Essentially, someone who is unaware that they have become a legal employer, due normally to the informality of the arrangements. Good examples are people who hire people to provide services to them in their own homes.
Whilst it is generally fairly well-understood now that if you take on a Nanny to look after your children, you are doing so as an employer, an area where we find people are less aware of their obligations is that of hiring a carer to provide essential services in someone’s home. Often people believe that they are hiring someone on a self-employed basis, or simply have not realised that they have taken on employer obligations at all.
The legal test for an employment relationship is not particularly helpful, since it simply states that an employee is someone who has a “contract of employment”.
There are 3 main principles that would determine that someone had an employment contract:
Personal service simply means that the person contracting is required to do the work themselves – differentiating it from a company that obtains a contract and can send any of its employees to fulfil it.
If you hire a company to provide you with carer services, and they can send any of their employees to provide this, then it is unlikely to be an employment relationship. Many people, however, hire directly with the carer, and this is where the issues normally arise.
Control is a much-disputed concept, but essentially means that the person hiring is instructing the person being hired in what to do and how to do it – when it will be done, the time and place, and how.
The level of control will depend on the job in question and the skills being used, but the employer, if it is an employment contract, essentially has the final say over what is done and how it is done. Normally, someone hiring a carer will hire them to undertake specific tasks at specific times and in the hirer’s home, which would be likely to satisfy this test.
Finally, mutuality of obligation is that one has to provide the work and the other does it – rather than someone who is hired to perform a single task and then has no obligation to do more nor any right to be offered more. Normally, the carer relationship would satisfy this.
It is often the case that someone needing care in their own home will hire someone personally to provide this – care is an intimate service and people tend to want someone who they feel comfortable and safe with.
This tends to be an agreement that the carer will come to the hirer’s home, provide such services as the hirer requests, and in the way the hirer requests, and will come at agreed times. It also tends to be an open-ended agreement – that, for example, the carer will come on Mondays, Wednesdays and Fridays, and undertake agreed tasks during agreed timeframes. The carer has an obligation to come on those days at those times and to provide the services agreed on, and the hirer has an obligation to allow the carer to do so and to pay them for it.
As can be seen, the hallmarks of an employment relationship are all there, and the individual hirer may well have in fact become an employer, perhaps to several different carers across the working week.
Employers have a number of obligations to their employees and failure to comply with these can leave the hirer open to claims in Employment Tribunals, for anything from unlawful deduction of wages; failure to pay holiday and/or national minimum wage; unfair dismissal, all the way through to discrimination claims which can be very costly and complicated to deal with.
An employee would also be entitled to claim Statutory Leave – such as maternity – and the employer would be obliged to ensure all of those rights were complied with, including potentially paying statutory maternity pay, whilst of course also needing to obtain temporary cover during that leave.
There are obligations on the form and content of the contract or statement provided to employees, and the timing of that document being provided. Employers will also need to deduct tax and national insurance and comply with all their legal obligations to HMRC in this regard.
The legal obligations created in an employment relationship can be difficult for an individual, especially a vulnerable one, to deal with. Whilst we are often called in to help when a problem arises – such as the hirer ends the relationship and then receives an unexpected claim, or the carer informs the hirer that they are not complying with their statutory obligations and the hirer needs urgent advice on what to do – it is preferable to avoid issues arising in the first place.
There are two main options:
If you or someone you know is employing someone to provide services in their home, do get in touch for a free consultation to see what you might need to be aware of and how we can help.