Labour & European Law Review Weekly Issue 287 20 September 2012
It is well established in case law that, to be an employee, there has to be “mutuality of obligation” between the parties. In Pulse Healthcare Ltd v Carewatch Care Services Ltd, the Employment Appeal Tribunal (EAT) said that five women carers who were employed to work a certain number of hours each week as part of a roster were obliged to do the work which Carewatch “undertook to offer”.
The five women claimants all worked as part of a team of carers for a severely disabled woman known as VF, providing a 24-hour critical care package.
The Primary Care Trust (PCT) assigned the package to Carewatch in 2003 as part of a transfer under the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) from an earlier provider. It issued the women with zero hours contracts, stating that the company had no obligation to provide them with work and that they could work for another employer when “unassigned to Carewatch”.
The PCT then terminated the contract with Carewatch in December 2010 and entered into a contract with Pulse Healthcare, also governed by TUPE. The women argued that, as they were Carewatch employees, their employment automatically transferred over to Pulse.
Pulse argued, among other things, that they were not employees of Carewatch as there was no mutuality of obligation (when the employer has to offer work and the employee has to accept it) between the parties.
The employment judge, however, found that the women had “sufficient mutuality” to be employees as they were required to do the work offered to them and Carewatch was required to provide the work.
The zero hours contract that the carers had signed did not reflect the “true position”, as in reality the women had worked fixed hours on a regular basis over a number of years.
The tribunal pointed out that they were also subject to the control and discipline of Carewatch; they had to provide personal services; they were provided with uniforms and equipment; they were paid on a PAYE basis; they had all worked regularly over a number of years and had only taken time off for holidays, sickness and when suspended for which they received payment.
The EAT said the employment judge was entirely justified in saying that the zero hours contract agreement did not reflect the true agreement between the parties.
It was clear that the women were employed to work a certain number of hours each week as part of a roster in relation to the critical care package for VF and were obliged to carry out the work offered to them, which Carewatch “undertook to offer”.
The fact that the women could object to those hours did not mean there was no mutuality of obligation. If they did object, Carewatch could decide whether to instruct them to do the work and if they refused, they would be in breach of contract. “The mere fact that an employee can object to rostered hours if there is a problem does not mean there is no mutuality of employment”.
Carewatch was providing a critical care package of the most challenging kind and the women were part of an established team of carers. “It is fanciful” concluded the EAT “to suppose that Carewatch relied on ad hoc arrangements in the provision of such a package”.
Having decided that the women were employees, the EAT remitted the issue of whether they had transferred over to Pulse under TUPE to an employment tribunal.
When the Supreme Court ruling in the case of Autoclenz Ltd v Belcher (weekly LELR 229 and 233) was delivered, we said it represented “a sea change which will assist all claimant employment lawyers in attempting to assert the rights of those whose employers try to claim they are self employed when clearly they are not. It will enable employment tribunals to assess the reality of the employment relationship and it provides a clear framework in which to decide whether an individual is an employee.”
The five women claimants in the Carewatch case have demonstrated once again just how important the Autoclenz case has been in giving tribunals the confidence to look behind the wording of contracts designed to defeat employment rights, and make findings as to the true nature of the employment relationship between the parties.