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No minimum obligation required to establish worker status

Employment Matters e-update – July 2021

Overview

The Employment Appeal Tribunal has recently looked at the question of whether or not there has to be a minimum obligation on both parties in order for the individual to establish that they have “worker” status.

Worker status is important as should an individual gain that status, they will have various statutory rights such as a right to holiday pay and national minimum wage, amongst others.

Nursing and Midwifery Council v Somerville

Mr Somerville was a barrister appointed by the Nursing and Midwifery Council (NMC) as a panel chair in 2012.

He was given an appointment letter which set out the key terms of his role. This letter stated:

‘You are not an employee or an office holder of the NMC. Your appointment as a practice committee member makes you eligible to provide services, as an independent contractor, to the NMC, as a panellist or a panel chair’.

The NMC was not obliged to offer a minimum number of sitting dates on the committee or indeed any at all.

Mr Somerville was free to withdraw from dates he had accepted. However, he was required to provide his services personally. He could not provide a substitute if he was unavailable.

Mr Somerville brought a claim against the NMC for holiday pay, on the basis that he was either an employee or a worker for the purposes of the Employment Rights Act 1996 (ERA) and the Working Time Regulations 1998 (WTR). An employee is a higher status in law than worker, with additional rights, such as unfair dismissal, granted to those deemed to be employees.

The Tribunal held that, although there was not sufficient mutuality of obligation or control for Mr Somerville to be deemed to be an employee, he was engaged by the NMC as a ‘worker’ for the purposes of ERA, s. 230(3)(b) and the WTR, reg. 2(1)(b).

Even though the contractual documentation described Mr Somerville as an independent contractor, there was in fact an ‘overarching contract’ between him and the NMC over and above the individual contracts each time he accepted an assignment. The NMC appealed.

EAT decision

The appeal was dismissed.

The Employment Appeal Tribunal (EAT) confirmed the decision of the Employment Tribunal and determined that there was a series of individual contracts each time Mr Somerville sat on a panel. In addition to this there was an overarching agreement for the provision of Mr Somervilles’ services.

The EAT conducted a full review of the authorities, and held that while an irreducible minimum of obligation was not essential for ‘worker’ status, it could be relevant to instances where it was disputed that there was a contract at all. That was not the case here.

Comment

This decision shows that ‘worker’ status is not an issue only for those in the gig economy; it has a wider implication for all organisations and how they engage labour. It is important to note that worker status is capable of being established notwithstanding the terms of the contract entered into – rather, it is based on the factual situation.

The decision also shows the willingness of the employment tribunals to find protections for atypical workers.

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