COMPLIANCE
self-employed for tax purposes, the question was raised as to whether their relationship with Uber qualified them for statutory employment rights. Uber claimed the drivers weren’t working for them, and they were merely providing technology to connect them to customers. The court ruled that drivers were indeed workers for Uber, based on the dependency and subordination in the relationship. For example: ● Uber dictated the terms of the contract and drivers had no say in them ● Uber set the fare, so could dictate how much drivers earned ● requests for rides were constrained and drivers could be penalised for rejecting too many rides ● Uber had the capacity to place temporary bans on the relationship if drivers had bad ratings or complaints made against them ● the drivers had no right to substitution, and they had to personally complete the jobs they accepted. Despite Uber’s initial appeals, the case resulted in confirmation of the drivers’ entitlement to holiday pay and other worker rights. The case of Addison Lee v Lange was
isn’t a legal practice, as holiday pay should be paid when annual leave is taken, over the course of the year ● the reference period for holiday pay calculations – as previously discussed, payroll teams should ensure that, from 6 April 2020, they use a 52-week pay reference period for holiday pay calculations. Some organisations appear to continue to use the previous 12- week reference period calculation, but this means they aren’t complying with holiday pay legislation.
almost identical. It was ruled that drivers for the car and courier company, Addison Lee, were also workers for the purposes of the Employment Rights Act 1996. The company’s request to appeal the verdict from the employment appeal tribunal was
rejected by the Court of Appeal. Deliveroo is another well-known
organisation, which faced a similar legal battle. Deliveroo provides a delivery service in which it connects drivers to takeaways and customers. This time, multiple rulings upheld that its riders couldn’t be classed as workers. A key difference between this case and those mentioned above centres on the right to substitution – sending another person to carry out jobs on their behalf. A note of caution… The CIPP’s policy and Advisory Service teams, unsurprisingly, receive many questions regarding holiday entitlement and pay. Two issues seem to frequently crop up, which relate to: ● ‘rolled up’ holiday pay – this involves the practice of paying employees an increased hourly rate of pay, to account for any holiday pay. Legislation in this area clearly states this
What the future holds Organisations should ensure they’re
compliant and paying staff correctly, and holiday pay is no exception to this rule. With the introduction of the single enforcement body, which will, among other things, focus on the enforcement of holiday pay, payroll professionals should check that calculations regarding both entitlement and payment for holidays within their businesses are correct. Could the department for Business, Energy and Industrial Strategy introduce a ’name and shame’ list for holiday pay, much like it currently does for organisations that fail to pay staff the national minimum wage? Only time will tell… n
MAKE SURE YOU’RE UP TO DATE WITH THE LATEST CHANGES
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This focused update course represents the single best opportunity to be briefed and updated on changes affecting payroll.
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| Professional in Payroll, Pensions and Reward |
Issue 80 | May 2022
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