In this case, the Court of Appeal decided that a tribunal was right to take the lack of umbrella contract into consideration when deciding if individuals were "under employment" for discrimination purposes.
The two claimants in this case are professional interpreters. Dr Windle is Czech, and Mr Arada was born in Algeria. They both worked for Her Majesty's Courts and Tribunals Service ("HMCTS"), and for other institutions, on an assignment by assignment basis. HMCTS was under no obligation to offer them work and they were not under any obligation to accept work if it was offered. There was no umbrella contract that covered them between assignments. They were paid for work done, with no provision for holiday pay, sick pay or pension. They considered themselves to be self-employed for tax purposes. They brought race discrimination claims against the Secretary of State for Justice. For the claims to go ahead, the interpreters had to show that they were protected by discrimination legislation.
Discrimination law protects those who are in, or applying for, "employment under a contract of employment, a contract of apprenticeship or a contract personally to do work". This catches employees, workers and some individuals who are self-employed. However, a self-employed individual will only be protected if their contract puts them under an obligation to do the work personally (in other words, if they are not permitted to sub-contract or delegate any part of the work or employ staff to do it).
Dr Windle and Mr Arada accepted that they were not employed under a contract of employment, but argued that they were employed under a contract "personally to do work", and so were protected by discrimination legislation.
The question of employment status ended up in the Court of Appeal, which was asked to consider whether the absence of mutuality of obligation between assignments (i.e. the lack of an umbrella contract) should be taken into account as a relevant factor in the assessment of whether an individual is employed "under a contract personally to do work".
The Court of Appeal held that the key issue is the nature of the relationship during the period when work is actually done – i.e. not between assignments. However, this does not mean that the absence of mutuality between assignments may not influence or shed light on the nature of the relationship during the period of the assignment. The Court of Appeal took the view that, supplying services on an assignment-by-assignment basis is more likely to imply a degree of independence or lack of subordination in the relationship while at work which is incompatible with the employment status required for discrimination protection. This may not always be true, since circumstances will be different in every case, but it would be contrary to all the authorities to ignore the question of whether there is mutuality of obligation between assignments.
What does this mean for employers?
Where individuals are self-employed and there is no umbrella contract, it is likely that they will not be protected by discrimination legislation. However, employers should be wary of relying on this: each case will be decided on its specific facts, and the lack of an umbrella contract will be only one of the factors taken into account.
Secretary of State for Justice v Windle and Arada, 12 May 2016