Employment status update


by Nathan Roberts

Despite streams of case law on the status of workers and employees, new issues and principles keep emerging. On the horizon is litigation between various app-based companies and their users as to worker status. Litigation has also recently been brought by the Independent Workers Union of Great Britain on behalf of cycle couriers seeking to establish employment or worker status (see https://www.cloisters.com/blogs?view=entry&id=568).

The prospects for this new set of litigation will substantially depend on how bold the courts are prepared to be in adapting employment and worker status to an increasingly fractured employment market.

Two recent appellate decisions give only weak encouragement that the courts are prepared to be so bold.

Human rights arguments – Day v Health Education England

One of the first major efforts at invoking the Human Rights Act 1998 to elevate an individual’s employment status was recently rebuffed by Langstaff J in the EAT this year in Day v Health Education England.

Dr Day was a junior doctor; Health Education England (HEE) was responsible for his training. Mr Day was placed by HEE at a hospital and he subsequently brought a whistleblowing claim against HEE. In order to do so, he had to establish worker status in relation to HEE. It being a whistleblowing claim, he sought to take advantage of the extended definition of a worker in s.43K Employment Rights Act 1996. Section 43K(1)(a) provides that if a person works in the following circumstances then he is a worker for the purposes of whistleblowing protections:

(a) he is not a worker within the meaning of s.230(3) ERA 1996;

(b) he was introduced or supplied to do that work by a third person; and          

(b) the terms on which he was engaged to do the work were in practice substantially determined not by him but by the person for whom he works or worked, by the third person or by both of them.

The employer of such a worker is whoever substantially determined the terms on which he is engaged.

At first instance, HEE had successfully argued that it had not been the organisation that substantially determined the terms of his engagement and so was not the claimant’s employer, regardless of his worker status.

Before the EAT, the two issues were, firstly, whether the claimant was excluded from the s.43K protections because he was already a s.230 worker in respect of the hospital and, secondly, whether he satisfied the definition of a s.43K(1)(a) worker. The claimant relied on art. 10 ECHR to guide the EAT to a purposive interpretation that his relationship with HEE was a protected one.

The EAT declined to construe a favourable interpretation. It found that the statute was clear and the claimant failed to meet its requirements in a number of respects. Whilst art. 10 ECHR did offer some whistleblowing protections, Parliament’s exclusion of trainee doctors in this case was well within the UK’s margin of appreciation. To the extent that this caused a rights lacuna, such a lacuna was deliberate.

This is unlikely to be the end of HRA 1998 arguments. Indeed its use has been threatened but not yet exercised both by the Court of Appeal (Smith v Carillion (JM) Ltd) and the Supreme Court (Bates van Winkelhof v Clyde & Co LLP), in order to elevate the otherwise self-employed to workers, or workers to employees. The principal stumbling block in Day (the specific relationship between a trainee and HEE sitting in apparent contradiction of specific statutory provisions) is unlikely to cause as much trouble in more typical employment status cases.

Permission to appeal has also been sought in Day and it may be that the Court of Appeal looks to be more ambitious.

The case has unsurprisingly attracted substantial public attention (see for example http://www.itv.com/news/2016-05-17/calls-for-change-in-the-law-after-career-of-junior-doctor-destroyed-by-whistleblowing-on-staff-shortages/) and is a good example of novel ways of funding litigation where there is a large group interest in its outcome. To date, 1,500 members of the public have contributed to the claimant’s crowdfunded legal fees to the tune of over £42,000.

Mutuality of obligation – Windle v Secretary of State for Justice

A more well-trodden employment status issue is mutuality of obligations. Is it needed? For what? And what does it look like?

This issue has recently been revisited in Windle v Secretary of State for Justice, a decision on which Adam Ohringer has commented.

The claimants in Windle sought to establish they were employees within the meaning of s.83(2)(a) Equality Act 2010. This employment test is often considered to be the same as the “worker” test in s.230 ERA 1996 and was treated as such in this case.

The EAT had found that the ET had wrongly taken into account an irrelevant factor when determining worker status, that factor being “the absence of mutuality of obligations”. By “mutuality of obligations”, the EAT meant “umbrella” mutuality (i.e. an obligation on the putative employer and employee to provide and accept work respectively).

The Court of Appeal disagreed, upholding the ET’s initial determination. In its view, the question of umbrella mutuality was plainly a relevant consideration. That being said, the judgment is clear that the factor is not determinative and nor is it part of the “irreducible minimum” of establishing worker status.

Discouragingly for those seeking to draw clear distinctions between “employees” and “workers”, Underhill LJ reinforced his own 2001 EAT judgment Byrne Bros (Formwork) Ltd v Baird (the first major decision on “worker” status) that the tests for the two are essentially the same, save that the “passmark” for establishing worker status is lower.

On the face of it, Windle is not encouraging for individuals seeking to establish worker status. But it is arguably the right decision. The entire legal exercise is one of establishing the nature of the relationship between the parties; any of the parties’ contractual terms may therefore be relevant, including any “umbrella” mutuality terms. An individual who was obliged to work seven hours a day indefinitely and whose putative employer was obliged to provide such work would wish to argue that this was both relevant and highly persuasive in establishing worker status. Had the EAT’s decision been allowed to stand, that individual would presumably have been barred from making that submission.

Looking ahead

As to Langstaff J’s warning in Day that eyes should turn to Parliament for further protections, any optimism should be reserved. A review announced by the coalition government in October 2014 “to clarify and potentially strengthen the employment status of workers” has taken up residence in the long grass. As at March 2016, the government reported that a cross-government working group on the topic was yet (but soon, apparently) to be established.

That being said, junior doctors will be keen to see what becomes of the recent agreement between the BMA and the Department of Health. One of the agreement’s clauses provides: junior doctors “will also be given the ability to raise concerns regarding the work of HEE without detriment, from either the employer or HEE.”

As to the courts, Windle and Day do not give much initial encouragement that they are willing to budge from the relatively high and opaque hurdles currently set for claimants. Windle, however, is at least good authority that lack of umbrella mutuality will not automatically defeat an argument for worker status. And Day provides some indication that the courts might be willing to adopt more generous interpretations of worker and employment status in light of human rights arguments, but that any such interpretation will be at their discretion and within their margin of appreciation.

For now, the courts and Parliament remain in a standoff, which likely means much more litigation to come.

Chris Milsom acts for the claimant in Day. Jason Galbraith-Marten QC and Sarah Fraser Butlin act for the claimants on behalf of the Independent Workers Union of Great Britain.