Community Dental Centres Ltd v Sultan-Darmon
Section 230(3) of the 1996 Employment Rights Act states that a “worker” is either someone who has a contract of employment or is working under a contract that says they’ll do the work personally. In Community Dental Centres Ltd v Sultan-Darmon, the Employment Appeal Tribunal (EAT) said that if that individual has an “unfettered right” to appoint a substitute, they cannot be a “worker”.
Community Dental Centres engaged Mr Sultan-Darmon in a contractual relationship described as a “licence agreement and contract for service”, which described his status as “a self-employed independent contractor dentist with full clinical freedom and accepting full clinical responsibility”.
The company supplied the premises in which he worked, the basic equipment and support staff. Mr Sultan-Darmon just had to provide his own work clothes and any small additional tools he might need.
The company also limited the amount of time he could take off and required him to participate in an on-call roster. He was paid gross for the work he did and was expected to pay his own tax and national insurance. He did not receive holiday or sickness pay.
The company introduced patients to him, although he could decline to treat them. The contract also said that if he could not provide his services for a continuous period of more than five days, he had to arrange for a locum. If he didn’t, the company would do so, but Mr Sultan-Darmon would be responsible for paying them.
The agreement came to an end in January 2009 and Mr Sultan-Darmon brought a claim for an unlawful deduction of wages which meant he had to show he was either an “employee” or a “worker”.
The tribunal decided that he was not an employee because there was not enough “mutuality of obligation” between the parties. In particular, there was no guarantee that the company would introduce him to patients nor even that he would be obliged to treat any patient whom he did not wish to treat.
It also thought the company did not exercise enough control over him in terms of how he carried out his work to constitute the “position of master and servant”. Nor did it think that an employee would be expected to provide their own professional indemnity insurance (which Mr Sultan-Darmon was).
However, it did think he satisfied the definition of a “worker” because he had to personally ensure the dental work was actually done either by himself or a locum.
The company appealed against the decision that he was a worker.
And the EAT agreed. It said that in finding that there was no mutuality of obligation (to the extent that Mr Sultan-Darmon had some discretion as to whether to turn up and provide those services), there was no legal obligation on him “to do or perform personally any work or services for another party to the contract ...”
Secondly ,the EAT held that as his contract gave him free range to appoint a locum or substitute to do his work and where the clause in his contract was not a sham then he could not satisfy the requirement to personally perform the work
Having reviewed a number of authorities, the EAT concluded that “the unfettered right given to the Claimant to appoint a substitute without any sanction at will means that he cannot be a "worker".
This case is a reminder that workers should check any substitution clause in a contract, whether written or oral. In particular, they should be aware that if they can use a substitute because they don't want to work (as opposed to being unable to, perhaps because they're sick) and/or the clause is not a “sham” (in the sense that in practice they have to personally do the work), tribunals are likely to find that they are not a worker.