The worker vs independent contractor debate continues

Recently, we have written several blogs relating to the Supreme Court’s ruling on Uber drivers, who have now been afforded worker status and are thus entitled to basic worker’s rights such as minimum wage and holiday and sick pay.

Now, an Employment Tribunal has handed down a similar judgment in an – arguably – very different case.

The facts

Mr Somerville was a barrister appointed by the Nursing and Midwifery Council (NMC) in 2012 as a panel chair. Despite his letter of appointment clearly denoting him as an independent contractor, he did not agree and brought a claim against the NMC for holiday pay. He argued that he was either an employee or a worker under the Employment Rights Act 1996 and the Working Time Regulations 1998.

Last summer, the Tribunal ruled that he was engaged by the NMC as a worker and not an independent contractor.

The judgment

The NMC appealed, arguing there was not sufficient ‘mutuality of obligation’ to class Mr Somerville as a worker, as he was not promised a certain level of work and could turn assignments down if he wished. However, the appeal was dismissed in May 2021 and the original ruling was upheld by the Employment Appeal Tribunal.  The judgment was based on the following factors:

  • There was no ‘right of substitution’ – i.e. Mr Somerville undertook to perform the work himself and could not send another contractor in his place.
  • The rate of pay was fixed by the employer, whereas self-employment is usually characterised by the ability to set one’s own rates.
  • There was an overarching contract for Mr Somerville’s work for the NMC, as well as individual contracts for each assignment.
  • Mr Somerville had to undertake compulsory training for the role.
  • He was also subject to a rigorous formal complaints process if conduct or performance issues were raised, and disciplinary action if the complaint was upheld.
  • He did not market his services to the NMC but was instead recruited via a structured exercise.

The above factors indicated that the NMC had a level of control that would not normally be exercised over an independent contractor. As a result, it was judged that Mr Somerville was subject to “a degree of subordination, to which an independent contractor would be unlikely to submit”, and that he was “semi-detached rather than detached.”

Lack of ‘mutuality of obligation’ not fatal to worker status

While the absence of an ‘irreducible minimum of obligation’ in the relationship between Mr Somerville and the NMC meant he couldn’t be classed as an employee, it was not a prerequisite to being categorised as a worker, the judge ruled. ‘Irreducible minimum of obligation’ refers to the minimum amount of work an employee must perform in order to fulfil their contract; it had already been established that Mr Somerville was not required to take on a set number of assignments and could turn work down. However, the other factors involved in the case were strong enough to result in the ruling in his favour.

A growing body of case law

Judgments like this are likely to become more common as those working in the gig economy and those hired in a similar capacity to Mr Somerville begin to question their employment status. The uncertainty of the coronavirus pandemic has also highlighted the importance of worker protection, including paid leave and sick pay. Combined, these factors are likely to push more workers to claim these kinds of protections.

If you are an employer who is perhaps dealing with some of the issues discussed in your workplace, or facing an employment tribunal claim, then Woodfines’ expert team can help. To find out how we can assist you, please contact us at employmentlaw@woodfines.co.uk or call 0344 967 2502.

 

Savanita Atwal

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