- February 10, 2017
- Posted by: Josiah Hincks Solicitors
- Category: Employment Law Updates
Many companies that deal with the public like their operatives to appear to clients as their representatives whilst maintaining that they are self-employed. However, such business models will be much harder to maintain after a Court of Appeal ruling.
The case concerned a plumbing company that used 125 operatives to supply services to householders on its behalf. Amongst other requirements, they had to work a five-day, 40-hour week and to be on call at all times during their shifts. They also had to wear uniforms, drive vans and carry identity cards that bore the company’s logo and to conform with personal conduct guidelines.
On the other hand, the operatives had to pay rent on their vehicles and provide all their own tools, equipment and materials. They had to arrange their own professional indemnity insurance cover and their contracts with the company stated in terms that they were in business on their own account and responsible for paying their own Income Tax and National Insurance Contributions.
One of the operatives launched Employment Tribunal (ET) proceedings against the company, claiming amongst other things that he was unlawfully and unfairly dismissed following a heart attack. In the circumstances, a preliminary issue arose as to the basis on which he performed work on the company’s behalf.
The ET found that he was ‘a worker’, within the meaning of the Employment Rights Act 1996. Although he was not an employee in the ordinary sense, his working situation met the definition of employment within the Act. The ruling meant that the ET had no jurisdiction to entertain his unfair and wrongful dismissal claims. It was, however, able to consider his complaints of direct disability discrimination, failure to make reasonable adjustments, under-payment of holiday pay and unauthorised deductions from wages. The ET’s decision was subsequently upheld by the Employment Appeal Tribunal.
In dismissing the company’s challenge to that result, the Court could find no flaw in the ET’s conclusion that the operative’s relationship with the company was not that between an independent contractor and his customer or client, but rather that of a worker. The Court focused in particular on the fact that the man had no unfettered right to substitute another to carry out his work and was contractually obliged to work for a minimum number of hours each week.