Review atypical workforce after Somerville ruling, warns lawyer

It is now very clear. Employers should be cautious about classifying staff as self-employed. The case law is this area is only going in one direction and the latest ruling on employment status, from the Court of Appeal, only serves to underline that. The case is Nursing and Midwifery Council v Somerville and it says an individual can be a worker without there being any commitment to offer or accept a minimum amount of work. 

To put this in context, back in February last year you might remember we had the Supreme Court’s decision in the Uber case ruling that the Uber drivers were ‘workers’, not self-employed, and so were entitled to a raft of basic employment rights including holiday pay and sick pay. We wondered whether that approach was restricted to the gig economy but it seems not. The Court of Appeal has now looked at this in a professional setting, a barrister offering services to a tribunal panel. We will come onto the implications shortly but first the facts, briefly. 

The Claimant was Robin Somerville, a barrister who sat as a panel member for the regulatory body the Nursing & Midwifery Council on its Fitness to Practice panels. He brought a claim for unpaid statutory holiday pay on the basis he did have worker status. It was not disputed that Somerville had a lot of freedom under his contract. So, he was not obliged to sit on a panel for a minimum number of sessions and, if he wanted to, he could withdraw from any dates he had accepted. His case was that that freedom and flexibility did not prevent him being a worker because, he argued, legally for worker status there is 'no irreducible minimum of obligation'. The tribunal accepted that argument and on appeal the EAT last year confirmed that an irreducible minimum of obligation is not essential for worker status. The EAT said it wasn’t completely irrelevant – so it might carry some sway in cases where it was disputed that there was a contract at all, or if it was alleged that there was a customer or client relationship – but on the status question it was not essential. So, in other words, what counts in determining worker status is not the requirement to accept work but rather, when the work is accepted, whether the worker is under a high level of control which, in this case, Somerville was. So, once he had confirmed his availability, he was required to accept the work, perform it personally and in line with the particular standards and requirements of the Council. That view has now been confirmed as correct by the Court of Appeal.

So, clearly this is an important case for any business that engages labour, whether on zero hours contracts or otherwise on a casual basis. Emma Malczewski has been looking at the judgment and she joined me by phone to discuss what it means for employers:  

Emma Malczewski: “So, employers should be reviewing the arrangements that they've got in place, written and informal arrangements, with atypical workers in particular, particularly those they consider to be self-employed or workers, Joe. They should consider whether overarching contracts are necessary, if they do have them. So in Mr Somerville’s case, he had a series of long-term contracts and then each time he took on a piece of work for the organisation he was given another contract underneath that and one of the things the Court of Appeal was very interested in is the impact of that overarching umbrella contract on the whole arrangement and I know that organisations will be using contracts and arrangements like that and this case is really a sign that employers should be considering whether those are truly necessary or not.”

Joe Glavina: “So, if employers do review their arrangements, as you say, and check their contracts, is that enough?”

Emma Malczewski: “The tribunals are really most interested in what is happening in the ground in reality. So, in the Uber case, the courts were very clear about that and it didn't matter what documentation Uber had put in place, to some extent. One of the main things that the courts were focused on was what the drivers were actually doing in practice, how were these arrangements operating? So, whilst it's a good starting point to start with the documentation, the other thing that employers need to be doing is making sure - and this is sometimes difficult from a HR and legal perspective - but make sure they understand exactly what is happening on the ground with these individuals.”

Joe Glavina: “I know you are talking to a number of your university sector clients, Emma. Why does this case affect them?”

Emma Malczewski: “So the original judgement in this case that made headlines came out last summer and this most recent judgment is really just reaffirming that original finding. So I think a lot of gig economy employers would have picked up this judgment from last summer but it may well have escaped the attention of some of the other sectors who also use atypical workers. Universities is one of those sectors. They engage people in a variety of ways because it suits students and some of the staff engaged on that basis. So, for example, residential wardens living in accommodation, and that type of work. So universities do need to have a look at individuals in their organisation who may fall into the worker category when the university might be of the view that they are engaged on a self-employed basis for the moment.”

Joe Glavina: “So your message to HR, Emma?” 

Emma Malczewski: “I think this judgment is really flagging to employers who use atypical workers that they do need to try to get their house in order as best they can now. There doesn't need to be an obligation on an employee to accept work for them to be a worker and so I think that is something to bear in mind for the future.”

Emma mentioned the Supreme Court’s ruling last year in the Uber case. One of the key factors in that case which has been underlined by the Court of Appeal in this case is the importance of the amount of control or subordination exerted on the individual in relation to the work they carry out. Stuart Neilson has talked to this programme about that in some detail in ‘Uber ruling: ‘control comes at a cost’ for UK gig employers’. That programme is available for viewing from the Outlaw website.

LINKS
- Link to judgment: Nursing and Midwifery Council v Somerville