Personal Scope of Labour Law (L5/6)

Question 1

Why does a worker’s classification matter?

Answer 1

Major jurisdictional factor for labour law and other branches of the law such as social security, tax law, delict etc.
Common law on the contract of employment.
Statutory rights for employees.

Question 2

How does ERA 1996 s230(1) define an ‘employee’?

Answer 2

(1) In this Act “employee” means an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment.

Question 3

How does ERA 1996 s230 define a ‘contract of employment’?

Answer 3

(2) In this Act “contract of employment” means a contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing.

Question 4

How does TULRCA, s295 define a ‘contract of employment’?

Answer 4

1) In this Act—
contract of employment means a contract of service or of apprenticeship,
employee means an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment.

Question 5

How does Equality Rights Act s83(2) define employment?

Answer 5

Employment means –
Employment under a contract of employment, a contract of apprenticeship or a contract personally to do work…

Question 6

What is the single factor control test?

Answer 6

Instructions not only on what but also how to perform task(s).
Relation of authority and control.
Subordination to managerial hierarchy.
If an independent worker, this wouldn’t happen. One would simply be told what needs done.

See Yewens and Noakes 1880.
Case which tells us that the employer exercises control over an employee.

Question 7

What is the single factor organisation/integration test?

Answer 7

Is the worker a member of the employer’s organisation?
Formal legal subordination, subject to rules and procedures. Work is an integral part of the business.

See Stevenson Harrison & Jordan Ltd v McDonald & Evans 1965.

Question 8

What is the single factor business risk/economic reality test?

Answer 8

Is the person in business on her own account?
If taking the risk, an independent contractor. If not personally taking the business risks, then an employee.
Personal autonomy but dependence on one employer.

See Market Investigations Ltd v Minister of Social Security 1969.

Question 9

What is the single factor mutuality of obligation test?

Answer 9

Present in all contracts (in employment wage-work bargain).
Separate meaning developed in common law in the late 70s: mutual commitment to maintain the relationship over a period of time.
From the mid-80s mutuality of obligation has been used to exclude casual workers from employee status.
Cases: O’ Kelly v Trusthouse; Carmichael.
Continuing legal nexus problematic for those on casual contracts, e.g. zero-hour contracts.

Question 10

Which case proposed the multi-factor test?

Answer 10

Ready Mixed Concrete v Minister of Pensions and NI [1968].

Approved by UKSC in Autoclenz v Belcher [2011].

Question 11

What are the 3 elements to the multi-factor approach?

Answer 11

Elements which are essential to the existence of a contract of employment:
Wage/work bargain.
Element of control.
Other factors point towards employment.

Question 12

What are the other factors which point towards employment?

Answer 12

Who provides the tools, materials, equipment.
Who is responsible to pay tax and national insurance contributions. But note: Young & Woods v West [1980].
Exclusivity clauses.
Annual leave, maternity leave, sick leave etc.
Required to work regularly.
Subject to the employer’s disciplinary procedures, rule book.
Delegation clauses.
Mutuality of obligation.
Personal service/delegation.

No factor is decisive on its own!

Question 13

Which cases tell us about mutuality of obligation?

Answer 13

Carmichael v National Power plc [1999].

Stephenson v Delphi Diesel Systems Ltd [2003].

HMRC v Professional Game Match Officials Ltd (PGMOL) [2021] EWCA Civ 1370.
Concerned the status of professional football referees – are they employees?

Question 14

Which cases tell us about personal service/delegation?

Answer 14

Express & Echo v Tanton [1999].
Possibility to delegate work was used by the court to exclude certain categories from the definition of employee.

Autoclenz Ltd v Belcher [2011] UKSC 41.

Pimlico Plumbers Ltd v Smith [2018] UKSC 29.

Question 15

What does Ferguson v John Dawson & Partners [1976] tell us about the parties’ own classification?

Answer 15

Oral agreement with site management, Ferguson was later injured.
Work if and when available. No formal contract.
‘Not to be treated as an employee’.
Site agent provided all tools. Site agent gave orders.
Declaration is relevant but not decisive.
All other elements pointed to employment.

Question 16

How is Massey v Crown Life Insurance [1978] different from the Ferguson case and how does this tell us about the parties’ own classification?

Answer 16

Branch manager of insurance company asked to change contract to self-employed for tax purposes, while maintaining the same duties then claimed unfair dismissal.

Declaration was decisive here.

Difference between Ferguson and Massey is the deliberate change.

Question 17

How did O’ Kelly v Trusthouse [1984] help demonstrate to us the problem with the dichotomy of employee and independent contractor?

Answer 17

Hotel using bartenders, not employed, no employment contract. A list of bartenders who they called when they had job availability.
When they tried to seek certain employment law obligations. Court turned this down because there was no mutuality of obligations.

Question 18

What is the approximate extent of the legislative protections for ‘limb-b’ workers?

Answer 18

Health and Safety, Working Time, Minimum Wage, some collective labour law (e.g. the right to become a member of a trade union), equality legislation, whistleblowing.

Question 19

How does ERA 1996, s230(3) define a ‘worker’?

Answer 19

‘An individual who has entered into or works under –
(b) any other contract, express or implied, oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer.’

Question 20

What are the two key elements to worker status?

Answer 20

Personal performance.

Is the core business a CLIENT or the EMPLOYER of the person performing the service?

Question 21

What does Pimlico Plumbers v Smith [2018] UKSC tell us about the requirement of personal performance for worker status?

Answer 21

(Following Autoclenz).
The people who wanted to receive protections. Their contract had a provision which said they could actually contract out their work. Given other clauses in their contract, they were not actually able to do this in practice (limited pool of workers they could contract out to). Other features of the contract suggested this too e.g. need for logo on work van.

Supreme Court says it’s important to look at:
What is the dominant feature of the contract?
What is the reality of the relationship?

Question 22

What does James v Redcats [2007] EAT tell us about the requirement of personal performance for worker status?

Answer 22

When is the power to delegate work consistent with a contract for personal performance?

The individual is on holiday or “unable” to work = personal performance.
“Unable or unwilling“ to work = not personal performance.

Question 23

How does The Independent Workers Union of Great Britain v The Central Arbitration Committee [2021] EWCA Civ 952 (Deliveroo) show the requirement of personal performance for worker status?

Answer 23

Sought declaration that Deliveroo riders are workers.
Substitution clause was acted on in practice, test of personal performance not met.

Question 24

How does Stuart Delivery Ltd v Augustine [2021] EWCA Civ 1514 show the requirement of personal performance for worker status?

Answer 24

Claimant could release a slot to other couriers via the Respondent’s app. Not sufficient right of substitution to remove obligation of performing work personally.
Controlled and monitored by the company through the app, had to be to a pre-approved person.

Question 25

What does the personal performance requirement mean in practice?

Answer 25

In sum, unfettered right of substitution is inconsistent with personal performance.
However, limits/requirements placed by the employer, one-off inability are likely compatible. Dominant feature of the contract.

Question 26

What does it mean to ask ‘is the core business a client or the employer of the person performing the service’?

Answer 26

Economic Dependence/Risk.
Can the person be said to be an entrepreneur, taking risks and chances of loss and profit?
Exclusivity clauses.
Full-time work.
Compliance with organisational rules.

Question 27

How does Pimlico Plumbers v Smith [2018] UKSC show the employer/client test?

Answer 27

Uniform, company logo on the van, work 40 hours per week, exclusivity clauses.
Core business as employer and not a client.

Question 28

How does Byrne Brothers (Formwork) Ltd v Baird & Ors [2002] IRLR 96 show the ‘lower pass mark’ for worker status?

Answer 28

“Drawing that distinction in any particular case will involve all or most of the same considerations as arise in drawing the distinction between a contract of service and a contract for services – but with the boundary pushed further in the putative worker’s favour… The basic effect of limb (b) is, so to speak, to lower the pass-mark, so that cases which failed to reach the mark necessary to qualify for protection as employees might nevertheless do so as workers.” (para 101).

Question 29

How does Uber BV and Ors v Aslam and Ors [2021] UKSC 5 show the judicial test and pass mark for worker status?

Answer 29

Drivers claimed they were “workers” for the purposes of the Employment Rights Act 1996, the National Minimum Wage Act 1998 and the Working Time Regulations 1998.

Claim upheld in the ET, EAT, COA and then UKSC.
Level of control of Uber via the app. Time spent in app. Purposive interpretation of statutory definitions of ‘worker’ & ‘working time’. Dependence and vulnerability.

Relevant legislation precludes employers from contracting out of protections.

Question 30

How does Nursing and Midwifery Council v Somerville [2022] EWCA Civ 229 show a judicial shift in the requirement for mutuality of obligation?

Answer 30

Not a prerequisite to a finding of worker status that there should be an obligation to perform a minimum amount of work.
Provides further clarity on the test for worker status.
Important regarding entitlements e.g. National Minimum Wage and paid holiday.
Shows that in recent cases, mutuality of obligation is a less significant component.

Question 31

What does Coulson LJ say in The Independent Workers Union of Great Britain v The Central Arbitration Committee [2021] EWCA Civ 952 (Deliveroo) about collective labour rights?

Answer 31

Para 96, sharing opinion of Underhill LJ:
‘The result may seem counter-intuitive: it may be thought that those in the gig economy have a particular need of the right to organise as a trade union. So I quite accept that there may be other cases where, on different facts and with a broader range of available arguments, a different result may eventuate.’

Appeal heard in UKSC in April 2023. Judgment pending.