Employee, or not employee: that is the question

9th February 2010

The Employment Appeal Tribunal holds a bank worker is not an employee and therefore not entitled to bring an unfair dismissal claim against his former employer.

Facts

In 1992 Mr Little commenced working for the hospital as a “bank” theatre porter, working on an average of 20 – 30 hours per week. Carrying out the same work, were two other full-time theatre porters. However, they worked under written contracts of employment and therefore had employee status. In contrast, the relationship between Mr Little and the hospital was regulated by a series of written agreements.

Mr Little confirmed on various occasions, in 1997 (in a letter responding to an offer by the hospital of permanent employment), 1999 and 2008 that he wished to continue working as an independent contractor and would work for the hospital on an ‘as and when’ basis. He also recognised that there was no mutuality of obligation ? meaning he did not have to accept work from the hospital nor did they have to offer any to him.

In February 2008, Mr Little was dismissed by the hospital and he later brought a claim for unfair dismissal, for which he required employee status.

Employment Tribunal

As per Carmichael v National Power, the Judge rejected Mr Little’s claim that he was an employee on the basis that he had the freedom to decide whether or not and when to work for the hospital, which is inconsistent when compared to individuals who have employee status.

The hospital could (and did) send bank workers home part the way through a shift if they were not needed and consequently those bank workers were not entitled to payment for the remainder of that shift.

The Judge also dealt with the possibility that the contractual documents were a sham, but concluded that the written documentation accurately reflected the intentions of the parties.

Mr Little accepted that he did not have a global contract of employment. Instead he contended that each separate period of work represented a separate contract and within those contracts the mutual obligation between the parties amounted to a contract of employment, relying on the judgment in Stephenson v Delphi Systems Ltd.

EAT

The EAT held that it was clear that there was no mutuality of obligation as indicated by the documentary evidence. Moreover, each period of work was a contract for freelance services.

The present case did not follow previous authorities because in those cases the workers had to be paid for a shift once they had started it. In this case the hospital was entitled to withdraw work from the bank worker during each period of work. If and when Mr Little was sent home during a shift, he would not be entitled to pay for the rest of that shift. For these reasons, the appeal by Mr Little was dismissed.

The claim was successfully defended at the Tribunal hearing by Susan Thompson Partner and Mr. Stuart Ritchie of Littleton Chambers at the EAT.