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Employment status update: the right to substitute

Employment status is currently a true hot-button topic for consideration. The Uber and Deliveroo cases, along with Pimlico Plumbers, have raised the question now, more so than ever, as to when someone is truly an employee, worker or self-employed.

One of the key tenets of employment has always been the question of the need to undertake work personally, i.e. can the employee substitute an alternative person in their place without the agreement of the purported employer? The case of Chatfeild-Roberts v Phillips & Universal Aunts Limited has confirmed that the right to substitute does not undermine employment status.

Facts of the case

The claimant was a live-in carer who worked for the first respondent’s uncle for a period of three years. The second respondent was an agency who had introduced the claimant to the first respondent.  The claimant was paid in gross, having to deal with the payment of tax and National Insurance contributions herself.

After receiving a letter of termination, the claimant sought to bring several claims against the respondents. The first issue to be established by the tribunal was to whether she was an employee.

Employment Tribunal decision

The tribunal held that the claimant was an employee.

The claimant was initially employed for six months, which was extended. She stopped preparing invoices for her work and instead became paid by standing order. The claimant also did not work as part of the rota system, which was usual, like the other carers who worked for the second respondent. As a result, the tribunal found there to be sufficient mutuality of obligation and control, and the claimant was considered to be an employee.

Employment Appeal Tribunal decision

The Employment Appeal Tribunal (EAT) considered the respondent’s three grounds of appeal.

The EAT agreed and confirmed the tribunal had made no error in law in confirming that the claimant was an employee of the first respondent.

The EAT also considered the issue of substitution and noted that the claimant only arranged a substitute for her days off, period of jury service and annual leave.  Applying the decision in Pimlico Plumbers,the EAT held thatthe right to substitute only when a contractor is unable to work can still be consistent with personal performance and therefore employment status.

Implications of the decision

This case serves a reminder that employers must give consideration to whether the terms of any contract of employment reflect the situation in practice.

In this case, the fact that the claimant could arrange a substitute and had to account for her own tax and National Insurance did not prevent her from being an employee.

The case is further evidence that, when considering employment status, no one factor is determinative, as the tribunal applies a ‘multifactorial test’, and that any employer would be wise to truly apply their mind to each situation, rather than taking a blanket approach and assuming they will be protected by the contract wording.

For more information on this topic or any other employment law related issues, please contact our employment law team by emailing Lois Watson at [email protected] or by calling 0113 368 7579.

Posted on Oct 1st, 2019 by Lyons Davidson

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