Employment contract and employment relationship - Ministry of Economic Affairs and Employment
Employee relations refer to the relationship shared among the employees in an They should complement each other and work together as a single unit. total of the application of individual disciplines. Even if this view is accepted .. The employment relationship is by definition a relationship between an employee . So far, however, attention in both social science and employment law has focused of a narrow definition for the employee side of the employment relationship. and long-term relationship between a single employer and an employee.
All relevant factors will be taken into account in order to determine the status. There is often a fine line between the status of different individuals. Nevertheless, for an individual to be an employee, the following factors must apply. There must be a contract between the individual and the company. The individual must be obliged to perform the work personally duty of personal serviceie he or she cannot have authority to provide a substitute person to do the work. In practice, if any of the four factors above does not apply, the individual will not be an employee of the company — although he or she may be a well worker see below.
Employee Shareholders A new type of employment status was introduced in September Employers may offer employee shareholder status to new and existing staff — although existing staff cannot be forced to agree to this change in their employment status as the arrangement is voluntary. Employee shareholders also have longer notice requirements 16 weeks if they intend to return to work early from maternity, adoption or shared parental leave. The process for offering or accepting a job on employee shareholder status is different from that relating to other employment contracts.
However, this scheme has not been used much and, following the removal of tax exemptions from 1 Decemberit is effectively dead in the water. It is now an unattractive option for individuals although any scheme entered into prior to 1 December will still benefit from the tax exemptions.
Employees and Office Holders There is a further distinction between employees employed under contracts of employment and office holders. The factual details of the relationship should be examined on a case-by-case basis to determine if the director is also an employee. The greater the control that a director has over an organisation and the more shares he or she holds, the less likely it will be that he or she will be found to be an employee by a tribunal.
The Employment Rights Act says that a person is a worker if he or she has entered into or works under a contract of employment or some other contract, and undertakes to do or perform personally any work or services for another party to the contract who is not his or her client or customer.
Some freelancers may work under this type of contract. It can be seen from the definitions that all employees are workers; but not all workers are employees.
Employment contract and employment relationship
The three definitive factors to look for are whether the individual: There are no qualifying periods required before a worker can benefit from these rights. Rest breaks and rest periods. Equal pay for men and women. Health and safety protection. To be accompanied at disciplinary and grievance hearings. Protection in the event of whistleblowing.
Equality of treatment for part-time workers compared to equivalent full-time workers. Employees also enjoy all these rights. Workers can be classified into the following categories. Agency workers are considered in detail in the Agency Staff topic. The Independent Contractor Individuals who operate as self-employed independent contractors have few employment protection rights and are taxed differently. In general, independent contractors will be the people who run their businesses for themselves.Employer & employee relationship
Any contract that they enter into is likely to be a contract between their business and a client or customer — which is more akin to a commercial contract than an employment contract. An individual is likely to be classed as an independent contractor if he or she: Independent contractors do, however, have protection for their health and safety and, in some cases, protection against discrimination under the Equality Act The construction industry has a special scheme for self-employed contractors and subcontractors called the Construction Industry Scheme CIS.
A company often uses a technology platform, which allows the service providers to offer their services to customers at low cost. This is unlikely to be the last word on the issue.
As a result, wrongly classifying an individual as self-employed could lead a company not only to the employment tribunal but also to considerable potential liability for tax and NI. These legal developments have potentially huge implications for present employment models in the gig economy, not least a considerable increase in staff costs that could make some enterprises uneconomic. Acas has published new and updated guidance to help employers understand employment arrangements in the modern workplace, especially in the gig economy.
Umbrella Companies An umbrella company is a company that will act as an employer to agency staff who work under fixed-term contract assignments. The umbrella company will normally sign a business-to-business contract with the recruitment agency and the agency will sign a contract with the client. The agency will invoice the client for completed work, the client pays the agency and the agency then pays the umbrella company.
Labels and Intentions It is open to the parties to a contract to agree that an individual is to be an employee, a worker or an independent contractor. Although this is likely to be a significant factor in determining the employment status of that individual, it will not be conclusive.
A tribunal will look behind the labels and intentions of the parties. In Autoclenz Ltd v Belcher  UKSC 41, the House of Lords provided precise guidance for courts and tribunals in determining employment status when the nature of the arrangement between the parties is in dispute. The question at issue is the true agreement between the parties. The courts and tribunals should focus on the reality of the relationship between the parties, which might not be reflected accurately by the written documentation.
Where there is room for doubt as to whether an individual is an employee or a worker, the employer should — to be safe — treat the person as their employee and deduct income tax at the basic rate and NICs and pay the individual net of these. This offers some protection in the event of an HMRC investigation. Of equal significance is the fact that if a person who was deemed to be self-employed is found to be an employee, then he or she becomes eligible for benefits arising from employee status, including the right to make a claim for unfair dismissal.
He or she pays taxes in a similar way to employees, irrespective of the personal service company or other intermediary that he or she works through.
What is Employee Relations ?
Part-time Contracts Under the Part-time Workers Prevention of Less Favourable Treatment Regulationsemployers must not treat part-time workers less favourably than full-time workers employed on the same type of contract. Part-time employees and workers thus have the same rights to contractual benefits as comparable full-time employees and workers on a pro rata basis.
Such contractual benefits include pay, holiday entitlements, occupational sick pay, access to company facilities and so on. An employer will have a defence to a claim if the less favourable treatment of a part-timer is unconnected to the fact that he or she works part-time or if the treatment is justified, eg if there is a genuine business reason for the different treatment.
A part-time worker must compare himself or herself with a full-time worker who carries out the same or broadly similar work under the same type of contract, who works at the same establishment and who has similar relevant qualifications, skills and experience. Where there are no suitable comparators at the establishment where the part-timer works, he or she may cite a comparator at another establishment of the same employer.
Where a full-time worker moves from full-time work to part-time work, he or she has the right to enjoy the same terms and conditions on a pro rata basis as those he or she enjoyed when working full time. A part-time employee who feels that he or she has been subject to unfavourable treatment may ask the employer for a written reason for the unfavourable treatment. The employer must provide the employee with a response within 21 days of the request being made.
Fixed-term Contracts Fixed-term contracts are contracts that specify when the contract will end, which can be on a specified date, when a specific task or project comes to an end or on the occurrence or non-occurrence of a specified event for example on the return to work of an employee who has been on maternity leave.
The Fixed-term Employees Prevention of Less Favourable Treatment Regulations require that fixed-term employees are not treated less favourably on a pro rata basis in respect of their pay and other contractual terms and conditions than comparable permanent employees of the organisation, unless the employer can objectively justify the treatment.
These regulations apply only to employees, not to workers. The employer must respond within 21 days of the request. If the employer does not agree, then it must justify give reasons as to why it believes the contract remains fixed term. For more information, refer to Fixed-term Contracts in the topic Contracts of Employment. Notice While there is no requirement to have a notice clause in a fixed-term contract, it may in some circumstances be advisable to have one as it allows an employer to end the relationship before the expiry date should it be genuinely necessary to do so.
A project may, for example come to an early end. If there is no notice period in the contract allowing the employer to give notice and end the contract early, the employee may be able to claim damages to cover his or her losses for the outstanding period of the contract. Less Favourable Treatment Employees on fixed-term contracts have the right not to be treated less favourably than comparable permanent employees in relation to: Employees on fixed-term contracts also have the right to be informed of any permanent vacancies that arise within the organisation.
Termination of a Fixed-term Contract Where a fixed-term contract expires and is not renewed, then this is regarded as a dismissal in law. However, provided that the reason for the dismissal is the expiry of the fixed-term contract and not some other reasonand provided that the employer has acted reasonably, the dismissal if challenged is likely to be fair.
One essential action that the employer must take is to consult with the employee in good time before the expiry of the contract, so the potential effects of the non-renewal of the contract can be explained and explored, together with any other opportunities within the organisation. Job Share Contracts Job share contracts occur where two part-timers share one full-time job. Benefits and pay are pro rata according to the number of hours worked.
Variations to standard contracts will be necessary and clarification on the following areas will be required. Procedures for work handover. Procedures for covering the absence of one employee. Requirements to attend meetings, courses, etc outside of normal working hours. Consideration should also be given to what would happen if one partner leaves the organisation or moves to another role.
Options might include whether the remaining partner would be offered the choice to move to full-time working or whether a new job share partner would be sought. Temporary Contracts Temporary contracts are no different from open-ended contracts other than that the nature of their work is short term. Temporary employees are therefore entitled to the same rights and benefits as permanent employees and may be protected by the Fixed-term Employees Prevention of Less Favourable Treatment Regulations See Fixed-term Contracts above.
However, certain employment rights require the employee to have a minimum period of continuous service in order to qualify, namely the right to claim unfair dismissal two yearsthe right to statutory redundancy pay two yearsthe right to request flexible working six months and the right to maternity, paternity, adoption or shared parental pay six months.
Types of Employment Relationship: In-depth | Croner-i
Annualised Hours Contracts The basic principle of annualised hours is that, instead of defining working time in terms of a standard working week, the number of hours to be worked is averaged over the year.
In its simplest form, the calculation of annual working hours is based on the number of weeks in a year multiplied by the number of hours in a working week less the number of holidays and public holidays. Further variable elements such as shift arrangements and overtime will add complexity to the calculation.
Whatever formula is chosen, it is essential that this should be reflected in the contract of employment. As with traditional contracts based on normal working hours, annualised hours contracts should specify whether employees will receive overtime pay for working additional hours.
In addition, an annualised hours contract should make clear: Homeworking Contracts The number of employees working from home is steadily increasing. Employers should always consider if the job and the job holder are suitable for homeworking. Homeworkers may be employees of the company or may be workers. This will depend on a wide range of factors see above.
In general, the particulars of employment for homeworkers follow the standard form for all employees but also take account of the particular position of homeworking. Even though homeworkers typically enjoy a degree of flexibility as regards how and when they do their work, this will not necessarily prevent the person from being an employee of the company.
For this to be the case, however, there must be minimum obligation on both sides ie to provide work and to do the work provided. For example, although the hours of work may not be specified eg where payment is by piecework alonethere must be some minimum obligation on the employee to complete the tasks allocated within a certain timeframe.
A deductions clause allowing the employer to make deductions from wages if work is not of the required standard will enable the employer to impose certain standards of quality on the homeworker.
The employees must share a good rapport with each other and strive hard to realize the goal of the organization.
They should complement each other and work together as a single unit. For the employees, the organization must come first and all their personal interests should take a back seat. Every individual shares a certain relationship with his colleagues at the workplace. The relationship is either warm, so-so or bad.
The relationship can be between any one in the organization - between co workers, between an employee and his superior, between two members in the management and so on. It is important that the employees share a healthy relationship with each other to deliver their best performances. An individual spends his maximum time at the workplace and his fellow workers are the ones with whom he spends the maximum hours in a day.
No way can he afford to fight with his colleagues. Conflicts and misunderstandings only add to tensions and in turn decrease the productivity of the individual. One needs to discuss so many things at work and needs the advice and suggestions of all to reach to a solution which would benefit the individual as well as the organization.
No individual can work alone. He needs the support and guidance of his fellow workers to come out with a brilliant idea and deliver his level best. Employee relations refer to the relationship shared among the employees in an organization. The employees must be comfortable with each other for a healthy environment at work. It is the prime duty of the superiors and team leaders to discourage conflicts in the team and encourage a healthy relationship among employees.
Life is really short and it is important that one enjoys each and every moment of it. Remember in an organization you are paid for your hard work and not for cribbing or fighting with each other. There is so much more to life than fighting with each other. Observation says that a healthy relation among the employees goes a long way in motivating the employees and increasing their confidence and morale. One starts enjoying his office and does not take his work as a burden.