Employment Status in the Life Sciences Sector: A New Dawn

A common consideration for life science organisations before engaging an individual (on any basis) ought to be whether control or flexibility is the most important factor in the working relationship.

This will likely depend on the nature of the work, the business context, and the individual in any given situation.   

If an organisation engages an individual as an employee, it may seek to include contractual provisions in employment contracts to protect legitimate business interests.

These include intellectual property (IP) clauses, robust confidentiality provisions, restrictive covenants, and prohibiting outside employment.

In relation to IP specifically, this often represents a key consideration for organisations in the life sciences sector, given the innovative techniques and products individuals create and manage in their work.

Employers should be aware that the default position for IP in an employment relationship is that IP generated in the course of work belongs to the employer, though no such position exists for self-employed individuals.

There may be situations in which both control and flexibility are key considerations, in which case, engaging individuals as workers may represent the best option for employers.

Where the need for control may be less important, such as when an individual is simply required for a defined function or limited period, a self-employed engagement may be preferable.

Whether under a consultancy agreement or otherwise, an organisation has no continuing obligation to provide work or pay the individual once the agreed work is complete, ensuring flexibility in the working relationship.

In such circumstances, it will still be worthwhile to seek to protect business interests, though the extent to which this is possible will be more limited than for employees.

In May 2024, Labour detailed its plans to "make work pay" by delivering a "new deal" for working people within the first 100 days of government.

The New Deal included a proposal to move to a single-worker status, with the only distinction being between workers and the self-employed.

As the cases of Uber and Deliveroo demonstrate, this is a very complex area of law, and any reform will require detailed and extensive consultation.

The government has acknowledged that such changes are unlikely to happen quickly and has only committed to consulting on this within the next year.

Myerson's future updates on such changes will be published in due course.