UK : Seconded and Casual Workers

United Kingdom: Secondment And Casual Workers 


Secondment


This is an arrangement where the original (or seconding) employer "lends" their employee (the secondee) to another employer (the host). The host  normally pays the original employer for the salary and other costs / expenses arising from the employment. The original employer may also charge a fee. 


The idea of a secondment is that the secondee will remain employed by the original employer for the duration of the secondment and will return to the original employer at the termination of the secondment. 


There can be benefits to all concerned in such arrangement – the original employer can (for a set period) reduce their salary costs and perhaps avoid / reduce redundancies. The secondee may gain valuable new experience and will preserve a number of benefits and entitlements e.g. continuity of employment with the original employer. The host can provide staff cover for e.g. short term projects / absenteeism. The arrangements can also build links between the original employer and the host.

The original employer would (unless there was a clause in their contract allowing secondment – which would be unusual) require the employee to agree to a secondment before this could happen without it being a breach of contract.


A written secondment agreement should be entered into so that all parities are clear what their rights and obligations are. 


The following issues would normally be required to be addressed or considered (and often many more depending on the precise nature of the secondment).


Who is the employer? 


Despite the intention of the original employer and the host the employee may in fact end up being an employee of the host. If the employee becomes an integrated part of the hosts' workforce and managed directly by the host the employee is likely to become an employee of the host. 


Therefore to seek to avoid this –

• The secondee should not owe any duties directly to the host but only to the original employer.
• The host should not owe any duties to the secondee.
• The original employer should retain overall control of the secondee.
• The original employer should continue to deal with any matters that involve the secondee (e.g. appraisals, disciplinary & grievance matters etc).
• The secondee should not become integrated into the host's organisation.

Even if the host was not the employer it is likely that the employee would be deemed to be a worker of the host. That would entitle the worker to a number of rights from the host e.g. holiday pay.


Discrimination: a worker may bring a range of unlawful discrimination claims against the host (age, sex, race, nationality, sexual orientation, religion and belief and disability).


What are the employee's duties going to be? Are these the same as the work they undertook for the original employer or will it be something else?
Management of the employee – how is this going to work? 


If the host employer takes on direct management of the secondee the host may become the employee's employer.


The employees' terms and conditions of employment will continue through the secondment but should the host wish the employee to be bound by particular rules and procedure, confidentially etc these should form part of the secondment agreement.


How is disciplinary / grievance procedures going to work?
What happens if the secondee is absent?
Who bears the costs relating to the liabilities to the secondee (e.g. health and safety) and acts of the secondee during employment? This together with appropriate indemnities should be recorded in the agreement. Is the appropriate insurance in place?
Duty of care – both the original employer and the host are likely to owe the employee a duty of care.
Vicarious liability – both the original employer and the host may be vicariously liable for the act of the secondee.
How is the agreement brought to an end? What notice does each party require to give the other?
Return to original employer – an employee considering a secondment is likely to want to know from the outset what will happen:

• If before the secondment is due to end, they serve notice to terminate their secondment and wish to return to their original employment.
• If, before the secondment is due to end, either the original employer or the host terminates the secondment.
• If, having served the full secondment anticipated by the parties, the secondment ends.

If the secondee is to return to the original employer, a number of questions arise:

• Will they return to their original or another post?
• What will happen if there is no post for them to return to?

Considering and providing for potential eventualities from the outset and setting these out in a clear secondment agreement (whatever form that may take) may avoid disputes once a secondment is commenced or completed.

Casual Workers / Bank Staff

Casual Workers

The term "Casual Workers" has no special legal meaning. However, it is generally used to describe a group of individuals who are engaged across a wide range of industries in many different circumstances. Casual Workers are used in businesses where the need for workers is not constant, for example, where the workflow is variable / seasonal or where it is impossible to predict demand due to external factors.


Casual Workers may be engaged in a number of ways:

• On a zero hours contract, under which the company does not guarantee to provide work and only pays for work done.
• As Bank Staff, where the employer can call on a pool of workers when work becomes available but there is no obligation on the worker to accept it (or for the company to offer it).
• Under an umbrella contract, where the worker is ostensibly engaged on a series of individual contracts but there is an over-arching contract (whether express or implied) that continues even when the worker is not working.

The term casual worker suggests an informal relationship between the parties, with little obligation on either side.


However, companies should not be lulled into a false sense of security, as in some cases, casual workers are employees with the full legal rights that this entails. To complicate matters the employment status of the casual worker can change over time, for example, if their working arrangements develop a regular pattern or they can establish that there is an umbrella contract of employment and so their employment continues during the periods when they are not working. 


There are a number of difficult issues in relation to casual workers that should be addressed when considering entering into such arrangement. These include:

• How to calculate continuity of service (this has a considerable bearing on the workers rights including redundancy pay, notice, holiday pay entitlement etc).

Status


It is important to establish the casual worker's employment status from the beginning of the relationship because this will determine their legal rights and protections and the obligations the employer owes them. There are three broad types of employment status: an individual may be:

• An employee.
• A worker.
• Self employed.

In any consideration of employment status, the main questions likely to be asked are:

• Is the individual required to provide their service personally?
• Is there an obligation on the company to provide work and an obligation on the individual to accept the work provided?
• Does the company exercise sufficient control over the way in which the individual carries out the work for the relationship to be properly regarded as an employment relationship?

Personal service, mutuality of obligation and sufficient control by the company is normally considered as the essential hallmarks of an employment relationship. Establishing whether there is mutuality of obligation is likely to be the key issue with causal workers. There will often be two key issues:

• Whether the workers are employees during the period when they are working.
• Whether the workers can link those periods together by establishing sufficient mutuality of obligation during the periods when they are not working.

Implications of status

I ndividuals who are employees enjoy the highest level of legal protection. For example employees:

• May not be unfairly dismissed.
• Are entitled to a statutory redundancy payment.
• Are entitled to maternity and other family leave and pay rights.

Casual Workers who are not employees may be workers if they provide services personally under a contract and the other party to the contract is not a client or customer of a business carried on by the individual. Workers enjoy lesser protection but still have valuable statutory entitlements, for example:

• To be paid the national minimum wage.
• To a minimum period of paid annual leave and other rights under the Working Time Regulations.

The genuinely self employed, those who are in business on their own account and have no obligation to render personal service, have few employment rights, although they may be protected against discrimination.


During any period of work, a casual worker may be an employee, a worker or self- employed. The issue will also need to be considered as to the status of Casual Workers between engagements. Casual work often involves workers being engaged on a number of short term contracts with gaps in between. A lack of mutuality of obligation during these periods is likely to be fatal to any argument that the casual worker is an employee.

Continuity of Employment

If a Casual Worker is able to establish they are an employee, they will be able to accrue continuous employment. This is important for many rights require an employee to have a qualifying period of employment (e.g. unfair dismissal, statutory redundancy payments etc). This can be straightforward when the engagement is continuous however what about when there are gaps? Whether a Casual Worker can establish that they have the relevant period of continuous service will depend on:

• Whether a global or umbrella contract of employment exists spanning both periods of work (and any absence).
• Whether any absences can be classed as a "temporary cessation of work" or whether an absence is by arrangement or custom regarded as continuing the employment of the employee.

Terms of engagement should be drawn up clearly setting out what the arrangements are and the status of the parties. This documentation will not be definitive and what actually happens in practice is taken into account in the assessment of the status of the worker.


Tax treatment of casual workers


The employment status of workers will determine the tax treatment of any payments made to them. 


Significant liabilities may follow for the company if they incorrectly take the view that the worker is not an employee and fails to deduct tax and national insurance through PAYE, so consideration at the outset of the relationship of any casual worker is required.


Casual workers should not be confused with temporary agency workers who might also be used by an engager to achieve flexibility. In this posting casual / bank workers describes individuals who are engaged directly by the company and not through a third party agency.


Conclusion
There are complex and wide ranging legal issues that arise from secondments and engaging Casual Workers. It is therefore important to have considered these issues in advance and have drawn up appropriate agreements and documentation at the outset clearly setting out what the arrangements are so as to avoid or at least reduce the scope for confusion and dispute later on.