Mutuality of obligation - for an employer to offer work and an employee to accept it - has been recognised as a minimum requirement for a finding that an individual is an "employee" for some time. In Nursing and Midwifery Council v Mr R Somerville, the EAT has considered this in the context of the status of a "worker".
The claimant was a fee-paid member for the Nursing and Midwifery Council (NMC). He had been appointed as part of a large recruitment exercise in 2012 and was contracted to serve at least 30 days per year. His terms of engagement stated he was an independent contractor. He brought a claim for holiday pay, which required him to show he was a worker. He was required to attend mandatory training, could be investigated if there were performance or conduct concerns with the potential sanction of loss of appointment, was paid a non-negotiable fixed fee which the NMC could vary and could not send a substitute. He could though choose to withdraw from cases he was assigned, did not have access to NMC IT systems or an NMC email address and had to submit his own tax returns to HMRC.
A worker is an individual who has entered or works under a contract of employment, or any other contract, whether express or implied, whereby the individual undertakes to do or perform work personally for another party whose status is not that of client or customer of a business or profession carried out by the individual undertaking the work. The concept of "worker" appears in a number of pieces of legislation including the Employment Rights Act 1996 and the Working Time Regulations 1998.
Having considered all of the circumstances, the employment tribunal concluded that there were a series of individual contracts between the parties each time the claimant agreed to sit on a hearing and also an overarching contract between them in relation to the provision of his services - which he agreed to provide personally - as a panel member chair. The tribunal went on to conclude that the claimant was a worker despite an absence of an irreducible minimum of obligation as demonstrated by the fact the claimant was not obliged to offer a minimum amount of sitting dates and he could withdraw from dates he had accepted.
NMC appealed on the basis that the claimant could not be a worker because there was no mutuality of obligations. It was argued that an irreducible minimum of obligation - as identified in the employee caselaw - was a pre-requisite to the statutory definition of a worker.
The appeal was dismissed by the EAT finding that, having established that there was an overarching contract to provide services personally, there was no additional need to demonstrate an irreducible minimum of obligation. It also concluded that the tribunal had also properly considered the question of whether NMC was a client or customer of the claimant.
This judgment could have wide-ranging effects not only for regulatory bodies, such as the NMC, and those who act as panel members but also for individuals engaged on zero hours or casual contracts. Businesses may want to review current arrangements in light of the increased risk of these individuals being able to establish that they are workers and therefore entitled to benefits including holiday pay and the national living or minimum wage.