In another important decision about an individual’s employment status, the Court of Appeal has held in Nursing and Midwifery Council (NMC) v Somerville that an “irreducible minimum of obligation” (an obligation on a worker to accept and perform a minimum amount of work) was not a prerequisite for establishing worker status.
Mr Somerville was appointed to act as a panel member and chair of the NMC’s Fitness to Practise Committee in 2012 for a four-year term, and again in 2016, for which he was paid a fixed fee. The agreement governing the arrangement stated that although he was required to attend hearings of the panel “from time to time”, the NMC had no obligation to offer him work, nor was he obliged to accept any offers (known as mutuality of obligation). Even if he accepted an invitation to attend, he had the right to withdraw without being penalised. The agreement expressly stated that he was an independent contractor and not an employee.
In July 2018, Mr Somerville lodged a tribunal claim for unpaid holiday pay under the Working Time Regulations (WTR). As this required him to show that he was an employee or a worker as opposed to an independent contractor under regulation 2, a preliminary hearing was held to decide his employment status.
Tribunal and EAT decisions
The tribunal found that although there was an overarching contract between the parties and a series of individual contracts when Mr Somerville agreed to sit on a panel hearing, neither of them amounted to a contract of employment. In relation to the overarching contract, the tribunal found that there was no obligation on the NMC to ask Mr Somerville to provide his services, nor on him to accept them.
As regards the individual contracts when Mr Somerville accepted an offer of an assignment, the tribunal found that while he provided his services personally, they did not amount to a contract of employment because he could withdraw from them without sanction. Nevertheless, the tribunal held that he was a worker since there was a contract between the parties under which Mr Somerville personally performed services. Furthermore, he was sufficiently integrated into NMC’s operations such that the NMC was not a client or customer of his. The fact that there was an absence of mutual obligations was not incompatible with worker status.
The Council appealed that finding, arguing that there must be an irreducible minimum of obligation, even for worker status. The EAT (weekly LELR 727) dismissed the appeal, holding that an irreducible minimum was not a prerequisite for establishing worker status.
Decision of Court of Appeal
Dismissing the appeal, the Court of Appeal held that, with regard to the test for determining work status under regulation 2 (1) of the WTR, the overarching contract contained obligations on the NMC to provide training and guidance on procedure, which Mr Somerville was required to comply with if he agreed to provide the relevant services to them. As there was no requirement for him to provide personal service, it did not amount to a worker’s contract.
However, the individual contracts required Mr Somerville to provide personal service, and as the NMC was not a client or customer of his that was a sufficient basis to conclude that he was a worker. There was, it confirmed, “no need, and no purpose served, in seeking to introduce the concept of an irreducible minimum of obligation”.
The fact that Mr Somerville could give notice to withdraw from a hearing, even after he indicated he would attend, did not make any difference to that conclusion. When deciding whether a specific agreement to provide services on one particular occasion amounts to a worker's contract, the fact that the parties are not obliged to offer, or accept, any future work was irrelevant.
These conclusions were also consistent with the decision of the Supreme Court in Uber v Aslam (weekly LELR 717) where the issue of mutuality of obligations was considered in terms of determining when the taxi driver was working and not whether there was a worker’s contract.
This case provides some welcome clarification by confirming that there is no requirement for there to be mutuality of obligation in order to establish worker status. Employers cannot therefore argue that the fact that there is no obligation on a worker to provide a minimum amount of work means that they are not workers and can be denied their entitlement to the National Minimum Wage and paid holidays.