To whom do the Equality Act’s provisions on employees apply?

The Equality Act’s provisions on employees also apply as appropriate to persons working in other legal relationships that are equivalent to employment relationships.

This refers to types of work which are similar to employment and service relationships, where the work is carried out under the same circumstances as in employment and service relationships, but which are excluded from the scope of the Employment Contracts Act and other legislation relating to employment relationships. Such groups can be e.g. contractors and self-employed workers, freelancers, interns and carers. In these cases the work is usually carried out on a commission or contract basis.

The definition of employee does not cover all kinds of work that is carried out outside an employment relationship. For a legal relationship to be equivalent to an employment relationship the work has to be carried out in similar conditions as in employment and service relationships and the worker has to be personally committed to work carried out for another person, even if they do not have a contract of employment.

For contractors and self-employed workers the prerequisite is that they mainly sell their own skills. From the point of view of employment and social legislation (e.g. unemployment benefit and pension) these people can be entrepreneurs, but they cannot have a business with a risk to the entrepreneur or any employees. They work in the same way as the client's own employees, even if there is no right to direct the work. Working in the client's offices and with the client's equipment is not required. The legal form of the activities (e.g. tax deduction card, sole trader, company type) has no relevance for the definition of an employee; the determining factor is the actual nature of the activities.

This definition does not usually apply to relationships between two self-employed workers. The definition also does not cover leisure activities and other voluntary work which is unpaid, as well as all work without a gainful purpose, such as work based on family law. The general prohibition of discrimination in section 7 of the Equality Act and potential damages that have to be paid out as a consequence for violating this prohibition do also, however, include these groups of workers.

The Supreme Court has taken the view that chief executive officers of limited companies and cooperatives cannot have an employment relationship with the corporation for which they work based on a contract and in return for payment, as the CEOs of these corporations have to be regarded as the corporation's statutory body.

By contrast, in organisations where there are no regulations in law regarding the chief executive officer (e.g. a registered association), the Supreme Court has assessed the situation of chief executive officers according to the characteristics of an employment relationship, which means that the CEO of such an organisation can be in an employment relationship with the organisation when the characteristics of employment are met.

The wording of the definition of an employee in the Equality Act does not rule out applying the definition to the chief executive officer of a limited company or cooperation who is not in an employment relationship or any equivalent relationship with the organisation. The definition cannot however be applied on a chief executive officer who is the owner of a limited company and therefore also acts as an entrepreneur.

The working life regulations in the Equality Act are also applied "as applicable" to those in other legal relationships which are equivalent to employment relationships. Therefore the regulations in the Equality Act relating to e.g. supervision of work will not necessarily be applicable as they are to CEOs or self-employed workers who can organise their own work.

Regarding the CEO of a limited company it also needs to be noted in situations regarding e.g. recruitment and dismissals that limited companies have a fairly extended right to choose their CEO. However, the European Court of Justice has adopted the clear principle that actions taken towards women because of pregnancy constitute direct discrimination which give the woman the right to compensation. So if the contract of a CEO of a limited company is not concluded because of pregnancy or motherhood, or if a contract is cancelled because of pregnancy or motherhood, the company can be sentenced to compensate the injured party.

Hired labour refers to a situation where the recipient of the work (the user company) hires employees of another company (the agency) with an assignment agreement. For hired labour the rights and responsibilities relating to the contract of employment are divided so that the right to supervise the work are transferred to the user company. At the same time the employer's responsibilities which are directly related to carrying out and organising the work are also transferred onto the user company.  

As an employer, a user company may be liable for discrimination prohibited under the Equality Act and be liable for compensation in situations where the user company exercises its authority as an employer over an agency employee. Therefore the user company has the responsibility to also follow the Equality Act's regulations regarding employers when it comes to hired labour during the time the work is being carried out and supervised and in matters relating to working conditions. The user company is for example responsible for preventing harassment and for dividing tasks so that employees are not treated differently because of their gender.

The agency who has a contract of employment with the hired labour has to take care of all other employer responsibilities. The user company is not in charge of decision made by the agency as an employer. The agency will have sole employer responsibility for example in situations where an agency employee who is pregnant is dismissed because or her pregnancy.