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Employment status is an individual’s legal status at work and can be determined by a number of factors, including the type of contract in place and what actually happens on a daily basis as part of their role.
Employment|27 May 2021
Insight
It is vitally important for all parties to be clear on the status of those who provide services or work.
This is because an individual’s status will affect what rights they have and the duties that are owed to them. Employees, for example, have the right to bring unfair dismissal claims against their employers, whereas workers do not.
In the recent decision in the case of Nursing and Midwifery Council -v- Sommerville, the Employment Appeal Tribunal (EAT) adds further detail to the complex area of determining worker status.
Mr Somerville was a panel member chair who was appointed to sit on the Nursing and Midwifery Fitness to Practice Committee for a four-year term on 16 April 2012. He was then reappointed for a further four-year term in April 2016.
Mr Somerville brought a claim against the Nursing and Midwifery Council (NMC) for unpaid statutory holiday pay. He argued that he was an employee or a worker of the NMC, however, the NMC denied these claims. The tribunal rejected Mr Sommerville’s argument that he was an employee, and the point was not appealed. The NMC argued that Mr Somerville could not be regarded as a worker as there was no requirement for him to be offered work or to accept it when it was offered; there was not what is commonly referred to as ‘mutuality of obligation’ and that was a prerequisite for worker status to be established.
On the facts of the case, there were a series of individual contracts each time Mr Somerville (a practising barrister) sat as panel chair and for which the NMC agreed to pay him a fee. The tribunal held that there was also an overarching agreement for the provision of Mr Somerville’s services, which meant that there was a contract in place between any sittings of the panel hearings. The NMC was correct that there was no mutuality of obligation; the overarching contract made clear that they were not obliged to request Mr Somerville provide his services, nor was he required to provide the services if so requested by the NMC. To that extent, the contract expressly provided that Mr Somerville would be classed as an independent contractor.
The tribunal, however, found that Mr Somerville was in fact a worker within the meaning of section 230 Employment Rights Act 1996 (ERA) and regulation 2(1) of the Working Time Regulations. The tribunal considered several factors which, taken cumulatively, suggested that Mr Sommerville was engaged by the NMC as a worker and not an independent contractor, for example, Mr Sommerville undertook to perform the work personally; the work was central to the NMC’s functions and Mr Sommerville was required to take mandatory training to name but a few.
The NMC appealed and the EAT rejected that appeal and, after reviewing the authorities on employment status (including the recent Uber case, further details of which can be found here), upheld the tribunal’s decision, finding that an irreducible minimum of obligation was not essential for worker status. The EAT commented, however, that such a condition could be relevant to cases where the very existence of a contract or the terms of a contract were disputed or if it was alleged by one party that there was a customer or client relationship, as opposed to an employment relationship.
This case demonstrates the complexities involved in determining employment status. Whilst there are a number of long-established tests (including but not limited to the mutuality of obligation; control and personal service) they might not all apply to every situation. Each case must therefore be examined carefully on its individual facts and there is not a one-size-fits-all approach for employers to take to successfully establish a certain and desired employment status.
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