EmploymentRecruitment industry

What are the different types of temporary roles in the UK?

Are gig workers different from temp agency workers?

Zero hour contracts, gig workers, temps, freelancers, interims, contractors, agency workers… enough to get our heads spinning.

What’s the difference? Why does it matter?

This article explains:

  • What are the 3 different employment statuses in the UK?
  • What are the employment rights of employees, workers and self-employed workers?
  • What is the difference between a gig worker, an agency worker, a temp worker, a freelancer, a part-timer and a worker with a zero hour contract?

What are the 3 different employment statuses in the UK?

Sorry, we have to be a bit technical to start with!

To understand the differences between gig workers, temp workers, zero hour contracts etc…, we need first to spend some time on employment statuses. Why? Because each status comes with its own employment rights.

There are 3 different employment statuses in the UK: employees, workers and self-employed.

The majority of people in the UK are employees (80% or 26 million people), followed by self-employed people (15% or 4.8 million people) and workers (5% or 1.6 million people) according to ONS data:

So what’s the difference?

Employees

Employees work under an ’employment contract’ or ‘offer letter’, which includes the words ’employer’ and ’employee’:

  • they’re required to work regularly, and do a minimum number of hours
  • they’re paid for the time worked
  • they work under the supervision of a manager, who manages their workload, and gives them instructions about how to do their job
  • they can’t send someone else to do their work
  • tools, materials and equipment is provided by the company they work for
  • they only work for that company, or if they have another job, it’s completely different to the one they do for the company
  • they’re paid through PAYE.

Workers

Workers have a ‘contract’ or an ‘arrangement’ to do work and services for a reward (money or benefit in kind):

  • they have to turn up for work even if they don’t want to
  • they have a limited right to sub-contract, i.e., send someone else to do the work
  • their employer has to have work for them to do as long as the contract or arrangement lasts
  • they’re not working as part of their own limited company, where the employer is a customer or client
  • they’re paid through PAYE.

Self-employed people and contractors

Self-employed workers run their business for themselves, and take responsibility for its success or failure:

  • they can decide what work they do and when, where and how to do it
  • they can hire someone else to do the work (sub-contract the work)
  • their employer agrees a fixed price for their work – not taking into account the hours
  • worked to do the work
  • they provide their own tools and equipment
  • they can work for more than one client
  • they’re not paid through PAYE.

What are the different employment rights in the UK?

Employment rights depend on employment statuses.

Workers

Workers are entitled to:

  • The National Minimum Wage
  • Not to work more than 48 hours on average per week (Working Time Directive)
  • Protection against unlawful discrimination and unlawful deduction from wages
  • The statutory minimum level of paid holidays and rest breaks
  • Not be treated less favourably if they work part time
  • They may be entitled to Statutory Sick, Maternity, Paternity, Adoption and Shared Parental Pay

Agency workers

Agency Workers, a sub-set of Workers (more details below) are entitled to worker’s employment rights, plus additional protection under the Agency Workers Regulations (AWR):

  • From their first day at work, agency workers are entitled to use any shared facilities and services provided bu the employer to permanent members of staff, for example a canteen or a workplace creche.
  • After 12 weeks, agency workers are entitled to ‘equal treatment’:
    • the same level of pay as permanent employees doing the same or a similar 
    • paid annual leave
    • and automatic pension enrolment.

Employees

Employees have the greatest levels of employment rights. They’re entitled, after a minimum length of employment, to

  • All the rights of ‘Workers’
  • Statutory Sick, Maternity, Paternity, Adoption and Redundancy Pay as well as Shared
  • Parental Leave and Pay
  • Right to request flexible working 
  • Time off for emergencies
  • Protection against unfair dismissal
  • Minimum notice period if they’re dismissed

Self-employed

Self-employed people and contractors have the least employment rights. As mentioned in the government’s website, ’employment law doesn’t cover self-employed people in most cases’! Their only protection is around

  • Health and Safety and in some cases, protection against discrimination
  • All of their other rights (if any!) are set out by the terms of contract they have with their client

To simplify, we’ve summarised the employment rights by employment status here:

What are the different types of contracts?

After having discussed employment status and employment rights, let’s focus on contracts… This is where the borders are a bit more blurred…

  • People working on full-time or part-time employment contracts benefit from employees’ employment rights.
  • Employees on fixed-term employment contracts benefit from employee’s employment rights. They are entitled to receive the same treatment and benefits as full-time permanent staff. Fixed term contracts are:
    • Set in advance
    • End when a task is completed or event takes place
    • After 2 years of service, employees on fixed-term contracts have the same redundancy rights as permanent employees.
  • People placed by recruitment agencies in temporary positions (‘agency workers‘) are entitled to agency workers’ employment rights.
  • People on zero-hour contracts, also called ‘casual contracts’ are entitled to workers’ employment rights
  • Freelancers, contractors or consultants are self-employed and have very limited employment rights.
  • Gig workers are… well, it depends some are considered ‘workers’ and others ‘self-employed’ – there’s currently a lot of discussions around their employment status and rights.

Once again, this is a simple infographic to explain the subtleties of employment statuses (and associated rights) by types of contract.

What is the difference between a gig worker, a part-timer, a temporary worker, a freelancer, a contractor, interim consultant, agency worker, worker on a zero hour contract?

What is a gig worker?

According to the Taylor Review‘s definition, a gig worker is ‘someone who uses an app to sell their labour‘.

When you think about gig workers, you typically think about Uber or Deliveroo drivers. Gig workers also include people who sell things on online platforms via Etsy for example, perform short-term jobs (for example, they assemble Ikea furniture using TaskRabbit) or they might rent their apartment or room (e.g., AirBnB).

58% of gig workers are permanent employees working on ‘gigs’ to complement their work.

There are around 1.3 million gig workers in the UK.

Their employment status and associated rights are currently debated in the UK courts: are they workers, are they self-employed?

What is a part-timer?

A part-timer or part-time member of staff is someone who doesn’t work full time.

Generally speaking, people are considered as working full time when they work 35 hours per week or more, even though there’s no set definition.

Employees, workers and self-employed people can all work full-time or part time.

According to ONS data, the proportion of part-timers is:

  • 24% amongst permanent employees
  • 47% amongst temporary workers (agency workers, people on zero hour contracts) and on fixed-term contracts
  • 31% amongst self-employed people.

What is a temporary worker?

In the ONS definition, temporary workers include:

  • agency workers
  • workers on zero-hour contracts (also called casual workers)
  • people on fixed-term contracts

There are 1.6 million temporary workers in the UK.

What is an agency worker?

An agency worker is a temporary worker who has a contract with a recruitment agency, but work temporarily for a hirer, according to the government‘s definition. These agencies are often called ‘temping agencies’.

Agency workers are generally paid on an hourly rate basis.

They are often called ‘temps’ or ‘temporary workers’, which can be a bit misleading!

Be mindful about the subtlety in the definition – you’re not employing an agency worker if:

  • the person is self-employed, even if they’re placed by a temping agency
  • the person is placed on a permanent position by a recruitment agency
  • the person is an employee of a temporary agency, having opted for a ‘pay between assignment contract’ (i.e., applying the Swedish derogation in line with the Agency Workers Regulations (AWR)).

There are between 800,000 and 1.3 million agency workers in the UK, which is the second largest temporary recruitment agency market in the world.

What are zero-hour contracts?

‘Zero hour contract’ are synonymous of very highly flexible contracts:

  • Employers don’t guarantee any work and have no obligation to offer work
  • Workers are not obliged to accept the work offered to them by the employer.

As a ‘worker’, they benefit from a number of employment rights and protection, including the National Minimum Wage and the statutory paid holidays.

Approximately 905,000 workers are on zero-hour contracts.

Can agency workers be on zero-hour contracts?

Yes – the lines between agency work and zero-hour contracts are very blurred. In August 2018, in the Matei v Brooknight Guarding Limited, a security guard on a zero-hour contract argued successfully that he was an agency worker.

Time will tell how the legislation catches up with the variety of employment situations in the UK!

What are fixed-term contracts?

Fixed term contracts are:

  • Set in advance
  • End when a task is completed or an event takes place
  • After 2 years of service, employees on fixed-term contracts have the same redundancy rights as permanent employees.

What is an interim?

An interim is generally self-employed and recruited for very senior C-level positions, and relatively long assignments (e.g., 6 months). Their role can often convert into permanent positions.

They generally have setup their own limited company or are sole traders.

They’re typically paid on a daily rate basis.

The difference between contractors and interims is their seniority level: interims operate at executive level, while contractors are professionals at a slightly more junior level.

Interims may find work via temporary recruitment agencies, often called ‘executive search firms’. However, as they’re self-employed, they’re not considered as ‘agency workers’ and don’t benefit from employment protection.

What is a contractor?

Contractors are self-employed senior professionals, with specialised skills in a certain niche. They’re often recruited for IT roles or in construction. They’re typically paid on a daily rate basis.

Some contractors have setup their own limited company, others are sole traders.

Contrary to a freelancer, a contractor typically work for one client at a time, often on the client’s premises, on one specific project.

To complicate things, contractors may find work via temporary recruitment agencies. However, as they’re self-employed, they would not be considered as agency workers, and would not benefit from employment protection.

What is a consultant?

A consultant is self-employed, and can work for one or different client at a time, often at the different clients’ premises.

Consultants are senior professionals with a specific expertise, and paid on a daily rate basis.

Some consultants have setup their own limited company, others are sole traders.

The difference between consultants and contractor is that:

  • Consultants and contractors are both self-employed, and senior professionals with specific skills and expertise in a certain sector or niche.
  • Consultants are ‘advisors’ – they provide expert advice, often starting with an audit or assessment followed by recommendations. They’re not involved in the implementation. They’re generally involved at a senior executive level, and therefore request higher fees than contractors.
  • Contractors are ‘doers’ – they can provide advice, but their main role is to implement the recommendations and deliver.

What is a freelancer?

A freelancer is self-employed. A freelancer often works from home, on multiple projects for different clients at the same time, often paid per hour or per day.

Freelancers are often found in the creative, marketing and media industry. Freelancers can be gig workers if they use online platform such as Upwork to find work.

Some freelancers have their own limited company, others are sole traders.

They don’t find work via recruitment agencies, but can use online platform to advertise their services and find work (e.g., freelancer.com).

How to find agency workers in the UK?

There are more than 11,000 temp recruitment agencies in the UK, the second largest temporary agency recruitment market in the world.

In a nutshell, you have quite a lot of options to find agency workers! However, because it’s a very fragmented market, it can be hard and time consuming to find temps.

TempaGoGo is here to help – we connect you with rated recruitment agencies, specialised in your needs, to help you find temporary staff fast.

Agencies with available candidates will typically come back to you in less than 5 minutes. Time to save time and money!

So, why not try TempaGoGo to find the temp you need?

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