The question of employment status – specifically, whether or not an individual is an employee and therefore entitled to all the protections and benefits afforded by the Employment Act 2000 – has become an increasingly hot topic in recent years.
This has been driven by a rise in flexible working arrangements and the so-called 'gig economy' as well as by employers seeking creative ways to reduce costs in a restrained economic environment. With this in mind, the Employment Act 2000 was amended in 2021 to allow the Ministry of Economy and Labour to publish guidance to assist in determining whether a person is an employee or an independent contractor.
The Ministry recently published 'Independent Contractor Guidance' to explain the key features of the employee-employer relationship and how this differs from an independent contractor relationship. The Guidance should aid employers and workers in assessing their employment relationship and reduce the misclassification of working arrangements, but it will also be taken into account by Employment Tribunals faced with determining issues of employment status. It will be particularly relevant to organisations who use temporary staff or ad hoc labour, including those in the retail, construction and gig economy sectors, as well as those who commonly use consultant arrangements, including IT, human resources and advertising businesses. The Guidance is expected to come into effect on 1 April 2023.
This briefing discusses the following 12...
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