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Employee or worker status – the diagnosis of a doctor

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In Community Based Care Health Ltd v. Narayan UKEAT/0162/18, the Employment Appeal Tribunal (EAT) has characterised a GP as a worker under the Employment Rights Act 1996. The GP was providing services to an NHS provider through a limited company.

Community Based Care Health Ltd (CBCH) started providing the services of NHS GPs from 1992. From 2005 Dr Narayan started working for CBCH providing out-of-hours services. She also continued to do locum GP work through an agency. Dr Narayan worked regular shifts for CBCH on a 12-week rota. There was no obligation to accept work and no obligation on CBCH to provide any. She took holidays when she pleased, after warning CBCH. She was required to perform to nationally set standards.

In 2014, the NHS rolled out a new standard contract for providers of out-of-hours services. It required providers such as CBCH to ensure the doctors providing the services were competent and properly qualified. The NHS required that CBCH satisfied this by providing audits of the work done by the GPs and of the services provided.

From October 2015, on advice from her accountant, Dr Narayan set up a company, RNJ Medical Services Ltd (the company). She did not tell CBCH about the company but gave its bank details and received payments into its account from October 2015 onwards. The company also received payments from her locum work. She accounted for tax and national insurance through the company. Neither she nor the company sent invoices to CBCH.

In November 2016, an issue arose over certain telephone advice Dr Narayan had given. Because of that issue and a later allegation that she had unjustifiably swapped duties without telling CBCH and on short notice, CBCH wrote to her in February 2017 saying it was not offering her further work. Dr Narayan presented claims to the tribunal of unfair dismissal, race and sex discrimination, breach of contract and unpaid holiday pay.

The employment tribunal judge noted key features of Dr Narayan’s role, as follows:

• she had worked regular shifts for around 12 years, but there was no mutuality of obligation;

• she did not need permission to perform work outside CBCH’s activities;

• she provided her own medical equipment;

• she had in place her own indemnity insurance;

• CBCH required her to work personally for it, and she could not send a substitute of her choice;

• she was required to be audited by CBCH to ensure competency and qualifications.

Taking the facts into account, and despite the fact that CBCH paid Dr Narayan through a limited company, the employment judge ruled that Dr Narayan was a worker.

CBCH appealed this decision, arguing that Dr Narayan was self-employed. When the EAT heard the case, the only live issue that would be affected by the EAT’s ruling was the unpaid holiday pay claim. The EAT found the tribunal had not made an error of law on the three appeal grounds that CBCH pursued.

The EAT distinguished the current case from another EAT decision (Suhail v. Herts Urgent Care UKEAT0416/11). In that case, the EAT found the doctor positively marketed his services to whichever provider of medical services might wish to provide him with work. By contrast, Dr Narayan worked regular shifts for one provider over many years.

CBCH also argued that it had unknowingly become a client of the company, and that Dr Narayan could not be a worker once the company became the contracting party. However, the EAT noted the relationship between the parties required that those performing the out-of-hours service must be qualified and approved GPs capable of satisfying strict qualification and performance requirements. A corporate entity could not meet these requirements.

The case is another example of how the tribunals are favouring an interpretation of the facts to protect the individual and uphold worker status rights. The employment tribunals and HM Revenue & Customs continue to approach the question of worker status differently. They place different emphasis on the facts. However, it is likely that the introduction of the off-payroll working rules, otherwise known as IR35, in April 2020 will bring the matter into further focus. The off-payroll working rules will apply to private sector businesses. There will be a continuing focus to drill down on the facts of each case to decide relevant liabilities. Employers should bear in mind the decisions of the employment tribunals once they become responsible for deciding worker status under the off-payroll working changes.