The case of Exmoor Ales LTD and another v Herriot investigated whether the self-employed status is applicable when the individual is working exclusively for one client or whether that makes them a worker at the organisation.
Since 1990, Herriot worked as an accountant for a brewery called Exmoor Ales Ltd and she was paid upon receipt of her invoices, which were addressed in the name of the accountancy partnership she owned.
In 2011, Exmoor Ales Ltd began to make quarterly payments of £1,000 to Herriot, which she believed were to prevent her from working for any other client. Although she claimed that this made her an employee, there was no documentation confirming Herriot’s position within the brewery.
The brewery claimed that, due to Herriot having her own tax arrangements, that they had employment contracts for other members of staff and that Herriot was not part of their share scheme, she could not be classed as an employee.
The Employment Appeal Tribunal held that Harriot gained employee status in 2011 and, despite there being no written contract, the exclusivity obligation, high level of control and lack of ability to substitute were conclusively in her favour.
This case has confirmed the basic principles of establishing employment status, including the requirement for mutuality of obligation, control and substitution. Despite Harriot having her own tax arrangements, the lack of written agreement to the contrary led the tribunal and appeal to side with her.
Whilst a written agreement will not be held as conclusive evidence, it will be considered with mutuality of obligation, subordination, substitution, control, risk, integration, restrictions and bargaining power to establish employment status.
If you need assistance with managing your employees’ status, be it self-employed, worker or employed, we can help you minimise your business’ risk and costs. Contact our expert employment lawyers on 01332 340 211.