Employee Status

1. Employee Status • Definition of employee • Art 3(1) ERO - "employee" means an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment • Relevant to pursue claims i.e unfair dismissal, redundancy pay

2. Definition of a worker • Art 3(3) "worker" means an individual who has entered into or works under (or, where the employment has ceased, worked under)- • (a) a contract of employment, or • (b) any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer • Relevant to claims for holiday pay, unlawful deductions from wages. Broader definition also applied to discrimination claims.

3. Autoclenz Ltd v Belcher [2010] IRLR 70 • 20 claimants all worked as car valeters. All signed similar contractual documents, which contained statements to the effect that the claimants were self-employed. Were taxed on that basis • Wanted a declaration they were employees and holiday pay. • CA held entitled to find they were employees

4. Autoclenz Ltd v Belcher [2010] IRLR 70 • “It matters not how many times an employer proclaims that he is engaging a man as a self-employed contractor; if he then imposes requirements on that man which are the obligations of an employee and the employee goes along with them, the true nature of the contractual relationship is that of employer and employee.” • “where there is a dispute as to the genuineness of a written term in a contract, the focus of the enquiry must be to discover the actual legal obligations of the parties. To carry out that exercise, the tribunal will have to examine all the relevant evidence. That will, of course, include the written term itself, read in the context of the whole agreement. It will also include evidence of how the parties conducted themselves in practice and what their expectations of each other were.”

5. Community Dental Centres Ltd v Sultan-Darmon [2010] IRLR 1024 • explores the line between “worker” status and someone who is genuinely self-employed. • His contract described as a “licence agreement and contract for service” • “self-employed independent contractor dentist with full clinical freedom and accepting full clinical responsibility”. • Contract defined the hours the claimant was required to provide dental services • Claim for unlawful deductions from wages, must be a worker or employee

6. Decision • EAT held there was an “absence of an obligation to perform services personally”, a key ingredient of “worker” status. • the claimant had a discretion whether to attend at the respondent's premises • EAT - a claimant with the unfettered right to appoint a substitute cannot be a worker