Cotswold Developments Construction Ltd -v- Williams
Although it may seem like a pretty basic question, the courts are still agonising over the difference between an employee and a worker.
In Cotswold Developments Construction Ltd -v- Williams (2006, IRLR 181), the employment appeal tribunal (EAT) said that the key question was whether the individual was required to do at least a minimum amount of work personally.
What were the main facts?
Mr Williams was taken on as a carpenter for Cotswold Developments, who were sub-contractors to the main contractor providing maintenance services to the London Underground.
He had no written contract, nor any oral agreement that established his main terms and conditions. He worked night shifts and was frequently telephoned by the company at short notice to work the next day. He did sometimes refuse work, in which case he was not usually paid.
When he accepted work he was paid a fixed sum, less an 18 per cent standard tax deduction. He had the use of a company van, had to attend courses to satisfy the requirements of London Underground and was under their general supervision.
He worked for the company exclusively from October 2002 to June 2004 when he was dismissed. Mr Williams then complained of unfair dismissal, wrongful dismissal, non payment of holiday pay and unlawful deductions from wages.
What did the tribunal decide?
The tribunal decided that, as Mr Williams was required to perform the work personally, he was a worker and was therefore entitled to holiday pay. He could also claim unlawful deductions from wages as the company had not paid him any.
However, it did not think he was an employee because there was no “mutuality of obligation” between the parties. In other words, the employer did not have to offer work and Mr Williams did not have to accept it. He could not therefore bring claims of unfair and wrongful dismissal.
The tribunal went on to say that, had it found mutuality of obligation, it would have concluded that he was an employee because he worked under the company’s control.
In particular, his shift pattern was decided by the company, they told him what work to do, they supplied him with the necessary tools and equipment, he had the use of a company van and was subject to their supervision.
What did the EAT decide?
The EAT said there had to be “mutual obligations” to have any sort of contract. The real question for the tribunal was “whether or not there was some minimum amount of work which the facts demonstrated that the claimant had obliged himself to do”.
In order to decide whether someone like Mr Williams was an “employee” or a “worker”, the EAT said that tribunals must ask:
• was there one contract or a succession of shorter assignments?
• if one contract, can it be inferred from the facts that the claimant agreed to undertake a minimum amount of work for the company in return for being given that work, or pay?
• if so, did the employer exercise sufficient control over the individual to make it a contract of employment, giving rise to rights of unfair dismissal, as well as a right to holiday pay?
• if there was insufficient control, or any factor negating employment, was the claimant nevertheless obliged to do some minimum (or reasonable) amount of work personally?
In this case, it said that the tribunal did not seem to have addressed the question of whether or not there was some minimum amount of work that the claimant had to do personally. The EAT therefore allowed his appeal and remitted it to the employment tribunal to look at again.
This is a very helpful decision for employees. Cotswold makes clear that the focus should be on whether workers have some obligation to work and employers have some obligation to provide or pay for it, as opposed to having an absolute obligation to do so.