EMPLOYMENT RELATIONSHIP GUIDELINES FOR EMPLOYEES, WORKERS AND
SELF-EMPLOYED SERVICES
HUMAN RESOURCES &
FINANCE
Contents
3 Contents
4 Introduction
Definitions of Employment Status
5
ployment Sta s Summary
6
ents & Associated Payment Forms
d Advice
7
8
ent of Self-Employed
Services, Workers and Employees
9-13
s of typical roles carried out at the University and
the employment group they are likely to fall into.
y Staff’
18
ess than 1 week)
20
tement of the Terms
less than 3 months)
21-22
Form – Worker Agreement – Application form and Terms of
23-24
e Provision of Services - TEACHING,
EXAMINING, ACTORS/MUSICIANS and Patient and Public
25-26
Consultancy
27
ING, EXAMINING,
ic Participation in
NICAL TRIALS
28
Fee Form 2 - Payment of Fees for Work Pre-determined by HMRC
Employment Status Indicator (ESI) website as SELF-EMPLOYED to be
Paid with no Tax and no NI
Em
Employment Groups
tu
Contractual Arrangem
Sources of Help an
Process for Engagement of Individuals and Organisations for Services
Decision Tree for the Engagement and Paym
Appendix
B:
Example
Summary of the Terms of Engagement for ‘Workers’ and Terms and
14-16
Conditions of Employment for ‘Short Term Temporar
17-
SS1 Form – Payment for Casual Workers (L
19-
SS2 Form – Application Form and the Principal Sta
of Employment for Short Term Temporary Staff (
SS4
Engagement
SE1 Form – Agreement for th
Participation in RESEARCH/CLINICAL TRIALS
SE2 Form – Agreement for the Provision of Services
-Fee Form 1 – Payment of -Fees for TEACH
ACTORS/MUSICIANS and Patient and Publ
RESEARCH/CLI
Introduction
Determining an individual’s relationship with the University is complex and is determined by
employment law. It is not a matter of choice by the individual, Faculty, School, Service or the
University to decide the employment status of an individual, though the intentions of those involved
and the terms of contracts drawn up at the outset of a working relationship will be relevant.
r of legal tests, which will
e individual;
and how the work is
done; and
University or the individual, i.e.
An i
ment status groups
dete
mployment group they fall into will also determine their
ction of income tax and
tus groups are:
yed
us for tax purposes is
s purposes. The
mined as “employee”
ent rights purposes.
s
ct of employment,
The decision on which employment group an individual falls into will depend on the relationship
between the individual and the University and is determined by a numbe
include:
●Whether there is a contract at all between the University and th
●Whether the individual is required to provide services personally;
●The degree of control over the service provided – who decides when
●Whether there is a mutuality of obligation on behalf of the
whether work has to be offered and carried out.
ndividual providing work activities will fall within one of the three employ
rmined by law. Depending on which e
employment rights and responsibilities in the workplace, and how the dedu
National Insurance contributions are calculated. The three employment sta
1.
Employee
2.
Worker
lo
3. Self-emp
The fact that an individual may be deemed to have a particular employment stat
NOT necessarily determinative of their employment status for employment right
HMRC ESI tool determines status for tax purposes only e.g. someone deter
could be a “worker” or even, in some cases, self-employed for employm
Employment Status Definition
Employee
An employee is an individual who works for an employer under a contra
which is known as ‘a contract of service’. Under a contract of emp
‘mutuality of obligations’ between the employer and the employee i.e. th
to offer and pay the employee for the work, and the employee is oblig
undertake the work personally. Employees are entit
loyment, there must be
e employer is obliged
ed to turn up and
led to all statutory employment rights and
ed by a whole range of legal provisions, including payment of wages, dismissal,
ovides the employer with his or her services, but remains
for
are protect
redundancy etc.
Self-employed
A self-employed individual pr
independent. The contract between the individual and the employer is ‘a contract
services’.
ry out the work in
mployed workers are not
ent rights.
For income tax and national insurance purposes, the employment relationship is ultimately
determined with specific reference to HMRC regulations. The fact that a person is registered
as self-employed does not necessarily mean that the work to be provided on behalf of the
University is of a self-employed nature.
Typically there may be an ability to provide alternative individuals to car
question. Services may also be provided through a company. Self-e
entitled to statutory employm
To help determine whether an individual is self-employed, the HMRC Employment Status
Indicator (ESI) tool must be completed by the engager before any engagement is entered into
with the individual. The ESI can be found at http://www.hmrc.gov.uk/calcs/esi.htm. The ESI
will advise if the individual is either an employee or self-employed for income tax and national
insurance purposes and the individual must be engaged/employed within the appropriate
employment group.
engager should
self-employed. A worker is
for
Occasionally, the ESI tool will indicate ‘undetermined’ in which case the
contact Payroll in order to better understand the working relationship.
Workers
Workers are a hybrid category that falls between an employee and
an individual who works not under a contract of employment but under ‘a contract
services’.
Workers are however obliged to provide their service personally. There is no obligation for
rights, such as
e minimum wage.
Sum
Worker
workers to accept and undertake work offered. Similarly, there is no obligation by the
employer to offer work. Workers are entitled to some limited employment
protection under the Working Time Regulations (including holiday) and th
mary of Employment Relationship Determining Factors
Employee Self-Employed
Employer obliged to offer and pay Can decide how, when and the w
Employer has no obligation to offer
the employee for the work where to do ork any work
Employee is obliged to turn u
l red but once accepted
vide their services nally
p and Can hire someone else to do the
undertake the work persona ly work at their own expense work offe must pro perso
Worker does not have to accept
It is, using old fash
terminology, a “master and relationsh
ioned
servant” ir own account
They risk their ow business on the ip.
n money/are in
They work under the contro supervis l ion of a manager or supervisor nd ve to actory work in
work they are under the supervision of a manager or supervisor
and/or Agree to do the w inclusive fee a correct unsatisf
ork for an all usually ha
Whilst at
their own time and at their own expense
They are more likely to be paid a salary but may be paid on an hourly
Provide the main items of equipment they need to do the
They are usually paid on an hourly rate or piece rate basis
or piece rate basis work
es. Some may be deemed to
r example, especially if they are unpaid/expenses only.
R Manager.
ent for anyone providing
mework for all its
workers but also to ensure that, as a responsible employer, it complies with its legal obligations.
Appendix B summarises examples of typical roles carried out at the University and the employment
group that they are likely to fall into. These employment groups and descriptions are defined by
employment legislation and have also been drawn up with specific reference to HMRC regulations.
NOTE: some individuals may not fall clearly into any of these categori
be “volunteers” or “voluntary workers” fo
Further information and advice should be obtained from the Faculty/Service H
Employment Groups at the University of Leeds
The University needs to ensure that it applies appropriate rules of engagem
work activities on its behalf. This is not only to provide a fair and equitable fra
6
Therefore, engagers must abide by these procedures before any engagement is entered into with an
individual and are responsible for ensuring that consideration is given to the employment status at an
early stage of the engagement process (rather than when the work has been completed).
Faculties/Schools/Services must follow the process shown on page 7 when engaging individuals and
should seek advice from the Faculty HR Manager/Officer at the earliest opportunity.
s
nt Forms
Summary Table of Contractual Arrangements & Associated Payment Form
Contractual Form Nature of Engagement Payme SS1
Payment for Casual Workers To pay individuals where the duration of engagement is one week or less
SS1
SS2
Application form and the Princip Statement of the Term
al
Where an individual is support for a perio s &
Conditions of Employment for ort Term Temporary St f
n d for regular d of up to 3 months Timesheet/Salaried Sh af eede SS4
Worker Agreement Where there is a need for on-going flexible/ad hoc support and there is no
tion o de to Timesheet mutuality of obliga offer/accept work n either si SE1
reement for the Provisio t
Where there is a need for an individual to c re self-employed Fees Form 1 Ag n of Services Teaching, Examining, Ac Musicians ors and
provide specialist servi University and a es to the SE2 isio ncy f ual to t services to the ployed Fees Form 2 Agreement for the Prov
e.g.
n of Where there is a need provide specialis
University and are self-em Services
Consulta
or an individ
TA-EMP 08
Application form and Statement of the Te Emplo
the P rms of yment for Hourly Paid
ff (other than
d to engage specialist individuals on an hourly paid basis to provide teaching
Salaried rincipal Where there is a nee
Teaching Sta students)
Sources of Help
Can help to determine employment relationships within Faculties & Services; provide advice and
engaging individuals on a self-employed, worker or employee basis. HR
practice and train
Payroll Office
Payroll can provide advice and guidance relating to Income Tax and National Insurance, payment
forms, appropriate use of Fees Forms for self-employment and will act as liaison with the HMRC
Employment Status team on behalf of the University.
Faculty & Service HR Managers & Officers
guidance on
Managers/Officers will co-ordinate contractual arrangements, advise on best
engagers in the use of the HMRC ESI tool.
Appendix B: Examples of typical roles carried out at the University and the employment group they are likely to fall into.
Employees
tes Deduction of Tax & NI
Employment Group
Example Roles
Characteristics Contract Type Payment Method
Responsibility for SAP etc
No
Open ended Lecturers, inist etc
Standard University employment. This be the most frequentl
University employment
Full e is al
Monthly HR Tax - Yes NI - Yes adm rators should y used form of employm
contract nt sued payroll by centr HR Open ende fixed funding c
s had more than en cont four pp d term employment is d tral HR Monthly payroll HR University has an obligation to consult the individual through ESRG on the expiry of funding Tax - Yes NI - Yes d- Resear h staff These appointments are used
individual ha
where the one successive fixed-term cont University and has be employed for a period of more, yet the funding su appointment remains fixe
ract at the inuously years or orting their Full contract by cen sue with and
Fixed- term w used to It fix
nd have four ill be offered s it can be rdance with the
se of Fixed-/Default.aspx? Researc maternit cover et h staff, y leave c
May only be justified in law achieve a legitimate busines should be noted that staff wh more than one successive contract at the University a years continuous service w open ended contracts, unles objectively justified in acco University’s Policy on the u Term Contracts available at
www.hr.leeds.ac.uk/policies
hen s objective.
o have had ed-term
PGld=4 for the post to remain fixed term
me ct issued by central HR Monthl payroll ersity has an ation to consult with the individual and through ESRG on the expiry of appointment Tax - Yes NI - Yes Full employ contra nt y HR Univ ig obl
8
Employment Group
Example Roles
Characteristics Contract Type Payment Method
Responsibility for SAP etc
Notes Deduction of Tax & NI Short term temporary Clerical assistance echnica tan earc tance
Engaged where it is necessary to fill a short term vacancy, or to cover peak
ad periods, and due to
atter ed Form SS2 completed by / ce Can be paid by he or sala throug monthl payroll HR Arrangements apply to all staff
imum duration ese ntments is 3 months University is not obliged to consult with individuals on the expiry of the fixed term contract
Tax - Yes NI - Yes staff1 T l ce h
the role a regular work p assis
Res assis etc
worklo the nature of n is requir Faculties ls/Servi Schoo s either times et ried h the y groups Max h of t appoi Lecturers ants Hourly paid ing
Normally employed to teach specialist each Form TA 8 s/ Paid in monthl equal instalm during teachin periods re appropriate ointed to annual acts, although they normally only work during teaching periods. Tax - Yes NI - Yes Teaching Assist
teach staff modules or to cover the t academic staff ing of EMP0 comple Facultie Schools/ Services ted by y ent the g HR Whe app tr con Instructors rs y p a ent e d rk c S2 ted by es/ Can be paid by either timesh or sala throug Univer payroll mum duration ese appointments is 3 months University is not obliged to consult with individuals on the expiry of the fixed term contract
Tax - Yes NI - Yes Tuto Hourl e.g. co or m aid ches ors
Where the individual is not s and they are obliged to wo required, there is a mutual
lf employe when obligation et Form S comple Faculti Schools/ Services eet HR ried h the sity Maxi h of t
1
Before engaging individuals through these arrangements, Faculties, Schools and Services may wish to consider using the services of Joblink, administered through Leeds University Union. Further information is available at www.leedsuniversityunion.org.uk/jobs
9
Self Employed
Example Roles HMRC regulations Contract Type Payment Method Responsibility for SAP etc
Notes* Deduction of tax and NIC
Individual normally engaged on an independent consultancy basis through
ultant will be based on an ‘all inclusive rate’ to include fees and
leted to determine self employed status
SE2 - Consultancy Agreement
Invoices are submitted to the University for payment at agreed inter o i ma e letio of Fees Fo by Faculties/ chools/Services. to are P ng Payroll Purch Office Tax - No NI - No a company
The agreed fee payable to th cons
e
associated expenses An ESI must be comp
vals al is Payment t on comp ndividu d rm 2 n S Payments made via companies urchasi asing Consultants Contractors Actors and ns e SE1 -Agreement pr A
Form Fees 1 completed by s/Sch ervices
Payroll Paid by time =
Tax - No NI - Yes Musicia
Paid by performance or by tim
ESI not required for TE ovision of M Facultie ools/S Paid by performance Tax - No NI - No Examiners tors
Tax treatment varies depending on the
onths for miners are ees so may tive. SE1 -Agreement p TEAM
Fees Form 1 completed by s/Sc ervices Postgraduat e level Tax - No NI - No Modera
Question Setters Contracts over 12 m undergraduate level exa taxed at source as employ be unattrac
examination level and the co period.
ntract for
ESI not required
rovision of Facultie hools/S
Payroll Undergradu ate level – over a period of 12 months or less Tax – Yes NI - No Undergradu ate level – over a period of 12 months or more Tax - Yes NI - Yes
Public Lectur be completed rm 1 completed by s/Sc ervices
Payroll Tax – No NI - No es An ESI must to determine
self employed status
SE1 -Agreement Fees Fo for p TEA rovision of M Facultie hools/S Lecturers Instructors Tutors/ teac o determine
will depend on frequency and type of service provided
ESI must be completed
SE1Agreement for provision of TEAM
Fees Form 1 completed by Faculties/Schools/Services ll 3 days or less in 3 consecutive months Tax - No NI - No
hers Tax treatment
An ESI must be completed t
self employed status.
Payro More than 3 days in 3 consecutive months Tax - No NI - Yes
10
Workers
Example Roles Characteristics Contract Type Payment Method Responsibility for SAP etc
Notes Deduction of
Tax & NI
Open day Engaged to a piece of work Form SS1 plet Faculties/Schools/ Services Payment either by h t Unive ce yroll
Payroll HMRC regulations note that the duration of engagement m han one week (Monday – must be the nt ment in the ar a ent amount
th nal Insurance Threshold for payment in
Cash Office Tax - No NI - No assistants1 complete one off com ed by cas
Offi pa hrough the rsity’s Cash or monthly ust be less t Sunday); only employme current tax ye must be under Contribution cash or engage nd paym e Natio
H tions note that the duration m an one ent agement in the
r Monthly payroll Tax - Yes NI - Yes R HMRC regula of engagement week (Monday only employm current tax yea
ust be less th
–Sunday); must be the or eng v g1 sts1 etc Engaged on an Form SS4 mple ies/Schools/ es
Monthly payroll H These contracts should not be used for e both parties ect work.
ork pattern does develop ng the worker to another employment group.
not obliged to consult with the expiry of the work.
Tax - Yes NI - Yes Reception co er1 irregular or basis Filin Student Ho flexible co Facult Servic ted by R regular ongoing require/exp work wher Where such a w consider movi University is individuals on
1
Before engaging an individual through this arrangement, Schools and Services may wish to consider using the service of Joblink, administered though Leeds University Union. Further information is available at www.leedsuniversityunion.org.uk/jobs
11
Non Employment Groups
Example Roles Characteristics Contract Type Payment Method Notes
Agency Workers Agency workers are not employees of the University and are paid by the Agency
heir terms and condition ed
vacancies, although there is no limit on the t of agency nomically angement for eration ppointment ent group,
Agreement made between Faculty/School/Service and the Agency
Paid as a vendor via Purchasing
From October 2011 new regulations come into force which provide agency workers who have been
with the same hirer for a d of 12 weeks or more with the
mployment rights as y employees in terms of pay and holiday entitlements direct. T of
employment are also determin Agency
Normally engaged to cover short term by the
duration of the engagemen workers. However, it is not eco viable to maintain such an arr long periods. Therefore, consid should be given to making an a to another appropriate employm paid through the University
engaged perio same e Universit basic Volunteers/ k nly, inical Trials pants)
uired e.g t NMW may apply in some stances and payments in
expenses may move away from this status
voluntary wor ers
ses/costs o provided with accommodation or subsistence (Research, Lay, Cl Partici
Usually paid expen may be As req . letter Expenses via Fees Form 1
Note tha circum excess of
Appendix C
SUMMARY OF THE TERMS OF ENGAGEMENT FOR ‘WORKERS’ AND TERMS AND CONDITIONS OF EMPLOYMENT FOR ‘SHORT
MPORARY STAFF’ - These arrangements are applicable to all groups of staff
WORKERS EMPLOYEES
TERM TE
TERMS OF ENGAGEMENT
CASUAL WORKER SHORT TERM TEMPORARY STAFF
eed to complete a one off ta
where the duration of the assignment is
Contract for Services
Need for on-going flex support
Contract for Services
d for regular support for a period of up to 3 months
Contract of Services
N sk and
one week or less
ible/ad hoc Nee
Advertising ot necessary cies may be adverti rv
Vacancies may be advertised locally culties, Schools, Services Advertising n Vacan sed locally within
Faculties, Schools, Se ices within Fa Authorisation – Pre
requirement
Yes Yes Yes Duration One week or less No limit to the duration that these contracts More than one week, but less than 3
Any extension beyond 3 st be based on a standard fixed-term/open ended yment contract.
can be used months. months mu University emplo
Contracts ie SS2 – issued by Faculties,
, Services
Form SS1 – issued by Facult s, Schools, Form SS4 – issued by
Services
Faculties, Schools, Form
Services Schools
References not req ols
tainin rtliste
culties, Schools, Services responsible for obtaining employment references for shortlisted candidates. Employment references uired Yes - Faculties, Scho
responsible for ob references for sho
, Services will be g employment
d candidates.
Yes - Fa will be
Status No employment relationship No employment relationship Employment relationship Equal Pay ct to equal pay for work o
ation
ay for ct to equal pay for work of e legislation
Subje legisl
f equal value Subject to equal p legislation
work of equal value Subje equal valu
13
Holiday Pay No entitlement Entitled to 28 days (p WTR
he r erna
ta basis at the end ement.
the first year of the engagement, worker may only take as much holiday as has been accrued at the relevant time.
ity holiday pay calculated on the basis of 40.50 days
)
Payment for holiday to be made on the expiry of appointment, or on request at the time of taking holiday ro rata) statutory Entitled to Univers
holiday under the Worker can exercise t holiday by request in w
ir right to paid iting to the Head of
tively, holiday pay
(pro-rata
School/Service. Alt may be paid on a pro-ra of the engag
TERMS OF ENGAGEMENT
WORKERS EMPLOYEES
Immigration Checks
CASUAL WORKER SHORT TERM TEMPORARY STAFF
No Yes - Faculties, Scho
responsible for carrying out document checks to confirm that individual
K. th than 12 months, H
in
r individuals who do not t leave to remain in the UK.
Yes - Faculties, Schools, Services will be responsible for carrying out document checks to confirm that
als have the right to work in ols, Services will be
s have the right to work in the U
Where the duration of more e engagement is R will be g out annual individu the UK
responsible for carry document checks fo have permanen
Increments No No No
Interviews No level in line with the cruitment
Yes – at local level in line with the sity’s recruitment and selection Yes – at local
University’s re and selection policy Univer policy Job Descriptions required No Not required, but may be good practice Yes
National Minimum Wage To be paid National Minimum Wage To be paid National Minimum Wage To be paid National Minimum Wage Objective justification f
-te
or No the post being fixed rm
No Yes
Obligation by the indi to accept work
vidual N/A No Yes
Obligation by the Univ to offer work
ersity
N/A No Yes
Payment Method One off payment Zero hours only, paid by timesheet Timesheet/annual salary Pension Scheme Not eligible Not eligible Optional
Period of Notice N/A r ated at any time r the University by tice in writing.
ce – if the standard eemed unacceptable by the University, the agre be terminated without notice.
One month Arrangement can be te
by either the Individual o min giving one months no Standard of performan of performance is d
ement can
Probation N/A No Optional
Protection in the workp mination y Whistleblowing Equal Pay
National Minimum Wage
Discrimination & Safety Whistleblowing Equal Pay
National Minimum Wage
Full employment protection lace Discri
Health & Safet Health
15
TERMS OF ENGAGEMENT WORKERS EMPLOYEES Purpose of Appointment CASUALS WORKERSNeed for regular work pattern that is essential to the day to day running of the Faculty, School, Service
To carry out one off tasks To provide flexible and ad hoc support
Rates of Pay Must meet National Minimum Wage Paid at an appropriate r n appropriate rate on UOL scales
ate on UOL pay Paid at a pay scales
Redeployment N/A N/A N/A
Redundancy Pay N/A No entitlement No entitlement Requirement
throug
to consul h ESRG on the ing
N/A No requirement - not e No requirement as the employment is 3 months or less. If the contract is
eyond 3 months there will uirement under our policy to
the expiry of appointment. t expiry of appointment/fund mployees extended b be a req consult on Requirement to individual ex ing
N/A No requirement – not e ment as employment is 3 less. If the contract is d beyond 3 months there will
irement under our policy to the expiry of appointment. consultation on the of appointment/fund piry mployees No require or months extende be a requ consult on
Sick Pay N/A Unive
or SS
ment to University sick pay, e eligible to SSP
depending on level of NI contributions paid No entitlement to
possibly eligible f
rsity sick pay No entitle P but may b
Statutory Payment SMP/SAP/S
s e. PP
N/A Statutory Payments if eligib Statutory Payments if eligible
