Worker status

Section 230(3)(b) ERA says that an individual will be a ‘worker’ if they work under a contract with the company and have agreed to personally perform some work.

However, they won’t be a worker if they are running their own business and the company is a client or customer of that business. In Sejpal v Rodericks Dental, the EAT has looked at the worker status test and how it applies to a working relationship that is defined in the contractual paperwork as one of self-employment.

The claimant was a dentist. She had a contract with Rodericks which described itself as a ‘contract for services’ and required that she provide a locum - to be agreed by the employer - if she was off for more than two weeks. If she did not do this, then the employer would appoint a locum. After working there for many years, she went on maternity leave. In her absence, one of the sites closed and she was dismissed. She said other dentists were redeployed within the business. She brought discrimination claims. Integral to those claims was her status as a worker, without which she would not be entitled to bring a discrimination claim in the employment tribunal.

The employment tribunal said there was not enough ‘mutuality of obligation’ between the dentist and the company for worker status and the contract between them referred to a contract for services, which denoted self-employment. On appeal, the EAT disagreed. The tribunal had made legal errors. The term ‘contract for services’ did not preclude worker status if the individual is self-employed but not running their own business, of which the employer is a client or customer.

The tribunal had relied too heavily on the written contract, when established Supreme Court case law confirmed that contractual terms can be disregarded if they don’t accurately represent the parties’ genuine intentions. The dentist did not have an ‘unfettered’ right to send a locum - she could not do so until she had been off for 14 days and the replacement had to be agreed by the employer. In reality, she had never sent a locum once in more than 8 years of employment. There was a predominant requirement for personal service. With the first parts of the worker status test met, the EAT sent the case back to the tribunal to consider whether the dentist was running her own business and whether the employer was a client or customer.

This case is a reminder that the courts will scrutinise the reality of the relationship between the parties, and businesses should not be overly reliant on the text of a contract where it does not reflect the real position. The employment tribunal will now deal with the question of whether the dentist was running her own business, of which Rodericks was a customer, to determine whether she can bring her discrimination claim.

If you have any questions relating to worker status, contact Oliver Tasker who will be able to advise. Alternatively, please click here to visit our employment law page.