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Employment status - top tips for pharmacy employers

Laura Chalkley from NPA’s employment law advisory service team, Ellis Whittam, looks at the importance of employment status and what to watch out for with your locums.

Why does employment status matter?
Employees are entitled to an extensive array of rights, workers have certain rights but the self-employed have no signi cant protection in terms of employment law. If you declare employment status incorrectly, for example, you think someone is self-employed but they are actually a worker, this may land you with a whole host of obligations that you were not anticipating!

How do you determine someone’s employment status?
For all employers, it can be notoriously dif cult to work out whether someone is an employee or a worker. Ultimately, although both Employment Tribunals and the HMRC can make decisions about employment status, they can reach different conclusions. Therefore, a person may be classi ed as one thing for tax purposes and another for the purpose of key employment law rights. It is therefore important to consider both aspects.

Key factors when determining employment status include:

  • Level of control - How much say does the employer have over the individual? Do they dictate when and how work must be done?
    Mutuality of obligations – Is there a duty to offer work and for the individual to carry it out?
    Personal service – Can someone else step in if they can’t do the work?
  • Integration – Are they part of the organisation?
  • Financial risks – Is there a risk the individual may lose money if things go wrong?
  • Equipment – Does the employer provide them with equipment?
  • Remuneration – How are they remunerated? Do they receive a weekly or monthly wage?
  • Taxation – Is the locum responsible for their own income tax and NI Contributions on earnings or is it the employer’s responsibility.

This is not an exhaustive list and factors when considering employment status of a locum.

What is the employment status of locums?
The answer is not clear cut. The law and HMRC are not concerned about titles, therefore simply stating that the individual is self-employed, for example, is not enough. HMRC will analyse the terms of the contract and the nature of the working relationship in practice and how this has progressed over time.

Below are key considerations when declaring locum employment status for your pharmacy:

  • Examine the speci cs of the contract to see what it says - Ensure a contract for services is in place for those locums working in your pharmacy, which clearly establishes the rules between you and the locum. It must accurately re ect the actual working relationship between you and should cover, amongst other things, the total duration of the agreement (for example 24 months), how the contract can be terminated and the use of shared services.
  • Review how the relationship works in practice - Monitor and review your current working arrangements and practices with locums. Consider whether or not they have a regular pattern of work? Are you obliged to provide them with work? Can they refuse work? Are they paying their own national insurance and tax? Are they under your control and direction? Are they treated like other employees?
  • Consider whether the relationship has changed over time - An individual may work the odd few hours here and there to deal with the pharmacy’s needs, however, as time progresses, they may start doing regular hours each week, therefore the nature of the relationship has changed and this may affect their employment status.

This is a complex area of law therefore seek advice from the NPA Employment Law Advisory Service, Ellis Whittam on 0330 123 0558 or employmentadvice@npa.co.uk to discuss your specific workplace challenge.




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