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Employment status and the right to substitute

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The EAT has found that the right to appoint a substitute can still be consistent with employee status, notwithstanding the requirement that the work must be personally performed, if such right is only exercised when an employee is unable to work.

In the recent case of Chatfeild-Roberts v. Phillips & Universal Aunts Limited, the claimant was a live-in carer for the first respondent’s uncle having been appointed through the second respondent, an agency which introduced the claimant to the family. The claimant was paid gross, taking care of tax and national insurance herself. When the appointment ended, she brought several claims which meant the ET had to determine whether the claimant was an employee or self-employed. The claimant was initially engaged by the first respondent for six months, but ultimately remained with the first respondent’s uncle for three years. Other carers working through the agency worked on a rota system whereby they would move on every three or four weeks.

The ET concluded that there was both sufficient mutuality of obligation (the obligation on an employer to provide work and the obligation on an individual to accept that work) and control and held that the claimant was an employee. The first respondent appealed the decision on a number of grounds including that there were occasions where the claimant could and would approach the agency without input from the first respondent to arrange a substitute.

The EAT rejected this appeal stating that, as the claimant had only arranged a substitute on her days off each week, for a period of jury service and for very limited periods of paid annual leave, the principle from the Pimlico Plumbers case applied. This was the principle that if the right of substitution is limited to only apply when the contractor is unable to work, then the substitution clause is still compatible with them being an employee.

Comment

The law is clear that a genuine, unfettered right to appoint a substitute is not consistent with employee status as the individual is not being obliged to perform the services themselves. This case, however, highlights that where there is a right of substitution only when a contractor is unable to work, the individual could still be found to be an employee.

There is no one-size-fits-all approach to answering the question of substitution and the reality of the working relationship as well as the wording in the contract will need to be taken into account. Anyone who engages workers they do not consider to be employees should check their contracts regarding the worker’s ability to appoint a substitute. The workers should have a genuine and unfettered right to appoint a substitute in their contracts and this should mirror the reality of the working situation.