Guidance and Procedures on Engaging Employees, Workers and Third-Party Suppliers

The procedures governing the appointment of individuals and different working arrangements, where the work is to be carried out in the UK.

Contents

• Introduction
• Engaging Employees on a Contract of Employment 
• Open-ended contracts
• Open-ended contracts with funding/project end dates
• Open-ended contracts (term-time or seasonal)
• Fixed-term contracts (see separate section Fixed term PGTA contracts)
• Fixed-term PGTA contracts
• Fixed-term apprenticeship contract
• Monitoring Employment Contract End Dates
• Engaging Workers
• As and When workers
• Unitemps 
• Agency Staff
• Payment for a one-off duty - visiting lecturers
• Payment for a one-off duty - other types of work
• Third-Party Suppliers
• Summary of differences between Worker (inside IR35) and Third-Party Supplier (outside of IR35)
• Common Scenarios

Introduction

1. UCL is committed to ensuring that individuals are engaged to work for us correctly and that the individual is on the most appropriate terms and conditions for their working arrangement.

2. Before engaging anyone to undertake any type of work it is important that the hiring manager understands how to engage the individual correctly and implements the most cost-efficient method of engagement before the individual undertakes the work. If, after reading this guidance, the hiring manager is still unsure of how to engage the individual, they may refer to the government guidance on Employment status and rights and undertake a Check employment status for tax (CEST). They may also seek advice from their HR Business Partner.

3. Before engaging an employee, worker or third party supplier on a second assignment with UCL, the hiring manager must discuss this with their HR Business Partner to ensure that the individual is being hired correctly and that there is no conflict of interest. 

4. This guidance is for engaging work that is to be carried out in the UK.  If the work is to be carried out abroad, advice must be sought from Richard Homer, Head of Global Mobility & Expatriate Tax providing the information on: whether they are currently working for UCL; the country they are usually domiciled in, the country they will be working in, how long they will be doing the work for UCL, and the amount of payment for the work they will be receiving.

Engaging Employees on a Contract of Employment

5. Most staff at UCL are recruited using the Recruitment and Selection Procedure and are placed on the most appropriate contract of employment.  A contract of employment provides regular working hours, and the employee usually receives the same salary each month.

6. UCL uses the following contracts of employment:

• Open-ended contracts
• Open-ended contracts with funding / project end dates
• Open-ended term-time or seasonal contracts
• Fixed-term contracts
• Fixed-term PGTA contracts
• Apprenticeship agreements 

Open-ended contracts

7. These contracts are the most frequently used form of UCL contract of employment and should be used where there is an expectation at the outset that employment will continue long term or indefinitely.

8. Teaching staff with recurring teaching commitments, year on year, will be issued with an open-ended contract, even if their expected teaching hours may vary from year to year.

Open-ended contracts with funding/project end dates

9. These contracts should be used for employees who are appointed with a known risk of potential redundancy because their salary is paid from a finite source, limited by an anticipated project or research end date. This is most commonly the case with staff employed on:

i.    research grants and contracts where either the project or research has an end date; 
ii.    projects (e.g., project managers for systems implementations or capital projects, etc) where there is a finite end date.
iii.   other fixed funding which will not be renewable. 

10. At least 4 months prior to the contract end date, the line manager will explore options for renewing or extending the contract. see Termination Procedure for Fixed Term Contracts and Redundancies. 

Open-ended contracts (term-time or seasonal)

11. Certain permanent employees are employed on open-ended term-time or seasonal contracts (e.g. UCL Lecturers (Teaching)).

12. Employees on these contracts who work for most of the academic year (i.e.,nine months or more) will be paid continuously over 12 months. Those working for less than 9 months in every 12-month period, may choose to be paid in the months that they work, or have the payments spread evenly over 12 months.

Fixed-term contracts (see separate section on Fixed term PGTA contracts)

13. Fixed-term contracts for up to 9 months are normally used for:

• providing cover while a vacant post is recruited to.
• piloting a new activity.
• to provide additional teaching capacity at short notice due to increased, unexpected student demand.
• for appointments that are a one-off project or task-related (e.g., a six-month appointment to complete a specific task such as clearing backlog).

Fixed-term contracts for over 9 months can be used for:

• Internships or work experience linked to a course of study
• Apprenticeships linked to a course of study
• PGTAs (see section below)
• providing cover for a substantive employee who is temporarily absent (e.g., sabbaticals, secondment, career break, sickness absence, parental leave).

14. Except for PGTAs (see separate section), the work to be undertaken under a fixed term contract is regular with the same number of hours worked each week. The employee will be paid the same salary each month. If the hours will not be regular, or will not be the same hours each week, an As and When contract will be more appropriate.

15. Cover for an absent academic employee will be provided by an Associate/ Lecturer (Teaching).  An academic appointment (with academic terms and conditions including Statute 18) should only be made in exceptional circumstances where the replacement is required to carry out all academic duties including research, in addition to teaching.  Approval for this must be sought from the Head of HR.

16.  A research project contract lasting longer than nine months must be appointed on an "Open-ended contract with funding/project end dates".

17. Teaching staff, who are not providing cover for a substantive member of staff, may be placed on a fixed term contract for the first academic year. This contract may be renewed once for a further academic year.  After this the contract should be converted to an open-ended contract.  The hours or FTE may vary from year to year, depending on timetable requirements, and the employee will be consulted on this.

18. When a new fixed term contract is requested or the end date is extended, the projected end-date reason must be accurate. The following table provides the option you may choose in MyHR Department Transactions and an explanation for when it should be used.

Fixed-term PGTA contracts

19. Post Graduate Teaching Assistants (PGTAs) who undertake regular work are hired on a fixed term PGTA contract.  Their employment is linked to their post graduate studies and will terminate after the completion of their studies. There are two types of PGTA contract:  either the guaranteed minimum hours per annum contract, or the average hours contract.  For more information see the PGTA code of practice.

Fixed-term apprenticeship contract

20. Apprenticeship Agreements are a type of employment contract that are given to apprentices employed on a recognised Apprenticeship Scheme at UCL.  Apprenticeship Agreements are issued in conjunction with a Commitment Statement that details information about the apprentice’s off-the-job training.

Monitoring Employment Contract End Dates

21. Departmental Staff with access to MyHR OBIEE Reports should run the “End of Contract Funding Reminder Report” at least monthly to identify contracts which are due to expire in three to four months’ time.  Departments must make a timely and appropriate decision about whether the fixed-term or open ended contract should be terminated or extended following the Termination Procedure for Fixed Term Contracts and Redundancies. 

Engaging Workers

22. Under certain circumstances, engaging an employee on a contract of employment, as detailed above, may not be appropriate for the work required and it may be more appropriate to hire in a worker or an agency worker.

23. Workers are not employees.  Workers are always paid via a payroll and tax and national insurance deductions are made. UCL has a variety of ways to engage a worker, as detailed below. 

As and When workers

24. Where the work will be casual and intermittent, and there will not be a set working pattern each week, the hiring manager may engage a worker either through UCL’s As and When terms of engagement or via Unitemps.

25. As and When terms of engagement (sometimes called casual contracts) allow UCL to engage individuals as and when they are needed.  UCL is not obliged to offer the individual work, and the individual does not have to accept the work offered.  There are no set, regular hours each week. This type of work may suit students or people with other commitments who are looking for occasional, casual work. Hiring managers must ensure that full-time students do not exceed 20 hours per week during term-time.

26. Workers are not expected to undertake a regular pattern of work (i.e. they should not be asked to work a set number of hours and days each week). Should such a regular pattern develop, these individuals may need to be classed as employees, and a fractional fixed term contract or a fractional open-ended contract may be more appropriate.

27. The hourly rate paid to such workers is derived from UCL's salary scales or prescribed under an approved UCL scheme.

28. To hire an as and when worker directly the hiring manager will need to have someone in mind to do the job; will need to undertake a right to work check; take up references; and submit a contract request via Departmental Transactions on MyHR.

29. The hiring manager will need to calculate the annual leave entitlement and ensure that HRS are instructed to pay the annual leave at the appropriate time.

Unitemps

30. Alternatively, as and when workers, particularly students, can be engaged via Unitemps for a fixed period where minimum hours are guaranteed each week. Unitemps has a pool of workers ready to choose from and will do all the onboarding, including taking references, undertaking a right to work check, setting them up with timesheets, and automatically paying the annual leave. Unitemps charge a fee for this service. A UCL fixed term contract should be considered if the hours are the same each week and the assignment will last for longer than 6 months.

Teaching staff, Visiting Lecturers and PGTAs cannot be hired via Unitemps. 

Agency staff

31. Where you are unable or do not need to recruit on a permanent basis you may engage a worker through our master vendor, Guidant Global. 

Examples of when hiring agency staff may be appropriate include, but are not limited to: 

• you are unclear how long the worker will be needed - for example, they are covering for an absent employee.
• they will be undertaking a project with no defined end date.
• the future of the role is unclear.
• a specific skill is needed for a limited period at short notice. 

32. Where an agency worker continues to undertake the same role with no break in service (other than for annual leave, sickness absence etc) for two years or more, consideration should be given to transferring them on to an open ended contract, if the work has become permanent, or an open ended contract with a funding end date, if the work will cease at some point.

Payment for a one-off duty - visiting lecturers

33. Visiting lecturers undertaking a one-off duty lasting no longer than 3 consecutive days, may be hired directly by UCL, see section below, or through Guidant Global.  UCL recommends using Guidant Global.

34. If the visiting lecturer needs to be paid via a payroll (inside IR35) Guidant Global will arrange this and will conduct an online right to work check using their accredited Identity Document Validation Technology.  Payments will be subject to tax and national insurance contributions. Three payments in any one tax year will normally be permitted, after which the department should consider whether it would be more appropriate to use some other form of engagement.

35. If the visiting lecturer is registered as self-employed and the one-off duty qualifies for self-employment (outside IR35) Guidant Global will be able to pay their invoice.

36. The one-off duty will be linked to a single payment processed after the service has been satisfactorily provided. The frequency and patterns of payments will be monitored.

Payment for a one-off duty - other types of work

37. If the work is a one-off duty lasting no longer than 3 consecutive days, the individual may be paid a one-off payment through payroll to undertake the work.  A right to work check must be undertaken before any work commences.

38. A one-off duty is appropriate where there is no contractual work relationship, and either (i) the individual is not registered as self-employed with HMRC or (ii) the individual is registered as self-employed, but they do not meet UCL’s insurance or other requirements to be set up as a supplier or (iii) the individual is registered as self-employed, but it is not financially viable for UCL to set them up as a supplier as they will not be providing services on a regular basis.

39. The one-off duty will be linked to a single payment processed after the service has been satisfactorily provided. Payments will be subject to tax and national insurance contributions.

40. Only three payments in any one tax year will normally be permitted, after which the department should consider whether it would be more appropriate to use an As and When contract or some other form of engagement. The frequency and patterns of payments will be monitored.

41. A one-off payment can be made in MyHR Departmental Transactions or through Unitemps.

Third-Party Suppliers

42. On occasion UCL may need to engage a third-party supplier (sometimes known as a consultant, a contractor or a freelancer)route. The individual would provide the required services as a self-employed sole trader, or via a limited company (often known as a Personal Service Company or PSC), or via an umbrella company.

43. The third-party supplier is paid for the services contract via an invoice (Accounts Payable route) They must be registered with HMRC as self-employed or as a limited company and are responsible for paying their own tax to HMRC. They are sometimes referred to as being “outside of IR35”.

44. It is the responsibility of the hiring manager to ensure that the appropriate hiring route is established prior to engaging an individual to undertake work. Hiring managers must not commit to paying an individual or personal services company via the third-party supplier route until they have undertaken an HMRC CEST (Check Employment Status for Tax) for the assignment.  A CEST result of “Self Employed” or “Off Payroll working rules do not apply” mean that they can be paid as a supplier without deductions.

45. When setting up a self-employed individual or a PSC as a new supplier a copy of their CEST result needs be submitted along with the new supplier request. Hiring managers may contact recruitment if they need advice on completing a CEST.

46. In addition, the potential supplier must be able to meet UCL’s insurance or other requirements and must be approved by Commercial and Procurement Services. 

47. Only if UCL does not already have a preferred supplier who could undertake the work, should consideration be given to setting up a third party supplier.

48. Academic and Teaching staff designing and teaching core modules with a set syllabus are not normally eligible to be a third-party supplier under HMRC rules and are expected to be engaged as an employee for regular work. 

49. A visiting lecturer or guest speaker who is giving a one-off lecture/talk or short series of lectures/talks where they determine the content, which is outside of the set syllabus, may qualify to be set up as a third-party supplier and will be engaged and paid via Guidant Global. Please read and understand the HMRC rules on visiting and occasional lecturers before requesting to set up a visiting lecturer/guest speaker as a third-party supplier.  If they are not registered with HMRC as self-employed or as a PSC or do not meet UCL’s insurance or other requirements they will need to be engaged as a worker and paid via Guidant Global or via UCL’s payroll. 

50. Examiners for undergraduate courses cannot be set up as a third-party supplier and will need to be hired as a worker. Examiners on post graduate courses may qualify to be set up as a Third-Party supplier if they meet UCL’s requirements. See HMRC guidance on examiners.

51. For further information on setting up a UK third party supplier please see Commercial and Procurement Services. 

Summary of differences between Worker (inside IR35) and Third-Party Supplier (outside of IR35)

 For a more detailed explanation of the differences between different types of workers and suppliers, and the difference between Inside IR35 and Outside IR35 please see Appendix 1. 

Common Scenarios 

52. A range of common scenarios have been described below with guidance as to the appropriate method of engagement for individuals. 

* If the Third Party Supplier route is recommended the individual must meet all of the CEST requirements and UCL’s requirements for a third party supplier.

Appendix 1: Detailed explanations of different types of workers and suppliers.

Appendix 1 Summary of Supplier vs Worker.xlsx

Appendix 1 Summary of Supplier vs Worker.xlsx

If you have any queries on this page, please contact employmentpolicy@ucl.ac.uk

HR Employment Policy
November 2023