The Equality Act 2010 provides protection from discrimination for both employees and those engaged personally to do work. In Windle and Arada v Secretary of State for Justice, the Court of Appeal held that tribunals can 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 (HMCTS) as well as some other providers. 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 brought claims of race discrimination alleging that they were being treated less favourably than British Sign Language interpreters but the first question for the tribunal 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”.
Tribunal and EAT decision
Considering the provisions 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 therefore not employed under a contract of employment. It also held that they were not in a subordinate relationship but instead were self-employed. As such, they fell outside the scope of the Equality Act.
Acknowledging that this was a difficult area of the law, the EAT (weekly LELR 398) held that the tribunal was wrong to take into account a lack of mutuality between assignments when considering whether the claimants were engaged under a contract personally to do work as this was only relevant when considering whether someone was an employee.
The Secretary of State appealed on the basis that the tribunal had not misdirected itself by treating the absence of an umbrella contract as a relevant factor in the assessment of the claimants' employment status.
Decision of Court of Appeal
The Court of Appeal allowed the appeal. Whilst accepting that the ultimate question must be the nature of the relationship when the claimants were carrying out the work, it held that tribunals could still take into account an absence of mutuality of obligation between assignments, not least because it could shed light on the character of the relationship when they were at work.
It considered that it was a “matter of common sense” that someone supplying services on an assignment-by-assignment basis was likely to enjoy a degree of independence which was incompatible with employee status. Whether that factor was relevant or not would depend on the particular facts of the case; but to exclude consideration of it at a preliminary stage ran contrary to the repeated message that tribunals must consider all the circumstances.