Employment law, as the name suggests, is that body of law that regulates the relationship between employers and employers. It is part of labour law which includes the laws governing trade unions. Employment law in the UK comes from many sources. The basic legislation is however the Employment Act 1996.
The Employment Rights Act 1996 defines an employee to be a person who as entered into or works into a contract of employment. This statutory definition is however not very helpful. In response, the courts have come up with various rules through which the question can be resolved. The first question to be determined when such issues arise is to do with the person who exercises control in the relationship between the two parties. The test has since become known as the control test. The test seeks to answer a number of questions relating to the issue control. Thus, questions such as who, what, where, when and how are answered. With regards to the who? test, a contract of employment is normally assumed to be personal in nature. It follows therefore that this personal nature of the contract must be maintained for a contract of employment to exist. A relationship that gives the worker the power to delegate his work or send replacements will therefore remove the personal nature. A person will not fall into the classification of an employee merely because he or she has to obey a number of company rules. Thus, a lorry driver was held to be an independent contractor for the reason that he could arrange for a substitute driver to do his job with the consent of the company. In the present case, James has the freedom to arrange for another instructor from the club to cover for him when he is away. The conclusion if the analysis was to end at this point would be that James is not an employee.
Although quite useful at the time when it was first formulated, the control test has a number of shortcomings. Notable among them is the fact that it does not take account of modern situations. Workers today are much more skilled at their areas of specialization that the employer would normally not have much control of what they do. Thus, it is the practice that a worker will enter into a contract of employment and yet still exercise some level of independence as regards how they perform their work. James in the present example exercises much discretion due to the nature of work that he has to do. The courts have therefore had to use other tests such as the organizational test in order to determine the existence of an employment relationship. Lord Denning stated to the effect that one becomes an employee if they are an integral part of the respective organisation.