Employment Status:

Is the right to use a substitute consistent with being an Employee?

Many of the statutory protections that apply to employees do not apply to the category of ‘workers’ with the self-employed being the least protected of all. It is therefore often very important to be able to decide to which category a person belongs when considered their legal status.

Personal Service

The provision of personal service (that the individual himself or herself is providing the work) is one of the key elements in being an employee rather than being self-employed and in business on one’s own account. It has traditionally been the case that the right to use a substitute can therefore be inconsistent with employee status but the Employment Appeal Tribunal (EAT) has held in Chatfeild-Roberts v Phillips and Universal Aunts Limited (picking up on previous case law) that even if the terms of the contract include a right to use a substitute, that can still be consistent with employee status.

In the case the Claimant was a live-in carer. She worked for the First Respondent looking after his uncle who was described as “an irascible old man”! The Second Respondent to the claim was the agency who introduced the Claimant to the family.

The Claimant worked for the First Respondent for 3 years and she was paid gross and took care of her own tax and national insurance affairs. Following the end of the arrangement she brought a number of claims against the Respondents and one of the issues was whether or not the Claimant was an employee or self-employed?

The Employment Tribunal held she was self-employed notwithstanding the fact that there was a substitution clause. On the facts the Tribunal found there were sufficient mutuality of obligation between the parties and sufficient control for there to be an employment relationship. The Claimant had approached the Second Respondent (the agency) to arrange a substitute for herself when she was not available rather than providing a substitute directly for herself. The Respondent appealed the Tribunal decision.

The EAT considered the question of substitution, amongst other matters. The substitution had only occurred on her days off each week for a period of jury service and for periods of annual leave. Following the principle in the recently reported Pimlico Plumbers case the EAT held the right of substitution only when a contractor is unable to work can still be consistent with personal performance and so with employee status.

Motor Industry Legal Services

Motor Industry Legal Services (MILS Solicitors) provides fully comprehensive legal advice and representation to UK motor retailers for one annual fee. It is the only law firm in the UK which specialises in motor law and motor trade law. MILS currently advises over 1,000 individual businesses within the sector as well as the Retail Motor Industry Federation (RMI) and its members.