The employment relationship

• DOI: https://doi.org/10.13169/instemplrighj.3.1.0062
• Pages: 62-72
• Published date: 01 January 2020
• Date: 01 January 2020

The employment relationship

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Introduction

Workers gain access to the labour rights associated with employment

depending on the type of employment relationship that links them to their

employers or principals. Typically, the condition that determines the applica-

tion to employees of the employment protection provisions contained in UK

labour law statute is the existence of a ‘contract of employment’ with an

‘employer’(as definedby theEmployment RightsAct (ERA)1996, s.230(1)

and (4)). Workers who offer their work or services to their employers or prin-

cipals under different types of work contracts or relationships are likely to fall

outside the scope of application of UK employment protection legislation, or

receive a more limited set of protections, for instance if their status is that of

an s. 230(3)(b) ‘worker’, or that of an ‘employee shareholder’ as defined by

s.205AERA1996.

The consequences of these shortcomings in the legal framework sustaining

the regulation of the employment relationship are sobering. Millions of work-

ers, many of them defined by their contracts as self-employed, are trapped in

insecure forms of work that do not allow them decent working and living

standards. These insecurities inevitably affect workers’ voices, their enjoy-

ment of individual and collective labour rights, and their participation in

society as active citizens. A lack of legal certainty and predictability in the

formulation of work and business contracts for a growing number of workers,

employers, and customers alike, has generated its own insecurities and,

often, extensive litigation costs.

The economy is increasingly experiencing a long tail of businesses thriving on

low-paid, often precarious, labour. These businesses feel disinclined from

investing in productivity-enhancing technologies or in training an insecure

workforce with few ties of loyalty. Inequalities and poverty are rising, engen-

dering their own individual and social costs. Rising inequality and poverty also

contribute to the falling proportion of wages compared to profits, one effect

of which is to reduce demand in the economy. These employment practices

also have fundamental implications for the way the welfare state is funded

and operates, and there are growing concerns about false self-employment

shifting the burden of safety net support from the employer to the welfare

state at the same time as reducing tax revenue.

The employment relationship