Direction of travel clear after EAT's ruling in Somerville

Out-Law News | 27 May 2021 | 10:09 am |

Ed Goodwyn tells HRNews why employers should be cautious about classing staff as self-employed
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  • Transcript

    It is now very clear. Employers should be very cautious about classing staff as self-employed. The case law is this area is only going in one direction and the latest ruling on employment status, from the EAT, just serves to underline that. 

    Back in February you might remember we had the Supreme Court’s decision in the Uber case ruling that the Uber drivers were ‘workers’, not self-employed, and so were entitled to a raft of basic employment rights including holiday pay and sick pay. We wondered whether that approach was restricted to the gig economy but it seems not. The EAT has now looked at this in a professional setting, a barrister offering services to a tribunal panel. We will come onto the implications shortly but first the facts, briefly. 

    The Claimant was Robin Somerville, a barrister who sat as a panel member for the regulatory body the Nursing & Midwifery Council on its Fitness to Practice panels. He is pictured here in Legal Futures following the employment tribunal’s decision in July last year. He brought a claim for unpaid statutory holiday pay on the basis he did have worker status. It was not disputed that Somerville had a lot of freedom under his contract. So, he was not obliged to sit on a panel for a minimum number of sessions and, if he wanted to, he could withdraw from any dates he had accepted. His case was that that freedom and flexibility did not prevent him being a worker because, he argued, legally for worker status there is 'no irreducible minimum of obligation'. The tribunal accepted that argument and on appeal the EAT confirmed that an irreducible minimum of obligation is not essential for worker status. The EAT said it wasn’t completely irrelevant – so it might carry some sway in cases where it was disputed that there was a contract at all, or if it was alleged that there was a customer or client relationship – but on the status question it was not essential. So, in other words, what counts in determining worker status is not the requirement to accept work but rather, when the work is accepted, whether the worker is under a high level of control which, in this case, Somerville was. So, once he had confirmed his availability, he was required to accept the work, perform it personally and in line with the particular standards and requirements of the Council. So, a useful case, and an important one, for any business that engages labour on zero hours contracts or otherwise on a casual basis.  

    Ed Goodwyn has been commenting on this decision for Outlaw in his article ‘No minimum working time required to be counted as worker, EAT rules’. He says the case highlights the challenges for employers in determining worker and employment status, and he questions why the government isn’t stepping in to legislate and codify the law and make it clearer. Let’s hear more about both those points. I phoned Ed and I started by asking him why he think this case is significant:

    Ed Goodwyn: “The reason why I think this is significant is because, to my mind, it shows the way things are going in the sense of the general ability for the EAT and other appellate courts to find employment protection for what we call ‘atypical’ workers and it follows on from the various line of cases we've seen around, principally, the gig economy. So, a couple of months ago we had the very important case in relation to Uber at the Supreme Court where the drivers were held to be workers and this is yet another case where, on balance, the EAT in this case, again, has found that in this situation the person was a worker, and again, to my mind shows the direction of travel on these issues. The big question, I think, from a theoretical perspective is why isn't the government legislating on this issue to provide clarity? Now, the Taylor Report that is now a few years old looked at this particular issue and made a recommendation that we needed further legislative guidance as to who's an employee, who's a worker, and who's a self-employed person - the three categories that are recognised in UK law. Now, whilst the Taylor recommendations were all accepted by the government they still haven't legislated on this particular issue and I saw also that in the Queen's Speech this point doesn't seem to be to be taken up. Now, it may be a deliberate position from the government where they have previously said that the point has been litigated so extensively over the years that everybody knows where they stand insofar as employment and worker status and actually the legislative amendments have got little to add to that. Now, that's a moot point but it's clear that, actually, whilst we are still seeing lots more legislation on the issue of status this is a point that is going to continue to vex employers, workers and employees equally as well as challenge the employment courts.”

    Joe Glavina: “The flexibility Somerville enjoyed is interesting. So, he wasn’t obliged to sit for a minimum number of sessions and, if he wanted to, he could withdraw from any dates he had accepted. Yet the EAT still found he was a worker. How did they get to that?”

    Ed Goodwyn: “Yes, this case looked at the regulatory and statutory test in relation to work and it was accepted quite quickly that the individual did provide services personally and that's very often a key issue as to whether you do have a worker or not. So, employers in a different circumstance, where they are happy to take a substitute for example, can set themselves up, and their contracts, so long as it reflects properly what's going on the ground, and have some degree of confidence that those people would not be workers because they wouldn't be delivering personal service. In this situation that wasn’t really in debate. The issue was whether or not there was what's called ‘mutuality of obligation’ or sufficient mutuality of obligation such that the worker was very able not to turn up to a hearing and, even if he booked a hearing, he could on short just say he wasn't available and in that sense the concept of what was previously called a ‘duvet day’, you know, I can't be bothered to work today, this on my own account, and therefore, I'm not a worker. So, was that relevant for the assessment of worker under the regulatory regime? The court in this case said it was it is relevant but it is not determinative in the sense that the regulatory test was whether or not there was a contract and whether or not there was personal service and whether or not the individual is providing work by way of a client/consumer arrangement. Here, it was found that there was a contract both in relation to each individual piece of work, and there was an overarching implied contract which governs the relationship and on that basis the court said it didn't matter that there wasn't any further mutuality of obligation. There was sufficient for there to be a worker.”

    That case is called Somerville v Medical Practitioners Tribunal Service and is a decision of the Employment Appeal Tribunal. If you’d like to read the judgment for yourself you can – we’ve put a link to it in the transcript of this programme. Ed Goodwyn’s article on the case is called ‘No minimum working time required to be counted as worker, EAT rules’ and is available from the Outlaw website.

    LINKS

    - Link to case report:  Somerville v Medical Practitioners Tribunal Service
    Somerville v Medical Practitioners Tribunal Service (Working Time Regulations) [2021] UKEAT 0257_20_0505 (5 May 2021) (bailii.org)