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How is ‘Employment’ defined under the Equality Act 2010?

How is ‘Employment’ defined under the Equality Act 2010?

What is employment under the Equality Act 2010? Adam Ohringer considers the recent judgment of the Court of Appeal in Secretary of State for Justice v Windle [2016] EWCA civ 459

 

It always strikes me as amusing that employment lawyers have such difficulty defining what employment actually is.  Maybe it is like asking a biologist: ‘what is life?’  Most of the time you know it when you see it but then there are difficult cases at the margins.

The case of Secretary of State for Justice v Windle [2016] EWCA civ 459, recently decided by the Court of Appeal, shows just how difficult this issue can be.

The facts

The Claimants were professional foreign language interpreters who were engaged by the respondent on an ad hoc basis to provide interpreting services in courts.  They were ‘booked’ as and when needed.  They were not obliged to accept work and there was no requirement that they be offered work.  In other words, there was no ‘mutuality of obligation’ between assignments.  They were paid for work done but received no employment-related benefits such as holiday pay.  For tax purposes, they considered themselves self-employed.

The Claimants brought claims of race discrimination under Part 5 of the Equality Act 2010 (“the EqA”) alleging that British Sign Language interpreters received better terms. 

The question of whether the Claimants were employees for the purposes of s.83(2) of the EqA was considered at a Preliminary Hearing.  The definition of employment is significantly broader than under the Employment Rights Act 1996 (“the ERA”) and other employment legislation.  s.83(2)(a) of the EqA states:

“Employment” means employment under a contract of employment, a contract of apprenticeship or a contract personally to do work.

It was not suggested that the claimants were engaged under ‘a contract of employment’ but it was argued that they were under ‘a contract personally to do work’.  The Claimants lost before the Employment Tribunal and won in the Employment Appeal Tribunal.  The Respondent took the case to the Court of Appeal.  Its primary argument was that the absence of any mutuality of obligation between assignments (sometimes referred to an ‘umbrella contract’) should be a factor militating against a finding of employment under the EqA.  It relied on the judgment of the Court of Appeal in Quashie v Stringfellows Restaurants Ltd [2013] IRLR 99, although that case was solely concerned with the more limited definition of employment contained in s.230(1) of the ERA.

Underhill LJ, giving the Judgment of the Court, observed that the test for ‘a contract personally to do work’ is the same as the test for ‘workers’ – an intermediate state between employment and true self-employment which gives rise to certain rights such as those under the Working Time Regulations 1998.  He went on to state that the question hinged on the ‘nature of the relationship during the period that the work is done.’  However, he accepted the argument that the nature of the relationship between assignments is also relevant:

"[I]t does not follow that the absence of mutuality of obligation outside that period [of the assignment] may not influence, or shed light on, the character of the relationship within it.  It seems to me a matter of common sense and common experience that the fact that a person supplying services is only doing so on an assignment-by-assignment basis may tend to indicate a degree of independence, or lack of subordination, in the relationship while at work which is incompatible with the employee status even in the extended sense [under the EqA]."

Underhill LJ felt it appropriate to introduce the concept of mutuality of obligation in this way on the basis that the factors relevant to assessing whether a claimant is an employee in the ERA sense or a worker (or employee in the extended EqA sense) are ‘not essentially different’; although he noted that the hurdle for showing worker status is lower.

As the ET had approached the case in this way, taking the absence of mutuality of obligation between assignments into account, its decision was confirmed by the Court.

Analysis

In suggesting that the tests for traditional ‘employment’ status and the ‘extended-employment/worker’ status are broadly the same, although with differing thresholds, Underhill LJ wrongly elides two distinct concepts.  This seems wrong in principle and loses sight of the qualitative difference between the two types of status.

Applying the language of the statute, even without reference to any case law, it should be clear that the test for employees looks at the nature of the contract while, in contrast, the test for workers looks at how the work is performed.

The suggestion that the absence of mutuality of obligation ‘may tend to indicate a degree of independence, or lack of subordination, in the relationship while at work’ is quite concerning.  It supposes that casual workers, or those on zero hour contracts, are in a position of strength when they are often at the mercy of employers and in a significantly more dependent position compared to employees with consistent pay and working hours.

Underhill LJ’s attempt to find a unifying theory risks removing large swathes of the workforce from the protection of workplace rights altogether.

 

Cloisters has significant expertise in advising and representing clients in relation to all aspects of employment law.  Please contact our clerks for further assistance.

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