The Caswell Franklyn Column – Rules to Determine Self Employment
When I write these columns and highlight noncompliance with rules and regulations, I do so with one objective in mind. That is, to expose the wrongdoing, with the hope that those responsible would take corrective action.
In my last column, I wrote about the appalling terms and conditions under which Barbadian workers suffer, at the hands of expatriate employers. After its publication, I was swamped with calls from workers, who are being wrongly classified as self employed, in the local private sector and amazingly in the public service.
Employers classify their workers as self employed in an effort to save payroll costs but in so doing, they put their workers at a serious disadvantage. Subject to the maximum insurable earnings of $4,650 per month or $1,073 per week, regular employees pay 10.1% of their earnings as National Insurance contributions and employers pay an additional 11.25% on behalf of the workers. Self employed workers pay 16.1%.
When an employer illegitimately classifies a worker as self employed that employer saves 11.25% that should be paid into the National Insurance Scheme (NIS). That cost saving measure means that the employee pays 6% more contributions. The disadvantage to the worker does not stop there. Self employed workers do not get vacation pay, and in the event of an accident at work, they are not entitled to receive injury benefits from NIS.
It is therefore important for a worker to know if he/she is being exploited by being classified as self employed. Prior to the enactment of the Employment Rights Act (ERA), a worker had to rely on the common law to determine if a contract of employment existed. However, the First Schedule of that act has codified some of the factors used to determine the existence of a contract of employment. It states:
In determining whether a contract of employment exists,
consideration shall be given to whether
(a) there is an obligation on the part of the employee to give personal and exclusive service;
(b) the work is done according to the instructions of the employer, and the manner in which the work is being carried out is subject to the control and direction of the employer;
(c) the work has continuity, and such continuity creates for the employee an economic dependence upon the employer, without there being any financial risk to the employee;
(d) the work is carried out within fixed hours or at a workplace or workplaces specified or agreed by the employer;
(e) the work involves the integration of the employee in the organisation of the business, including his subjection to its policies;
(f) the employee is subject to the procedures of the business for addressing grievances and disciplinary matters;
(g) the employee is in receipt of periodic remuneration payable on a stipulated basis, for example, at hourly, weekly or monthly intervals, and all such payments are subject to statutory deductions;
(h) the employee is entitled to holidays with pay; and
(i) the employee makes no, or only nominal, investment in tools and equipment.
Please note that all of these factors do not have to exist in order to make the determination.
My biggest concern is that workers in this country are increasingly being treated slightly better than slaves, despite there being an impressive set of labour laws on the books. Mind you, one of the biggest, if not the biggest offender, is Government.
For example, this administration passed the ERA in 2012 which requires employers, including statutory boards, to give a written statement of employment particulars to employees, prior to or forthwith upon the commencement of their employment contract. To date, the Barbados Revenue Authority has so far failed to comply with this requirement.
Also, that same act requires employers to engage in consultation, with employees or their representatives, at least six weeks prior to making staff redundant. In 2014 the National Housing Corporation summoned some members of its staff to the boardroom and informed them that they were being made redundant immediately. So far, none of the 23 workers being represented by Unity Workers Union has received one red cent in severance pay.
It is time that workers say to this Government, thus far and no further!