Entitlement to paid leave by virtue of agreed contractual terms
and conditions suggests an employment exists. It is normally
inconsistent with a contract for services. The Courts took this
view in Alpine (Double Glazing) Company Ltd v The Secretary of
State for Social Services (1982) (unreported) in which it was held
that the company's service engineers were employed.
Not all employees have a contractual entitlement to paid
leave, particularly where the engagement is short-term and hence
little significance can be attached to their absence in such
circumstances.
Where entitlement to paid leave exists solely because of the
rights a worker has under the Working Time Regulations, it is not a
factor to be taken into account in determining status. Employed
workers and some self-employed workers acquire rights to paid leave
under the Regulations if they have been continuously engaged for 13
calendar weeks. However, if any changes were made to contracts
giving rights to paid leave, these should be taken into account in
the normal way.
Entitlement to Statutory Sick Pay (SSP), Statutory Maternity
Pay (SMP) and pension rights are consequences of employment and are
not indicators of employment.
Only employees are entitled to Statutory Sick Pay(SSP).
Normally membership of a firm's superannuation fund is open only to
employees. In both cases the right to participate is an indication
of the relationship the parties think they have created rather than
a test of whether an employment exists.
Both parties may genuinely believe a worker is
self-employed. But, if the worker is in fact an employee,
entitlement to the rights of an employee will follow. Entitlement
to SSP etc does not determine employment status. It is the other
way round.
The absence of benefits such as sick pay, pension scheme
membership, maternity rights, etc. in a short-term engagement will
almost certainly be because they are inappropriate in such
circumstances. Their absence may therefore be of little relevance
in this type of situation and certainly will not inevitably lead to
the conclusion that an employment does not exist.
On the other hand, the existence of such entitlements in a
long-term part-time engagement can be regarded as a strong
indicator that an employment exists.
The important point to remember though is that the presence
or absence of these rights does not necessarily determine whether a
worker is employed or self- employed. On the contrary, it is the
employment status (and the length of the contract) which determines
whether the worker is entitled to many of these rights.
