave and paternity leave, and the right to flexible working.
Once employee status has been decided, HR professionals should put their mind to that certain legal status, and ensure their actions, and those of the company, support that.
Employees
It may seem obvious, but a good starting point here is determining whether there is a contract between the parties – be that written or verbal. An employee is classed as a person employed under a contract of employment. For this, three key elements must be present:
- The employee must undertake their work personally and can’t send a substitute to replace them should they be ill or unable to attend
- There must be a ‘Mutuality of Obligation’ between the parties – which means employees must be offered work and accept the work offered by the company
- The employer must have a sufficient amount of control over the work the employee does
An employee has the highest level of protection, the level of which, depending on the type of employee they are. For example fixed-term and part-time employees are each protected by additional regulations (Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 and Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000) that don’t apply to permanent full-time employees.
Workers
Alternatively, a causal worker may have no right to be offered work and has no obligation to take up any work offered to them by an employer, which would usually mean they fall into the ‘worker’ category. Those that operate on a casual, freelance, or self-employed basis tend to be classed as ‘workers’.
Workers are entitled to many of the same rights as employees. These, for example, will usually include:
- National minimum wage
- Paid annual leave
- Rest breaks
- Protection under data protection
- Protection under the equality act against discrimination
However, they wouldn’t be entitled to some of the additional rights that employees would, for example:
- The right not to be unfairly dismissed (after 2 years’ service)
- The right to redundancy payment (after 2 years’ service)
- Family friendly rights e.g. statutory maternity, paternity, adoption pay and leave
- Minimum notice periods on termination
Underperformance
Performance issues crop up regularly when it comes to seasonal workers. As temporary staff are usually on a short-term contract, you usually won’t have long to wait until their term is up and you can end the partnership on good terms. However, if you have employed the temporary worker on a fixed term contract you need to ensure that you still have the right to terminate before the end of the fixed term. You also need to ensure that any termination or non-renewal of a temporary contract doesn’t give rise to claims of discrimination.
Review employment status frequently
It’s worth reviewing the status of employees on a regular basis, as, in determining an individual’s employment status, both the employment tribunal and HMRC will assess the documentation and the reality of the relationship on a day-to-day basis. As a result, employers and HR professionals could be subject to claims if they are found to be documenting this information incorrectly.
The 2011 case of Autoclenz Ltd v Belcher and others is a good example of this, after the Supreme Court affirmed that, where a party asserts that a written term does not reflect the reality of the agreement, tribunals and courts may look outside the terms to determine the true nature of the agreement.
So, what next?
The lines between employment statuses can easily be blurred, and the issue is still daunting for HR professionals and employers everywhere. Ultimately, maintaining a good temporary worker policy is extremely beneficial for a business – not only to protect its reputation and for easier working processes, but also to keep good relationships with returning temporary workers, should they be needed again in future.
Generally, employers that have a genuine need for flexible working arrangements, especially those in seasonal-specific industries, shouldn’t have anything to worry about. Temporary workers can be great for a business, and providing HR professionals invest the time in getting the right contractual documentation in place, and keeping the relationship requirements under regular review, there shouldn’t be an issue.
Karen Bexley is a solicitor at MLP Law, one of the leading commercial law firms in the North West.
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