In our last few editions of Workplace Law we have covered the 3 big cases of Uber, CitySprint and Pimlico Plumbers - cases which have highlighted the courts new robust approach to looking behind a contract in order to determine whether an individual is an employee or a worker. The recent case of Capita Translation & Interpreting Ltd v Siauciunas, however, has called for the law to go back to basics and to remember that there is still a requirement for mutuality of obligation in order for an individual to be considered an employee. What is meant by ‘mutuality of obligation’? In short, mutuality of obligation is the obligation for an employer to offer work to a worker / contractor, who in return has an obligation to accept and take on such work when it is offered. This mutuality of obligation is of crucial importance when it comes to determining whether or not someone is an employee. Put simply, if there is no mutuality of obligation, the individual will likely be a self-employed worker.
In the Capita case, the claimant was an interpreter under a framework agreement who worked on an assignment-by-assignment basis. The claimant claimed discrimination on the grounds that he had been treated less favourably because of his race and his religious or philosophical beliefs. In order for his claim to be heard however, the interpreter first needed to prove that he was an employee, as this would have allowed him to bring a claim under the Equality Act.
The claimant succeeded at first, with the employment tribunal finding that he was an employee, despite the fact that there was no mutuality of obligation in existence. The tribunal felt that as he personally did work, it was not relevant that there was no mutuality of obligation and the claimant was therefore an employee.
The case went to the Employment Appeal Tribunal (EAT) who allowed the appeal. They stated that the employment tribunal had erred in failing to consider the nature of the relationship between the claimant and Capita when the interpreter was not providing his services, during a period of fall off in demand, however long that was. They found that where no mutuality of obligation was in existence, there could be no employer / employee relationship. As a result, the EAT found the interpreter to not be an employee and he was not entitled to have his discrimination claim heard.
So what does this case tell us? Well it reminds us that the essential elements which must all be in place in order for an individual to be considered an employee. These are:
- The individual has to have a contract with the employer. This can be verbal, but preferably would be in writing.
- The individual has to carry out the work personally. The individual must not send a substitute to carry out the work when he is unable to carry it out himself.
- There has to be “mutuality of obligation” between the two parties. The employer must provide work and the individual must be obligated to do the work.
- The employer has to have “control” over the work that the employee does. This can relate to the hours that the individual has to work, the uniform they wear or the conduct that they must adhere to when carrying out the role.
If one of the above elements is missing, the courts will find that an individual is a worker and as a result is not entitled to the employment rights that employees are able to benefit from.
The courts are becoming much more willing to look behind self-employed contracts and into the reality of working relationships, therefore it is important to consider whether in practice any of these elements are present.
If you would like to further discuss any of the information included above, please email firstname.lastname@example.org.