Employment status and pensions In house lawyers forum – spring 2013

The general test for the existence of a

contract of service set out in Ready Mixed

Concrete (South East) Limited v the

Minister of Pensions and National Insurance

[1968] 2 QB 497 is still the correct starting

point

• mutual obligations to provide work in

return for a wage or remuneration

• the employer has an element of control

• the other terms and conditions are

consistent with an employment

relationship

• statutory definition of an employee vs. a

worker

• why does it matter?

– employee rights vs. worker rights

Recent case law

• X v Mid Sussex Citizens Advice Bureau

and another [2012] UKSC 59

• a voluntary worker who had no legally

binding contract and was therefore not

obliged to provide any services was not

considered to be in ‘employment’ for

discrimination purposes

• O’Brien v Ministry of Justice [2013] UKSC

6

• following ruling from the ECJ, the

Supreme Court held that

– the claimant was a part-time worker

within the meaning of the framework

agreement on part-time work

• O’Brien v Ministry of Justice [2013] UKSC

6

• following ruling from the ECJ, the

Supreme Court held that

– there was no objective justification for

the discrimination regarding provision of

pensions between full-time and part-time

judges

• Stringfellows Restaurants Ltd v Quashie

[2012] EWCA Civ 1735

• dancer at Stringfellows was found not to

be an employee

– dancer took the economic risk – paid

exclusively by 3rd parties

– the parties accepted that the dancer

should have self-employed status

• White and another v Troutbeck SA [2013]

UKEAT 0177/12

• question of ‘control’ revisited

• control is not determined by whether the

worker has day-to-day control over their

own work but rather by whether a

contractual right of control over the

worker has been retained

• new rules came into force on 30 June

2012

• eventually all employers will be obliged

to automatically enrol eligible workers

into a pension scheme

• employers will become subject to their

auto-enrolment duties from their

relevant staging date

Who is a ‘jobholder’?

• a worker who is

– working (or ordinarily working) in the UK

under a contract

– aged at least 16 but under 75

– paid qualifying earnings

Who is an ‘eligible’ jobholder?

• at least 22 and not reached state

pension age

• earn more than the earnings trigger in a

relevant pay reference period

• not already an active member of their

employer’s qualifying scheme at the

date they become eligible for auto-

enrolment

Who is a ‘worker’?

• someone who has entered into or works

under

– a contract of employment, which must

be a contract of service or

apprenticeship whether express (in

writing or oral) or implied

Who is a ‘worker’?

– any other contract under which the

individual undertakes to do work or

perform services personally for another

party to the contract. This contract can

be express (in writing or oral) or implied.

But it cannot be a contract where the

other party is a client or customer of the

individual

When must an eligible jobholder be auto-

enrolled?

• from the day the jobholder meets the

qualifying requirements (the automatic

enrolment date – AED)

• employers will need to be aware of

when their employees become eligible

for auto-enrolment

Get in touch if you have any questions or

would like further information.

t +(0)121 237 3992

e richard.nicholas@brownejacobson.com