Businesses taking on casual or temporary labour need to be clear on employment status writes Lodders agricultural employment law specialist Faye Reynolds
Farming and land-based businesses which regularly take-on casual or temporary labour to cope with spikes in operational and seasonal work have been warned to ensure employment status is discussed and agreed before people begin work or risk costly legal proceedings.
People running farming businesses often take on casual or temporary labour but fail to ask whether the individual is self-employed, an employee or classed as a worker.
The difference in employment status is significant and getting it wrong can be very costly for the business owner. The nature of someone’s employment status is important as it affects the legal rights and benefits to which they are entitled.
For example, someone who is classed as ‘a worker’ is entitled to some of the same rights as an employee, such as holiday pay and sick pay. However, workers do not have the full employment protection that employees have, such as the right to redundancy pay and not to be unfairly dismissed after two years’ service.
If that person is a self-employed contractor, then these issues don’t arise.
All farm businesses have a duty to record the terms of a person’s employment in any event.
But the way in which agricultural businesses source their staffing needs often means the arrangement is not formally documented.
The absence of a contract or written record of terms does not necessarily mean an individual will not be an employee or worker but the absence of any record does leave plenty of scope for argument and debate.
Disputes regarding this type of employment status can be brought before an employment tribunal. The court would apply a number of tests to determine the employment status, such as the day-to-day reality of the working relationship and the manner in which the individual worked for the agricultural or business.
Situations where an individual uses the farm’s equipment, tools and vehicles, and it is the only business they work for, can be an indicator but not definitive as to whether they are an employee or worker, as opposed to self-employed.
By the time there is a dispute it is often simply too late to do anything about it and the risks of time, costs and potential awards or settlement payments will have already arisen.
The safest process for businesses to follow is to stop and consider the nature of the team working on the farm and their role before they start, and before a situation arises. If new help or staff are brought in, spend time documenting the arrangement properly so everyone is clear from the start.
From January 1 2021, the UK’s immigration system will be transformed when freedom of movement ends, and EU citizens will be subject to the same immigration rules as citizens from the rest of the world.
As a result of restricted migration, if no exceptions are made for agricultural labour it seems likely that the industry will go through structural changes.
For farming businesses, this means if they hire seasonal workers from outside the UK after January 1 2021 they need to ensure they do so in line with UK immigration rules as well as UK employment law rules.
If the employment status of agricultural workers is wrong it will prove to be an additional costly mistake.