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Employment status and contracts of employment
Are you an employee or self employed?
It is very important to find out what your employment status is. All employment rights, such as right to pay for work done, right to paid holiday, right not to be unfairly dismissed and so on, rely on you being an employee.
It is common for an employer to call someone self-employed, or a ‘casual worker’ or a ‘trainee’, when that person is really an employee. Employers do this in order to avoid having to pay tax and national insurance for their employees and to try to avoid them having employment rights. It is irrelevant what your employer calls you, whether you are known as self employed, an agency worker, a casual worker, etc. In addition, just because you pay tax and national insurance as a ‘self-employed’ person, it does not automatically follow that you are actually self-employed rather than an employee. What matters is what happens in practice about how you work, who decides what work you do and what you are expected to do by your employer.
How to tell the difference between an employee and a self-employed person
The following factors will all help you decide whether you are an employee or self-employed:-
 does your employer tell you what work to do and how to do it (even if you are left alone to actually carry out the work). Does your employer provide you with work, or do you have to go out and find your own work to do. If your employer controls the work to be done and provides the work, you will be an employee
 how you are paid. If you are paid a regular amount of pay at regular intervals, rather than being paid per job done, this indicates you are an employee
 who is responsible for getting the work done. If you have to find someone else, such as a sub-contractor or a friend, to do the work if you are unable to, this would indicate you are self-employed. If your employer finds someone else to do the work if, for example, you are off sick, this would indicate you are an employee
 who provides tools and materials to do the work. If your employer is responsible for supplying main tools and machinery and materials, with you responsible for supplying only a few of your own tools, you are likely to be an employee.
If after reading through the factors under the heading How to tell the difference between an employee and a self-employed person you think you are an employee, then you will have a contract of employment. This does not have to be written down. A contract of employment is agreed between the employer and the employee and can be a verbal contract (see under heading What is a contract of employment ).
If after reading the factors above you are not sure whether or not you are an employee, or you think you are employed on a genuine casual basis or are employed by an agency, you should speak to an experienced adviser, for example, a Citizens Advice Bureau, about your employment status. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB .
What if the employer wants an employee to switch to self-employed status
If your employer is asking you to sign a new contract which says that you are self-employed rather than an employee, signing the contract does not mean that you automatically become self-employed.
If you are being asked by your employer to sign a new contract you should consult an experienced adviser, for example, a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB .
What is a contract of employment
There is always a contract between an employee and employer. You may not have anything in writing, but a contract will still exist. This is because your agreement to work for your employer and your employer’s agreement to pay you forms a contract.
A contract gives both you and your employer certain rights and obligations. The most common examples are that you will have a right to be paid for the work you do. Your employer has a right to give reasonable instructions to you and for you to work at your job. These rights and obligations are called contractual terms.
The rights that the you have under your contract of employment are in addition to the rights you have under law, such as, for example, the right to a national minimum wage and the right to paid holidays.
For more details about what rights an employee has by law, see Basic rights at work .
Generally, you and your employer can agree to whatever terms you wish to be in the contract, but you cannot agree to a contractual term which gives you less rights than you have under law (see under heading How the rights in an employee’s contract relate to rights in law ).
A contract of employment will usually be made up of two types of contractual terms. These are:-
 express terms, (see below)
 implied terms, (see below)
 Express contractual terms
Express terms in an employment contract are those that are explicitly agreed between you and your employer and can include:-
 amount of wages, including any overtime or bonus pay
 hours of work, including overtime hours (there is a legal limit for most employees on how many hours they can work per week)
 holiday pay, including how much time off you are entitled to (most employees are entitled by law to paid holiday - they may be entitled to more under their contract)
 sick pay
 redundancy pay
 how much warning (notice) the employer must give you if you are dismissed.
The express contractual terms may not be in one written document, but may be in a number of different documents. They may not be written at all. The express terms may be found in:-
 a written statement of main terms and conditions (see under heading Employee’s right to written details about the employment contract )
 any letters sent by your employer to you before you started work
 anything you were asked to sign when or since you started work
 instructions or announcements made by your employer on a notice board at work
 an office manual.
You may not have possession of all the relevant papers. You may be able to get copies from your Personnel Department, foreman, or trade union representative.
You should always keep any papers given to you by your employer.
Because a contract will still exist even if there is nothing written down, anything which was said to you by your employer about your rights, and anything which you agreed verbally should be recorded.
If you are an employee who does not have a written contract, you should consult an experienced adviser, for example, a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB .
 Implied contractual terms
Implied terms in an employment contract are those which are not specifically agreed between the employer and employee.
Implied terms are:-
 general terms which are implied into most contracts of employment (see below)
 terms implied by custom and practice (see below)
 terms from agreements made with the employer by a trade union or staff association.
General implied terms
The following duties and obligations will usually be implied into any contract of employment:-
 the employee and employer have a duty of trust to each other. This means, for example, that if you give your employer’s industrial secrets to a competitor, you will have broken an implied contractual term of trust
 the employer and employee have a duty of care towards each other and other employees. This means, for example, that the employer should provide a safe working environment for the employee and that the employee should use machinery safely
 the employee has a duty to obey any reasonable instructions given by the employer. There is no legal definition of reasonable, but it would not be reasonable to tell an employee to do something unlawful, for example, a lorry driver should not be told to drive an uninsured or untaxed vehicle.
Terms implied by custom and practice
When dealing with a particular employment problem, there may be no express contractual term covering the matter. In such a case, it is helpful to look at what has happened to other employees in the workplace. This is because if other employees have been given a right, you can argue that you also have the right under ‘custom and practice’.
Trying to show that you have a right through ‘custom and practice’ can be complicated and you should consult an experienced adviser, for example, a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB .
What happens if part of the contract is broken
A contract may be broken (known as a breach of contract) if either you or your employer does not fulfil a contractual term. You may be able to sue your employer for damages if they breach the contract and your employer may be able to sue you if you breach the contract. For example, if your employer does not give you proper notice if you are dismissed, this would mean your employer had breached the employment contract.
If your employer breaches a right that as an employee you have by law, for example, your employer does not pay you for the work you have done and so makes an illegal deduction from your wages, you have the right to go to an employment tribunal to claim the money back.
If you are in this position you should consult an experienced adviser, for example, a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB .
Employee’s right to written details about the employment contract
All employees, regardless of the number of hours they work per week, are entitled to receive a written statement from their employer within two months of starting work. The statement describes the main terms of the contract of employment. You are entitled to the statement even if your job finishes before the initial two months, as long as the job was supposed to last for more than one month.
An employee who wants a written statement may request one verbally or in writing. It is usually best to request the statement in writing and keep a copy of the letter, so that you can prove you asked for the statement.
 What written details must be given
The written statement must include by law:-
 the names of you and your employer
 the date you started work
 the amount of pay and how often you will be paid, for example, weekly or monthly
 the hours of work
 your holiday entitlement, including how many days off you are entitled to and what your holiday pay will be, if any
 how much warning (notice) you are entitled to if you are dismissed and how much warning you must give the employer if you want to leave the job
 the title of the job
 where the job is based, for example, whether you will have to work in more than one location
 what the disciplinary and grievance procedures are in the workplace.
You must also be given the following information:-
 what sick pay you are entitled to
 whether you can join the employer’s occupational pension scheme, if there is one
 the detailed rules of the disciplinary procedure at the workplace.
The above information does not have to be included in the written statement of term and conditions. It can be given in, for example, a staff handbook which all the employees can have access to.
An employer may try to dismiss you for asking for the written terms and conditions of your job, even though you are entitled to this information by law.
If you think that your employer may dismiss you if you ask for the written statement of terms and conditions, you should consult an experienced adviser, for example, a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB .
How the rights in the employee’s contract relate to rights in law
Most employees have rights given by law. These are called statutory rights. They are in addition to any rights you have under your employment contract. Statutory rights which you may have include:-
 a right to a written statement of the terms of employment
 a right to an itemised pay statement
 a right to maternity leave
 a right to pay in compensation for being made redundant
 a right not to be unfairly dismissed.
For a full list of statutory rights, see Rights at work in Basic rights at work .
Generally, you and your employer can agree any terms in the employment contract. However, you cannot agree to a contractual term which gives you less rights than your statutory rights. If you have agreed to a contractual term that gives you less than your statutory rights, for example, you have agreed that you will not take maternity leave, your employer will not be able to enforce the contractual term. You will still have a legal right to maternity leave.
There are particular rules regarding health and safety at work. For example, if you believe that a piece of equipment or a process may be dangerous, you may have a right to refuse to work with it and insist that your employer takes adequate safety measures.
If your employer is trying to enforce a contractual term which gives you less than your statutory rights, you should consult an experienced adviser, for example, a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by e-mail, click on nearest CAB .
 People on fixed term contracts
There are special rules about employees who are on fixed term employment contracts, which means the contract contains a date when it will end.
If you are an employee who is on a fixed term contract you should consult an experienced adviser, for example, a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB .
 Probationary periods
It is common for employers to treat new employees as being in a ‘probationary’ period when they first start work. The employer may then argue that you can be dismissed while you are in this probationary period with no warning (notice). Employers also often argue that employees do not have usual employment rights to, for example, pay or holidays, during this ‘probationary’ period.
There is no such thing in law as a ‘probationary’ period. Once you have started work, the number of weeks you have worked begin on the day you start, not from some time when a ‘probationary’ period is over. Your full contractual rights also start from the first day of work, unless the contract says otherwise.
 Employees employed on a series of short term contracts and seasonal workers
Employers may employ employees on a series of short term contracts, usually lasting for about a year, but always less than one or two years, to try to avoid the employee gaining employment rights. They may also employ the employee only during a particular season, for example, during the summer to pick fruit, but the employee may be expected to go back and work for that employer each year during that season.
If you have been employed on a series of short term contracts, or if you are a seasonal worker, you should consult an experienced adviser, for example, a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB .
 Employer calls employees trainees or casual workers
Your employer may call you a ‘trainee’ or ‘casual worker’ in the employment contract to try to prevent you being protected under employment law. As a ‘trainee’ or ‘casual worker’ you will have the same employment rights as other employees, unless your contract of employment says differently. It is not important what you are called, this does not give you more or less rights. The important point is what is in the contract. Also, a contract cannot take away your statutory rights (see under heading How the rights in the employee’s contract relate to rights in law ).
If you are in this position you should consult an experienced adviser, for example, a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB .
Changes to contracts
You may have a problem at work because your employer wants to change the contract. In effect it is a proposal to change the contract of employment if, for example, your employer wants to:-
 change the type of work that you do
 change your place of work
 cut your pay
 change the number of hours you work.
In theory, your employer cannot change a term in your contract without you agreeing to the change. In practice, you may be faced with the choice of accepting the change or losing the job. However, you may be able to take some action against the employer if you disagree with the change.
Before you can decide what your rights may be regarding a proposed change to your contract, it is essential to discover what the existing contract says on the issue. You should look carefully at your copy of any written contract and/or the written statement of terms and conditions of employment (see under heading Employee’s right to written details about the employment contract ). If you do not already have one, it may be advisable to ask the employer for a written statement of terms and conditions.
It is important to remember that taking action against an employer over a change in the contract may mean that you could lose your job. You should therefore consult an experienced adviser, for example, a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB .
Contracts without specific working hours
 Zero contracts and key time contracts
‘Zero contracts’ are contracts of employment which do not specify any number of hours that the employee will be required to work. They are common for shop workers. The contract says that instead of working a specific number of hours per week, you must be ready to work whenever you are asked.
‘Key time’ contracts are those where you are guaranteed some work, but are not guaranteed regular hours each week.
The problem with zero and key time contracts is that you are only paid for the time you work, so even if you have to wait on work premises or be at home waiting by the phone, you will not be paid for this waiting time.
 What if the contract does not give the number of hours which you must work
It is a legal requirement that all employees must be given a written statement of their terms and conditions of employment (see under heading Employee’s right to written details about the employment contract ). This must include terms and conditions about hours of work, including normal weekly hours, any overtime requirements, the rate of pay and how often it is paid.
When a contract does not give details of the number of hours which must be worked each week, but only says that ‘hours of work will vary each week’, it is still a legal contract and cannot be challenged in the courts.
If your contract states that you have no set hours of work and that you must be available to work, but what actually happens is that you work the same number of hours each day/week, then it may become an implied term of your contract (see under heading What is a contract of employment ) that you do have a set number of hours to work each day/week. If you are willing to work this number of hours but are given no work to do you may be entitled to be paid your normal wage for these hours.
If you are an employee in this position you should consult a specialist employment adviser, for example, a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB .
Illegal contracts of employment
You will have an illegal contract of employment if:-
 you get all or part of your wages paid cash in hand; and
 tax and national insurance contributions are not paid on the wages when they should have been; and
 you knew you were being paid in this way to avoid paying tax and/or national insurance contributions.
A contract will also be illegal if it is for an immoral or illegal act.
A contract of employment will not be illegal if only one of the parties is not declaring the payments and/or making appropriate deductions.
If a contract tries to take away your statutory rights, it is not an illegal contract but it cannot be enforced in law (see under heading How the rights in the employee’s contract relate to rights in law ).
If you suspect you may have an illegal contract of employment you should consult an experienced adviser, for example, a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB .
Agency employees
If you are getting work through an agency you may be:-
 treated as an employee of the agency; and/or
 self-employed; and/or
 employed by the organisation you are working in.
There are special rules about how agency workers pay tax and national insurance contributions and about how to decide if they are employees or self-employed.
If you have any queries about being an agency employee you should consult an experienced adviser, for example, a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB .
Fidelity bonds/indemnity bonds
A fidelity bond or indemnity bond is a type of insurance policy that employers take out to insure themselves against their employees behaving dishonestly. The information which will be required about the employee will vary from one insurance company to another, and will depend on the type of policy the employer has taken out. Sometimes your employer will just have to supply your name to the insurance company, sometimes you will have to sign a statement saying that you have no previous criminal convictions. If a conviction is spent under the Rehabilitation of Offenders Act, you do not have to declare it.
If the information about you is held by the insurance company on a computer, then you have the right to see it under the Data Protection Act.
For more details see Data Protection Act 1984: Introduction to the Act in Using the law to protect your information .
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