Coffin Mew's Employment News Issue 63
“You just have to accept that some days you are the pigeon, and some days you are the statue.”
David Brent, The Office
“When people say to me: would you rather be thought of as a funny man or a great boss? My answer's always the same, to me, they're not mutually exclusive.”
David Brent, The Office
Welcome
This week, I have some good news and some bad news. The bad news is that I did not win the £148 million Euro Lottery and therefore my ramblings must continue. The good news is that my lack of a newly acquired fortune meant that I watched the closing ceremony last Sunday and witnessed Boris Johnson and David Cameron ‘dancing’ to the Spice Girls and life felt good again!!
The icing on the cake was when I convinced my mother in law (who is currently visiting Tibble Towers until the fridge is empty) that Boris Johnson had decided that the beach volleyball court will become a permanent fixture at Horse Guards Parade and that the next Queen’s birthday celebrations will be conducted around the court so that the special sand is not disturbed by the horses! I kept a straight face for 10 minutes before my conscience got the better of me and I put her out of her confused misery.
Anyway, as I am obliged to tell you a bit about the law, I thought that this week’s topic would be on the subject of obligation when it comes to employment status.
The Legal Bit
The employment status of casual workers is quite difficult to work out. Sometimes, casual workers will only be classed as ‘workers’ and will therefore have fewer employment rights. Sometimes, casual workers will be employees and therefore they will be entitled to a greater number of legal rights, including the right not to be unfairly dismissed. In practice, casual workers are often engaged in what is known as a zero hours contract, where the business does not guarantee to provide work and only pays for the work done or under an ‘umbrella contract’, where the individual is worker is considered to be engaged on a series of individual contracts, but there is an over-arching contract that exists even when the individual is not working.
When it comes to working out what the status of the casual worker actually is the tribunals have to consider the following points:
- Is the person required to provide their service personally? If it is possible for the person to send a substitute this could illustrate that personal service is not important in the working relationship.
- Is the employer obliged to provide work and is the person obliged to do the work if provided? This is commonly known as the principle of ‘mutuality of obligation’.
- Does the employer exercise sufficient control over how the person does the work? If the person has free reign about how they do the work then this would look more like a self-employed person.
When there are disputes about the status of casual workers, the main focus tends to be on the principle of mutuality of obligation and whether the individual in question was an employee during the periods when they were actually working or whether there is a connection between the working periods to show sufficient mutuality of obligation during the periods when the individual was not working.
This complex issue was considered recently in the case of Drake v Ipsos Mori UK Limited. Mr Drake worked as a market researcher for the company. He was never given a contract of employment and he was told that he was a worker and not an employee. He carried out his work under a number of individual assignments over 5 years and he was always told by the company that there was no obligation on him to accept an assignment and similarly, there was no obligation on the company to provide assignments to him.
Even though Mr Drake did not have a written contract of employment, he was given a handbook. In the handbook, it said that once Mr Drake had accepted an assignment it would be viewed as a ‘verbal contract’ and he was expected to complete the assignment to a deadline.
Mr Drake was eventually removed from the company’s panel. He brought a claim of unfair dismissal and alleged that he was an employee (and not a worker) because each of the individual assignments was a contract of employment and that there was also an over-arching umbrella contract that linked the assignments together. The company did not agree with Mr Drake’s view that he was an employee; they said that he could not be classed as an employee because there was no mutuality of obligation, either during the time of each assignment or the time between the assignments.
Mr Drake lost in the Employment Tribunal because the company’s argument was accepted that it did not have to offer work and Mr Drake did not have to accept it – therefore no mutuality of obligation – therefore no employment relationship – therefore no right to an unfair dismissal claim.
Mr Drake appealed to the Employment Appeal Tribunal on the technical interpretation that the Employment Tribunal had given to the ‘mutuality of obligation’ point. Mr Drake argued that he was obliged to finish each assignment once he had accepted it. The company argued that this only amounted to a moral (and not a legal) obligation and that Mr Drake could not be penalised if he did not finish the work. The company also argued that either it or Mr Drake could therefore walk away from the assignment at any time during the assignment itself.
The EAT upheld Mr Drake's appeal. The EAT decided that there was sufficient mutuality of obligation for an employment relationship to exist. The EAT found that during each assignment, there was a contract in existence and a mutuality of obligation, namely an agreement to carry out work in return for payment. The EAT said that even though either party could end the assignment when it wanted to did not mean that there was no contract in existence at all.
At this stage, the EAT only concluded that the original Employment Tribunal had made a mistake in deciding that Mr Drake had not been employed by the company, but the EAT did not make any actual finding about whether Mr Drake was an employee of the company or not, as this is a decision for the Employment Tribunal. As such the EAT has sent the case back to the Employment Tribunal for a new hearing – we will keep our eyes peeled for the outcome.
In another recent case of Pulse Healthcare v Carewatch Care the issue of umbrella contracts was considered by the EAT as well. In this case, a number of carers were employed by Carewatch provide care for a disabled person. Carewatch had a contract with a local Primary Care Trust to carry out the work. When Pulse Healthcare took over the contract with the PCT after a re-rendering process, the carers argued that they had TUPE rights against the new contractor. As part of the proceedings, a preliminary issue had to be decided about whther the carers were employees and whether they had sufficient continuous service of one year as employees in order to afford them certain claims under TUPE.
When the carers were employed by Carewatch, they had zero hours contracts which said that there was no obligation to provide work to them. This was the basis upon which the argument was made that the carers were not employees – as there was no mutuality of obligation to give and carry out work. It was also argued that, because of the zero hours contract, each shift that the carer worked was a standalone and discrete contract and therefore, there was no over-arching umbrella contract, and as such, even if the carers were found to be employees, they did not have one year’s continuous service.
The Employment Tribunal actually decided that the zero hours contract was not an accurate reflection of the ‘real world’ agreement with the carers. In reality, the carers were obliged to carry out the work offered to them and they were expected to do it themselves (i.e. they could not send a substitute to do it). In addition, the Employment Tribunal decided that was an over-arching umbrella contract in place because of the intensive care arrangements that had to be in place to look after the individual – it was not accepted that this type of clinical care would be left to a number of random ad hoc and individual shifts where there were no guarantees either from the business or the carers. As such, the carers were found to employees with continuity of service.
As an aside.....
This week, I read about a new poll carried out by officebroker.com which has discovered that most employees would prefer to have a boss who was like David Brent (the infamous ‘manager’ from the television programme The Office).
Apparently, a significant proportion of employees said that being able to have a laugh with a manager was considered to be the best way of forming a good working relationship between an employee and the boss. A quarter of the respondents said that a sense of humour was the most valued characteristic in a boss, which was followed by trust, fairness and honesty!!
In light of this groundbreaking research, I am going to adopt a new policy of being deceitful, dishonest and untrustworthy, but crack more one-liners. Management training providers around the country will be replacing ‘how to be a better manager’ courses with crash courses in stand-up comedy at the Edinburgh Fringe. It’s the future – embrace it.
Until next week.
Kind regards,
Darren
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