Despite landmark decisions by the Supreme Court in recent years, the law relating to employee/worker status continues to evolve. Below, Ryan Ross reviews six appellant cases from the last 12 months which have grappled with how to determine whether an individual is an employee, worker or self-employed.
Legal practitioners will be well-versed with the guidance issued by the appellant courts to assist in determining whether someone is an employee, limb b worker or self-employed. Checklist approaches and shorthand tests have been eschewed in favour of a broad review of all the circumstances. The judgment in Ready Mixed Concrete remains the most helpful starting-point, where MacKenna J offered three conditions for a contract of service to exist – (i) mutuality of obligation (including non-substitution); (ii) sufficiency of control; and (iii) the other provisions of the contract (e.g., whether the worker provides her own equipment, hires her own helpers, bears a degree of financial risk, etc).
Yet the law in this area continues to develop. Though not intended as a comprehensive overview of every case of relevance, the following six cases from the last 12 months illustrate some trends:
The Court of Appeal considered whether a group of part-time football referees were performing under contracts of employment or of service. The Court was asked to determine two issues – mutuality of obligation and sufficiency of control. On the first issue, it was held that a provision on the referees’ contract that allowed them (or their putative employer) to terminate the contract prior to performance did not negate mutuality of obligation. On the second issue, the Court reaffirmed the multifaceted way in which control can be exercised against an employee.
The Court of Appeal considered whether a delivery driver – who was able to switch his shifts with other drivers who worked under their own contracts with the delivery company – had a right of substitution. The Court accepted the findings at first instance that a fettered right to substitute from within a limited pool of workers did not mean that the driver was not required to perform the work personally. The Court held that the first instance tribunal was within its rights to reach the factual conclusion it reached.
The Court of Appeal considered whether the legal advisor to a professional regulator was a limb b worker. The primary issue for the Court to determine was whether there is, as a prerequisite, an irreducible minimum of obligation on the worker to perform some minimum amount of work to establish worker status. The Court held that there was no such prerequisite.
The Court primarily considered whether the three limbs of Ready Mixed Concrete had been misapplied. It made a number of determinations, including that it was right to treat mutuality of obligations and sufficiency of control separately from the other provisions of the contract (and to treat them as pre-requisites to employment); but mutuality of obligation and sufficiency of control should not automatically be excluded from consideration of MacKenna J’s third limb. Moreover, the Court went on to note that the third limb of Ready Mixed Concrete should borrow from contract law – thus, in considering the other provisions of the contract, what was relevant was any issue known (or ought reasonably to be known) by the contracting parties (including whether the putative worker provided other services as a self-employed contractor).
The Court of Appeal (which was composed identically to Atholl and had its judgment handed down on the same day) considered employee status. Amongst other matters, the Court held that the punitive employer was obliged to offer work to the employee; that the Upper Tribunal had made an evaluative finding, which was not wrong in law or principle; that the employer had sufficient control over the employer; and repeated the breadth of factors that could be considered under the third limb of Ready Mixed Concrete.
The Employment Appeal Tribunal considered the worker status of a dentist. It held that the factfinder should not simply add all the different factors (e.g., substitution, control, integration) together in the hope that this determines the answer. Rather, a structured approach should be adopted, applying the words of the statute to the facts of the case. Moreover, the EAT noted that the concept of the irreducible minimum is of limited use in determining worker status. Finally, and curiously, the EAT then made obiter observations about the status of worker status post-Uber, with HHJ Tayler musing that one may have an unfettered right to substitute but still be a worker.
Beyond the obvious point that it is easier to establish worker status now than, say, ten years ago, three trends can be identified from the six appellate cases outlined above:
Though the Court of Appeal in Kickabout did make a positive finding in respect of mutuality of obligation, both Professional Game Match but most decidedly Somerville make clear that there is no need to evidence an obligation on the part of an individual to perform some minimum amount of work to establish employee/worker status. The point made in Somerville – and amplified in Sejpal – is that if an individual is working or providing services under a contract, there is no need for some additional, distinct obligation on her to accept some amount of work (no more than there is an obligation on the putative employer to provide work). Mutuality of obligation is not essential.
Prior to the decision in Stuart Delivery, a right to substitute would have lent weight to the finding that the punitive worker was not contracted to do the work personally. Yet the Court of Appeal has sought to draw a distinction between an unfettered right to substitute and a limited right – limited, for example, to a small pool of workers, as was the case in Stuart Delivery. The obiter comments of the EAT in Sejpal, however, would suggest that, in applying the words of the statute to the facts of the case, formerly useful tests (e.g., substitution) are no longer important. Future case law will no doubt test the extent to which substitution is actually needed in determining worker status.
Finally, as the Court held in Atholl House, just because there was mutuality of obligation and sufficiency of control, this did not create a prima facie relationship of employment. As made clear in Kickabout, determination of employee status is a multi-factorial assessment. No two cases are the same, and factors that are highly relevant in one case may be of little relevance in other cases. Hence why there is perhaps an unwillingness for appellate courts to interfere with determinations-of-fact made at first instance (e.g., the Court of Appeal in both Stuart Delivery and Kickabout were reluctant to overrule factual findings unless they were irrational or wrong in law). All of which is to say that, notwithstanding the plethora of case law, the real battleground of worker status will remain first and foremost before the tribunal of fact.
Ryan Ross has achieved a number of successful outcomes in preliminary (and often multi-day) hearings on employee/worker status. He also regularly advises on employee/worker status and issues arising from IR35. To read more about Ryan’s practice, please click here.