Carmichael and Leese v National Power, Court of Appeal, March 1998 (unreported)

Under present legislation, the gateway to most rights at work is employee status: if you are not an employee, you do not qualify. This is an issue addressed in previous editions of LELR covering workers such as auxiliary coastguards (Jones v Coastguard Agency) and bank nurses (Clark v Oxfordshire Health Authority).

The decisions of the courts are not always consistent and the results sometimes appear arbitrary. This makes it difficult for workers and employers to know in advance their legal rights and responsibilities.

There are encouraging signs that the Labour Government has addressed this issue. Both the National Minimum Wage Bill and the draft Working Time Regulations extend rights to 'workers'. The Fairness at Work White Paper proposes to do likewise for other employment rights.

This is a wider definition than 'employees'. It covers all those who provide services personally, apart from those who do so as a business to a client.

Until this approach is universally adopted it is still necessary for workers to show they are 'employees' to obtain rights to written statements of particulars, itemised pay statements, statutory rights to time off for certain activities or duties and protection against unfair dismissal and redundancy.

GMB has scored a notable victory on this front in a Court of Appeal decision concerning two guides working for National Power. Their job was to show visitors round Blyth Power Station.

They applied for the job on an application form, were interviewed and received a written offer which they accepted. The job was described as on a 'casual as required basis'.

The employers, National Power, argued that this meant that the two women were not employees, although they paid their tax and National Insurance.

The Industrial Tribunal and Employment Appeal Tribunal accepted this argument. They said there was no employment because their was no 'mutuality of obligation': National Power was not obliged to provide work or pay them when no work was available; the guides were not obliged to attend when asked.

One of the Court of Appeal judges shared this view but he was out-voted by his two colleagues.

The decision of the majority of the Appeal Court has major implications for casual workers. They decided that a contract to work on a 'casual as required basis' creates an obligation on the employer to provide a reasonable share of work to each guide when it became available and an obligation on the guides to carry out a reasonable amount of work.

The employer was required to give reasonable notice of the work to be carried out and if such notice was given the guides were required to attend and carry out the work.

On this basis, the Court said that there was a 'mutuality of obligation' which pointed towards a contract of employment. This was a 'global' or 'umbrella' contract for the whole of the period of employment, as opposed to a series of separate contracts each time the guide was asked to carry out a tour and agreed to do so.

This is a welcome contrast with the more restrictive approach taken by the Court of Appeal in the bank nurse case (Clark v Oxfordshire Health Authority [1998] IRLR 125). 
These mutual obligations will arise in most, if not all, casual employments. This is a major step towards recognition that working on a 'casual as required basis' must be treated as 'employment' for the purpose of statutory rights: and treated as such for the whole of the period of the relationship between employer and casual worker.

Industrial Tribunals will still have to apply the normal tests for establishing employment status. It is worth pointing out that Ms Carmichael and Ms Leese clearly worked under the control of the employer, paid tax and NI and were on the national pay scale: all indicators of employment status, which may not be present in every case.

However, the key advance made by this case concerns the nature of obligations between employer and casual worker which should mean that cases brought by casual workers will not in future 'founder on the rock of mutuality of obligation' as the IT and EAT believed this case had done.