Labour & European Law Review Weekly Issue 286 13 September 2012
To claim unfair dismissal, the claimant has to prove that they are an employee. In Drake v Ipsos Mori UK Ltd, the Employment Appeal Tribunal (EAT) said that there was a contract (although not necessarily of employment) between the parties because there was an agreement by Mr Drake to undertake work for Ipsos in return for payment.
Mr Drake worked as an interviewer for Ipsos Mori on an “assignment by assignment” basis from February 2005 until November 2010. During that time he was not issued with a contract of employment or any statement of terms and conditions of employment, just some guides and a handbook for interviewers.
One of the documents stated explicitly that he was a worker, not an employee. The handbook made clear that there was no obligation on the company to offer him work, nor was there any obligation on him to accept it (known as mutuality of obligation).
The handbook also specified, however, that once he accepted an assignment “it is considered as a verbal contract that you will complete the job within the deadline and according to the survey specifications".
Despite that, there were occasions when Mr Drake failed to complete his assignments. Equally, he was sometimes asked to complete assignments for other interviewers.
When Ipsos removed Mr Drake from their panel of interviewers in 2010, he claimed unfair dismissal, arguing that each individual assignment constituted a contract of employment. Ipsos said that as there was no mutuality of obligation, he could not be an employee.
The employment judge said that it was clear from case law that, at the very least, there had to be mutuality of obligation for a contract.
In this case, he concluded that not only was there no obligation on Ipsos to provide further work once an interviewer had completed an assignment, the company could change its mind and remove it, just as it was open to an interviewer to return an assignment.
As there was no contractual obligation on either side for the assignment to be completed by the person to whom it was originally allocated, there could be no mutuality of obligation.
The EAT, however, disagreed, saying that the fact that the assignment could be brought to an end did not mean that there could not be a contract while it was being undertaken.
Indeed, it was clear that there was a contract between the parties as there was an agreement by Mr Drake to undertake work for Ipsos in return for payment, which was referred to explicitly in the handbook as a "contract". The fact that either side could terminate it at will was not inconsistent with the existence of a contract of employment.
It added that the employment judge had failed to deal with a key feature of the case – the firm's own handbook which stipulated there was a contract. The EAT was in no doubt that there were successive agreements between the parties whereby, in return for remuneration, Mr Drake conducted market research assignments.
Mr Drake had therefore been employed on a series of contracts, under which he was obliged to work personally for Ipsos Mori UK Ltd until he returned or completed the assignment, or it was withdrawn.
The EAT remitted the case to the Tribunal to decide whether Mr Drake was required to carry out the work personally; whether he was required to work under the control of Ipsos; whether the other terms of the contract were consistent with a contract of employment; and finally, whether the assignments constituted a series of contracts of employment, as Mr Drake argued; or a series of contracts for services, as the firm argued.
This is at first glance a somewhat surprising decision, given that each assignment could be ended at any time by either party. As the decision makes clear however, that is not in itself a reason not to find a contract of employment. Mutuality of obligation simply requires a contractual obligation to carry out work in return for the opportunity to earn a wage.