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Status matters?

Ian Machray explores whether a minimum level of obligation is required for “worker” status?

Caselaw has established that one of the criteria required for an individual to be considered an employee is a minimum level of obligation to accept and perform work.  The EAT was recently required to consider whether this irreducible minimum also applies to workers.

In this case, S was a fee-paid member on the panel of the NMC’s Fitness to Practice Committee. The NMC was not obliged to offer S a minimum number of sitting dates on the panel and S was free to withdraw from any dates he had previously accepted. When S did work, he was required to provide his services personally.

S sought to bring claims against NMC, which required him to be a “worker” in order to be protected under the definitions given under the ERA and the Working Time Regulations 1998 SI 1998/1833 (WTR). Under the ERA, a worker is any individual who has entered into or works under a contract of employment or any other contract where they undertake to do or personally perform any work or services for another party to the contract (who is not a client or customer under the contract).

The Employment Judge found that S was not an employee as he was under no obligation to perform a minimum amount of work for NMC.  However there were a series of individual contracts, arising each time S agreed to sit on the panel, as well as an overarching contract for S’s provision of his services and it was not a client or customer contract. As such, the ERA definition of worker was met, and the judge found that S was a worker.

The NMC appealed to the EAT on the worker point, arguing that an irreducible minimum of obligation was also required for the individual to be considered a worker (as opposed to a self-employed contractor). However, the EAT rejected this argument and was satisfied that the tribunal was correct in finding that S had worker status.  It considered case law including the recent Supreme Court decision in Uber and determined that there was no requirement of an irreducible minimum of obligation for worker status.

There will no doubt be ongoing caselaw regarding employment status and it appears to be getting harder to show that someone is genuinely independent and self-employed.  This case highlights that businesses need to be wary of this where there are a series of individual short-term contracts. Having no minimum obligation to accept and perform work outside those separate contractual assignments could potentially indicate that the individual was self-employed and not a worker, but it is not decisive.  The level of obligation will also be relevant when determining if there is an overarching contract for the provision of services (in addition to the short term individual contracts that are put in place each time a work assignment is agreed) or if it is a client or customer contract (and therefore the individual does not satisfy the definition of worker).