The EAT has recently found that, in the situation of an individual working on an assignment by assignment basis, mutuality of obligation sufficient to give rise to a contract of employment might exist even where the assignment could be terminated by either party.

In the case of Drake v Ipsos Mori UK Limited, Mr Drake worked as a market researcher under a succession of individual assignments which ran from February 2005 until November 2010, at which time the company removed him from its panel of interviewers. During his time as a Market Researcher, Mr Drake was free to accept or refuse work offered to him, even halfway through an assignment, and the company was under no obligation to offer him any work. Mr Drake was not provided with any contractual documents although he was provided with handbooks and guidance which set out that he was not an employee of the company as he was working on an “assignment by assignment” basis. However, one handbook also referred to a “verbal contract” being formed when work was offered by the company to its market researchers.

When Mr Drake was removed from Ipsos Mori UK Limited’s panel in 2010 he sought to bring a claim for unfair dismissal. However, as such a claim can only be brought by an employee the Tribunal had to first decide whether he was eligible to bring the claim.

At first instance the Employment Tribunal held that Mr Drake was not an employee of Ipsos Mori UK Limited on the basis that there was no mutuality of obligation either from one assignment to another or during the course of each individual assignment. The Tribunal was particularly influenced by the fact that the assignments could be terminated at any time by either party and, having found a lack of mutuality of obligation, it did not go onto consider any of the other usual tests of employment status such as control or personal service.

On appeal by Mr Drake, the EAT took a different view. The EAT found that there was mutuality of obligation in place at least whilst each assignment was continuing. The fact that the assignment could be brought to an end did not mean that no contract at all was in existence; rather, each assignment amounted to a contract and Mr Drake was engaged in a series of contracts.

However, the EAT stopped short of concluding whether the series of contracts were employment contracts or something else, or how the periods between his assignments should be regarded, in particular whether or not there was an ‘umbrella contract’ covering the periods of inactivity. The case has been remitted back to the Employment Tribunal for fresh consideration and we will keep you updated.

As with all cases on employment status, the devil is in the detail of the facts specific to the particular case. However, the decision of the EAT in this case is a further useful reminder that, when it comes to establishing employment status, all may not be as first appears and the courts will scrutinise the reality of the situation, as demonstrated best in the leading case of Autoclenz v Belcher previously reported on.