Lack of mutuality
Labour & European Law Review Weekly Issue 398 03 December 2014
The Equality Act 2010 provides protection from discrimination not just for people working under a contract of employment, but also for those engaged personally to do work. In Windle and Arada v Secretary of State for Justice, the Employment Appeal Tribunal (EAT) held that tribunals must not take into account a lack of “mutuality of obligation” when considering whether someone is engaged under a contract to do work personally.
Dr Windle and Mr Arada worked as official interpreters for the Courts and Tribunals Service in England and Wales (HMCTS) as well as a range of other providers including the Crown Prosecution Service.
Their written terms and conditions with HMCTS made clear that it was not obliged to offer them work, nor were they obliged to accept it. In other words, there was no mutuality of obligation. They did not receive holiday pay, sick pay or pension. They considered themselves to be self-employed and were treated as such for tax purposes by HMRC.
However, they could not send a substitute once they accepted an assignment and had to abide by a certain dress code when they appeared in court. They also had to wear a badge stating that they were a “Tribunal Service Interpreter” with a logo, a photograph and a number for security purposes.
Dr Windle and Mr Arada brought claims of race discrimination alleging that they were being treated less favourably than British Sign Language Interpreters in relation to their terms and conditions of service. The first issue to decide was whether they were workers or not.
Section 230(3)(b) of the Employment Rights Act (ERA) covers individuals contracted “to do or perform personally any work or services for another party to the contract” unless that party is a client or customer of a business or profession.
Section 83(2)(a) of the Equality Act 2010 states that “employment” means “employment under a contract of employment, a contract of apprenticeship or a contract personally to do work”.
Considering the terms of the ERA, the tribunal accepted that every time Dr Windle and Mr Arada accepted an assignment offered by HMCTS they entered into a contract personally to do work (as they were not allowed to provide a substitute). However, when they were between assignments, there was no mutuality of obligation and they were not therefore employed under a contract of employment.
It also held that they were not in a subordinate relationship but instead were self employed. They therefore fell outside the scope of the Equality Act and could not proceed with their discrimination claim.
Acknowledging that this was a difficult area of the law, the EAT held that the tribunal was wrong to take into account a lack of mutuality when considering whether Dr Windle and Mr Arada were workers in the sense that they were engaged under a contract personally to do work. This was only relevant when considering whether someone was an employee.
However, it was relevant to look at what they were doing between assignments when trying to decide if they were workers or not. In particular, tribunals needed to look at whether they provided their services “in a position of subordination” and whether they were integrated into HMCTS or whether they were truly independent providers of services with HMCTS being one of their clients or customers.
It remitted the case to the same tribunal to consider these points.
This case sets out the important different legal tests which apply when determining whether an individual is an employee and entitled to claim unfair dismissal and a worker engaged under a contract personally to do work which means they qualify for protection under the Equality Act 2010.