Status still matters

Worker status, like Piers Morgan, is one of those things that we think has gone away and then it pops up again! Its importance is undisputed (for the avoidance of doubt, that’s worker status and not the much hated/loved UK journalist!); status is key for establishing entitlements such as paid holiday, national minimum wage etc. However, what continues to be a source of dispute is when an individual is a worker, rather than being self-employed.

The direction of travel currently, and many would say rightly so, is to extend the definition of worker outwards rather than reducing its scope and therefore many ‘self-employed’ individuals may in fact be workers. The case of the Uber drivers just over 12 months ago (read our ebriefing on the decision here) and the case reported below continues in that direction. Importantly, these decisions were made in the Supreme Court and Appeal Court respectively so must be taken into account by lower courts.

Somerville v Nursing and Midwifery Council CA 
The facts of this case are relatively specific to the case and so not worth dwelling on for too long. Essentially Mr Somerville was a member of the Nursing and Midwifery Council (NMC) and chaired its Fitness to Practise Committee. The agreements that were drawn up stated he was an independent contractor and that the NMC was not obliged to provide work and Mr Somerville was not obliged to do it. Mr Somerville could decide whether he wanted to sit on a panel when one was arranged. 

The NMC was then somewhat surprised when Mr Somerville wanted to know where his holiday pay was that he alleged he was due under the Working Time Regulations 1998. He successfully argued at the Employment Tribunal, and then at the Employment Appeal Tribunal, that he was a worker as there was a contract ‘where the individual undertakes to do or perform personally any work or services’ as required by Regulation 2(1)(b) to establish a worker status. It was found that contracts were created each time Mr Somerville agreed to sit on a panel in return for payment. As part of those contracts, (i) Mr Somerville had no right of substitution, (ii) he agreed to offer his personal services, and (iii) NMC was not a client nor customer of his business. All three key pillars to the issue of worker status. 

However, the NMC did not want to accept these findings: Did there not need to be some sort of mutual agreement between the two whereby NMC was required to provide work and Mr Somerville was required to do it before a worker/employer relationship was recognised? The Court of Appeal referred to this as an ‘irreducible minimum of obligation’. It concluded, applying the Supreme Court’s decision in Uber, that there was no need for any contractual obligation between the parties for the worker/employer relationship to exist. 

What does this mean in practice?

• How does this affect zero-hours workers? This case reiterates the position regarding assignment-only zero-hours workers. For the period of their assignment, zero-hours workers have at least worker status (could even potentially have employment status) and so are entitled to paid holiday, national minimum wage etc. This exists in the absence of any obligation that the worker will accept any further assignments, or that the employer will provide them. It is worth noting that if an agreement exists between each assignment, the zero-hours worker may even become an employee for the duration of the entire continuous relationship and so be afforded additional rights and benefits. There must be some level of mutuality between the parties, however, for an employee/employer relationship to exist.
• How much holiday entitlement? Once the holiday entitlement is established, this does not end the debate. The next question is how much holiday workers are entitled to. This question is partly dependent on the long-awaited Supreme Court decision in Harpur Trust v Brazel. We are waiting to hear whether part-year workers are entitled to the same amount of paid holiday as full-year workers. Previously, part-year workers, which includes zero-hours workers who have an umbrella contract existing between assignments, would have been allotted holiday based on a pro-rata calculation. The Supreme Court is deciding whether this principle is correct or whether, as the Court of Appeal decided, this calculation is incorrect.  Do listen to our podcast here for more details. It is our advice currently that holiday entitlement for assignment only workers can be calculated on a pro-rata approach. However, do watch out for any updates once this case has been decided. 

For more information

If you would like any further information on this or any other matter, please contact Anna Dabek .

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