Employee status – what’s in a label?

Employee status – what’s in a label? | Friday 25 June 2021 | 2 min read

The issue of employment status is a muddled, yet essential, issue for organisations and individuals. The distinction between ‘employee’, ‘worker’ and ‘self-employed’ is highly contested, and for good reason; many important legal rights are only available to employees, and an increasing number of statutory rights are available to workers but not those self-employed.

The Supreme Court ruling in Uber BV and ors v Aslam and ors [2021] made all the headlines earlier this year, but the recent judgment of the Employment Appeal Tribunal (EAT) in the case of Nursing and Midwifery Council v Somerville [2021] has also provided some important guidance on this issue.

Nursing and Midwifery Council v Somerville

Mr Somerville was appointed by the Nursing and Midwifery Council (NMC) as a panel chair. He brought a claim against the NMC for holiday pay. At the initial hearing in July 2020, the East London Employment Tribunal (ET) held that the claimant was not an employee as he was under no obligation to accept and perform a minimum amount of work (known as an irreducible minimum of obligation). It did, however, find him to be a ‘worker’ via the series of individual contracts which arose each time he agreed to sit, giving rise to an overarching contract in relation to the provision of his services.

The NMC appealed this decision, arguing that the lack of an irreducible minimum of obligation was inconsistent with ‘worker’ status. This argument was rejected by the EAT, which concluded that an irreducible minimum of obligation was not a prerequisite for ‘worker’ status. It did not accept that the findings in Uber meant that an irreducible minimum of obligation was a requirement for worker status. Instead, it held that:

• There was a contract to perform work or services between the parties at all material times;
• The Claimant had agreed to provide his services personally at each sitting;
• The Claimant provided his services under an overarching agreement; and
• Each of these occasions was the subject of a specific contract between the parties.

Comment

The ruling of the EAT gives further hope to those in the ‘gig economy’ of establishing worker status and the benefits that come with it. It also acts as a warning to employers when classifying individuals as self-employed.