Written evidence from the British Universities Finance Directors Group (WOW0062)

The British Universities Finance Directors Group (BUFDG) is the representative body for higher education finance staff in the United Kingdom. Our members are the Directors of Finance and Chief Financial Officers of almost all UK higher education institutions.

If you have any queries regarding this response, please contact Amanda Darley, BUFDG’s Tax Specialist: amanda@bufdg.ac.uk or 07711 289039.

Summary

• Significant complexity exists around the status of ‘workers’ and casual engagements, largely driven by employment law cases
• Certain government legislation already defines when someone becomes a work for specific purposes, such as Auto Enrolment for pensions, and any similarities or differences between definitions of workers/employees etc between different areas of legislation should be made very clear in guidance

• In some business sectors there appears to be a need for more clarity over the terms/hours/length/value of casual and agency contracts as a lack of certainty appears to be one of the main problems for these workers (eg as highlighted in the report regarding ASOS). These issues have been addressed within the Higher Education sector by work undertaken by the New Joint Negotiating Committee for Higher Education Staff (‘New JNCHES’), the central committee for multi-employer negotiations and dialogue on pay and pay-related issues in HE. A working party from the University & Colleges Employers Association, the Educational Institute of Scotland (EIS), GMB, University & College Union (UCU), Unison and Unite reviewed these issues in 2015. The resulting report, New JNCHES Hourly Paid and Casual Staff Working Group Report, can be found here[1].
• There is a financial benefit to being self-employed rather than employed, and those who choose this option should be encouraged to invest some of their financial saving from it in pensions, sickness and holiday protection/benefits.

1. Is the term 'worker' defined sufficiently clearly in law at present? If not, how should it be defined?

It is difficult for a lay person to understand the subtle differences between different classes of worker, limb A, limb B, casual engagement. These differences have resulted from a number of employment tribunal cases which have now muddied the waters. The government needs to provide helpful guidance which can be applied within the workplace and key distinctions made between worker and casual employee (zero hours contracts).

Whatever changes (if any) are made, it is vital that they should not complicate the picture even further. In addition, it is important to recognise that some definitions of Employee, Worker etc. are already defined in government legislation for some specific purposes e.g. the rights to Pension provision are already set out in the Auto Enrolment legislation and this clearly defines when someone, by virtue of their earnings levels and being on an organisation’s payroll, will get access to a pension. Any changes should take into account other legislation and be clear about similarities and differences.

The complexities that currently exist can be demonstrated in the case Westwood v The Hospital Medical Group, 2012, specifically around what can trigger an individual to be treated as a worker. The link below provides some useful commentary on the case and the difficulties the decision produced:

http://www.hendersonchambers.co.uk/wp-content/uploads/pdf/westwood-alerter-26-7-12.pdf

• What should be the status and rights of agency workers, casual workers, and the self-employed (including those working in the 'gig economy'), for the purposes of tax, benefits and employment law?

Agency workers and casual workers already receive a number of rights including holiday pay and pension rights. Depending on the length of service they currently are not required to receive protection against, unfair dismissal, flexible working and time off in emergencies. Consideration should be given to providing these benefits in some form.

2. For those casual and agency workers working in the 'gig economy', is the balance of benefits between worker and employer appropriate?

As question 1 above.

3. What specific provision should there be for the protection and support of agency workers and those who are not employees? Who should be responsible for such provision – the Government, the beneficiary of the work, a mutual, the individual themselves?

In some business sectors there appears to be a need for more clarity over the terms/hours/length/value of casual and agency contracts as a lack of certainty appears to be one of the main problems for these workers (eg as highlighted in the report regarding ASOS). These issues have been addressed within the Higher Education sector by work undertaken by the New Joint Negotiating Committee for Higher Education Staff (‘New JNCHES’), the central committee for multi-employer negotiations and dialogue on pay and pay-related issues in HE. A working party from the University & Colleges Employers Association, the Educational Institute of Scotland (EIS), GMB, University & College Union (UCU), Unison and Unite reviewed these issues in 2015. The resulting report, New JNCHES Hourly Paid and Casual Staff Working Group Report, can be found here[2].

4. What differences should there be between levels of Government support for the self-employed and for employees, for example over statutory sick pay, holiday pay, employee pensions, maternity pay?

The benefits of being self-employed around claiming additional deductions not available to an employee should provide financial compensation which the self-employed can invest in their own cover for sickness, holiday and pensions. However, there is no requirement to do so. At a minimum, improved guidance should be provided to the self-employed to encourage them to invest in these protections, which should be paid for by the government.

5. Is there evidence that businesses are treating agency workers unfairly, compared with employees?

We have no evidence to support this.

6. Should there be steps taken to constrain the use by businesses of agency workers?

Agency workers are a valid means of engaging individuals within the Higher Education sector and should continue. However, we are aware of the media reports of unfair use of agency workers in other sectors. There is a need for businesses to have flexibility within their workforces, but this should be balanced with the protection of workers’ rights. In some sectors it appears that what is needed is more clarity over the terms/hours/length/value of the engagement – the New JNCHES Hourly Paid and Casual Staff Working Group Report could be useful in considering reviews in other sectors.

7. What are the issues surrounding terms and conditions of employees, including the use of zero-hour contracts, definitions of flexible contracts, the role of the Low Pay Commission, and minimum wage enforcement?

No comment.

8. What is the role of trade unions in representing the self-employed and those not working in traditional employee roles?

No comment.

December 2017