In Secretary of State for Justice v Windle and Arada the Court of Appeal held that:

  • supplying services on an assignment-by-assignment basis, rather than under an umbrella contract, can indicate a degree of independence and/or a lack of subordination, in the working relationship; and
  • because lack of subordination is a factor that is inconsistent with employee status, this indicates that an individual is not an employee "in the extended sense" for the purposes of the Equality Act 2010 ("EA").

BACKGROUND

To be afforded protection under Part 5 of the EA 2010 an individual must be an"employee". The definition is broader than who would typically be classed as an"employee" and includes those who work under a contract of employment, those who work under an apprenticeship contract and those who work under a contract personally to do work. The latter commonly being referred to as "employees in the extended sense".

FACTS

The claimants, Dr. Windle and Mr. Arada, were professional interpreters who both worked on multiple short-term contracts on a case-by-case base for, amongst others, Her Majesty's Courts and Tribunals Service ("HMCTS"). They claimed race discrimination on the ground that their terms were less generous than those accorded to British Sign Language interpreters. The interpreters claimed that they worked under a contract personally to do work so that they could be afforded protection under the EA.  

During the period Dr. Windle and Mr. Arada worked for HMCTS, HMCTS was under no obligation to offer the claimants work, nor were they under any obligation to accept it when offered. They were paid simply for work done, with no provisions for holiday pay, sick pay or pension. They considered themselves as self-employed and were treated as such for tax purposes. The assignments did have to be completed in person, there was no substitution permitted.

PREVIOUS DECISIONS

The Employment Tribunal ("ET") dismissed their claims and decided that the claimants were not employees of the HMCTS but "self-employed professionals". It considered that in the light of the absence of any obligation on HMCTS to offer assignments or the claimants to accept them, there was no so called "umbrella contract" between the claimants and the Ministry of Justice. Therefore the claimants were not in a relationship of subordination and were not employed under a contract personally to do work.

The Employment Appeal Tribunal ("EAT") allowed the claimants' appeal asserting that the ET had misdirected itself by treating the absence of an umbrella contract as a relevant factor in the assessment of the claimants' employment status. The EAT stated that there was no need to fill the gap between assignments in order to show neither a contract of service nor continuity of service. The EAT noted that the lack of mutuality of obligation is only a relevant factor when deciding if there is an employment contract but not a contract personally to do work.

COURT OF APPEAL DECISION

The Court of Appeal allowed the appeal and restored the decision of the ET to dismiss the claims. It held that whilst the ultimate question must be the nature of the relationship during the period that the work is being done, the absence of mutuality of obligation outside that period may be a relevant factor in establishing the nature of the relationship, even for employment in the extended sense. The absence of an umbrella contract is relevant only if and to the extent that it contributes to the conclusion that the claimant is not in fact in a "subordinate" relationship characteristic of an employee.

COMMENT

  • This case is another piece of the puzzle relevant to the uncertainties relating to an individual's working status. It shows that an ongoing contractual relationship between several assignments is not a necessary requirement to prove employment status, but its absence can be an indication for there being none. This means that those who work on multiple short-term contracts, casual workers, freelance workers and zero hours workers are not necessarily protected by the EA.