What makes a worker a ‘worker’?
Employment law divides up individuals who perform work into one of three categories: ‘employees’, ‘workers’ and ‘self-employed / independent contractor’. These categories are important because they determine the scope of a person’s statutory rights, with employees having the greatest protection and independent contractors the least. While an individual’s status is always fact-specific, a recent case in the Court of Appeal (Court) provides some useful clarification on what is (and what is not) needed to establish ‘worker’ status.
The case concerned Mr Somerville, who worked as a panel member on the ‘Fitness to Practice’ Committee of the Nursing and Midwifery Council (NMC). Mr Somerville entered into a services agreement with the NMC which set out how his services were to be provided during Fitness to Practice hearings and described him as an independent contractor. This agreement did not impose any obligation on the NMC to provide a minimum level of work or on Mr Somerville to accept any work when offered. It also permitted Mr Somerville to cancel work after he had accepted it. Nonetheless, Mr Somerville did carry out around 50-100 days of work per year for the NMC for several years.
Mr Somerville subsequently brought a claim for unpaid holiday pay under the Working Time Regulations 1998 (WTR), which required him to have ‘worker’ status. At a preliminary hearing to determine Mr Somerville’s status, a tribunal held that he satisfied the statutory definition of a worker for the purposes of the WTR, since he was required to perform his services personally and the NMC was not a customer of any business carried on by him.
Appealing that decision, first to the Employment Appeal Tribunal (EAT) and then to the Court, the NMC argued that there was insufficient ‘mutuality of obligations’ to establish worker status. Citing the decision of the Supreme Court in the high-profile case of Uber VB and ors v Aslam and ors, it claimed that for an individual to be a ‘worker’, there must be some ‘irreducible minimum of obligation’, meaning that the parties must be required to offer and perform respectively some minimum amount of work.
The EAT and the Court rejected the NMC’s argument. The Court held that each time the NMC offered Mr Somerville a hearing date and he accepted it an individual contract arose. On each such occasion there was a requirement on Mr Somerville to work personally and the NMC was not by virtue of that contract a customer of any business carried on by him. Accordingly, Mr Somerville was a ‘worker’ under the WTRs when working under these individual contracts. The fact that work could be cancelled after acceptance did not impact on the Court’s assessment of the relationship when the work was in fact performed.
The Court explained that the reference by the Supreme Court in Uber to an ‘irreducible minimum of obligation’ was in the context of determining when an obligation to perform work arose for the purposes of identifying Uber drivers’ ‘working time’. There was nothing in the Uber decision which meant that, in addition to a person working personally under a contract for a third party who was not that person’s customer, there must be some superadded, distinct obligations to provide and accept work before an individual can be classified as a worker.
The outcome in the case of Mr Somerville highlights that findings on employment status will be based on an analysis of how the working relationship actually operates in practice, rather than on labels attached to the parties in contractual documents. It also underlines that the key elements of worker status are the requirement on the individual to perform work personally and the other party not being a customer of a business carried on by that individual.
Despite the Court’s helpful decision in this case, employment status remains a highly technical area, where getting it wrong can result in expensive and time-consuming tribunal claims. If you would like advice on a particular query related to employment status, please contact us at [email protected] and we would be happy to assist.
