Would the removal of “worker” status affect the STEM sector’s workforce?
In recent years, the use of casual staff has been increasing in all sectors and industries, including the STEM sector. Following the pandemic, this trend has grown within the UK, leading to Scotland recently being named the “zero-hours contracts capital of the UK” by the Office for National Statistics.
In order to be a “worker” in law, individuals must deliver any services personally and must not be in business on their own account. “Worker” status bridges the gap between the autonomous self-employed individuals who dictate when, how and to whom they provide services and the employed person who has very little flexibility at the workplace and whose hours of work, role and duties are defined and controlled by their employer. Of particular note is the fact that “workers” do not have the same employment rights or protection as employees, in particular the right not to be unfairly dismissed. As the number of Employment Tribunal claims for unfair dismissal where compensation has been awarded has risen, it is unsurprising that employers are choosing to engage workers on a more flexible basis, reducing the exposure to such claims.
Against that backdrop, the Chartered Institute of Personnel and Development (CIPD) published its Manifesto for Good Work on 20 September 2023. Amongst other recommendations, the Manifesto puts forward that “worker” status should be abolished. The Manifesto suggests that this would improve the protection of workers’ rights and recommends that a single enforcement body should be established. The Manifesto goes on to outline that this enforcement body would be responsible for enforcing workers’ rights under the Equality Act 2010, carrying out investigations and enforcing action against their employer.
At this stage, the Government has not confirmed whether it will take on board the recommendations. If “worker” status was to be abolished, employers would need to consider whether their former workers’ roles are needed and if so, whether they should be treated as employees or self-employed contractors going forward. This would likely require an internal audit of working arrangements. Once the correct status had been established, suitable documentation would need to be issued to relevant employees/contractors, documenting the revised working relationship.
Whilst there are no plans to abolish “worker” status at present, employers in the STEM sector and beyond should ensure that those who they are treating as “workers” fit into this status from a legal perspective. This ensures that they are being treated correctly from both an employment law and tax perspective.
If you have any questions related to current staff working arrangements, please do not hesitate to contact our team of dedicated employment law experts.
This update contains general information only and does not constitute legal or other professional advice.