Despite being longstanding industry practice, businesses in the equestrian sector may be exposing themselves to unnecessary risk when engaging casual staff. It is important for businesses to correctly characterise an individual’s employment status to ensure compliance with their respective legal obligations and responsibilities. Unwittingly engaging grooms and other individuals on the wrong contractual basis can lead to complex (and sometimes expensive) issues for equine employers.
Employment status
Employment status is a complex legal issue that is continually evolving and challenged through the courts and employment tribunals. Under UK employment law there are three categories of individuals providing their services in the workplace: employees, workers, and self-employed contractors.
Distinguishing between these categories is a fact-sensitive task based on legal tests established through case law. Employers must ensure that workers and employees, even those engaged on a casual basis, are able to benefit from their statutory rights. Only genuinely self-employed contractors are excluded from most statutory rights. It is therefore important to understand the proper status of any individuals engaged to perform work to avoid making any assumption that an individual is self-employed when the reality of their working arrangements indicates otherwise.
Depending on an individual’s employment status, certain rights are provided by law, the key ones being:
| Statutory Right | Employee | Worker | Self-employed |
|---|---|---|---|
| Written particulars of employment | Yes | Yes | No |
| Statutory sick pay (SSP) | Yes | No* | No |
| Paid annual leave | Yes | Yes | No |
| National minimum wage (NMW) | Yes | Yes | No |
| Rest breaks | Yes | Yes | No |
| Maximum 48 hour working week | Yes | Yes | No |
| Employer pension contribution under auto-enrolment scheme | Yes | Yes** | No |
| Protection from discrimination | Yes | Yes | Yes |
| Right not to be unfairly dismissed (after 2 years’ service) | Yes | No | No |
| Right to a statutory redundancy payment (after 2 years’ service) | Yes | No | No |
| Maternity/Paternity and other parental rights | Yes | No | No |
* “Qualifying employees” is defined more widely for SSP – if a worker is liable for class 1 NI contributions, they could qualify
** If “eligible job holder”
These rights can lead to expensive pitfalls for businesses where they are not properly provided. For example, one common practice in the equine industry is for staff to be ’paid in kind’, receiving a discounted wage in exchange for lessons, livery, or accommodation. Where any such arrangements are in place, businesses must still ensure that the discounted wage is paid in accordance with national minimum wage rules and that staff are permitted to take paid holiday under the Working Time Regulations 1998.
Contracts
A common misconception within the equine industry is that a written contract is optional or not relevant for casual or temporary staff. This is simply not the case. Both ‘workers’ and ‘employees’ are entitled to receive written particulars of the terms of their employment. This also avoids the risk of disputes arising over the applicable terms governing the relationship.
However, it is important to note that a contract does not have to be express, or written, to be effective or to determine the employment status of an individual engaged to perform work. A contract can be deemed to exist even when more casual ‘ad-hoc’ working arrangements are agreed. Even where written terms are in place, if these do not reflect the genuine intentions of the parties an employment tribunal will place more weight on how the work is being done in practice rather than the written terms when determining an individual’s employment status.
For an individual to be categorised as an employee or worker, there must be mutuality of obligation. This is a question of whether there is an obligation on the employer to provide work, and the reciprocal obligation for the individual to accept and perform the work offered. For a business, this does not have to be an obligation to provide specific work, (i.e. set hours), it can include variable and ‘zero-hours’ arrangements.
A contract involves each party exchanging promises or consideration, for example a business will generally provide payment in exchange for an individual’s services. It is important to note that consideration does not have to be monetary – any equine business offering training in exchange for a groom’s work (often called “working pupil arrangements”) would still be engaging those individuals under a contract.
Once it has been established that a contract is in place, an individual’s employment status is then assessed by looking at factors such as the requirement to provide personal service and the level of control exercised over how the individual performs the tasks. In the absence of these factors, the individual is more likely to be regarded as a self-employed contractor.
Conclusion
Whether an individual engaged to perform work is an employee, worker, or a genuinely self-employed contractor depends on the reality of the working relationship in practice. If your business engages individuals to provide services or work (whether paid or not and whether or not under any formal written contract) and you are unsure about their employment status or the legal obligations that attach to them, please contact a member of the Birketts Equine Sector Group for advice. Our Employment Team has specialist knowledge and experience in dealing with equestrian employment arrangements. We can assist in making a determination onemployment status, as well as draft appropriate contracts to govern the working relationship and ensure that you are fulfilling your legal obligations.
Key Contacts
The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at December 2023.