Does the Right to Use a Substitute Rule Out Employee Status?

When engaging individuals, it is always important to ensure that their status is considered at the outset (for example whether they will be employed or self-employed), and that written terms are put in place which reflect the true nature of the relationship in practice.

Chatfeild-Roberts v Phillips & Universal Aunts Limited

Ms Phillips was a live-in carer for Mr Chatfeild-Roberts' uncle for three years, having been introduced to the family for the position by an employment agency. She lived in the uncle's house permanently, save when on leave, and took a two hour break each afternoon. When the arrangement was terminated by Mr Chatfeild-Roberts, she brought a number of claims in the employment tribunal against Mr Chatfeild-Roberts, as well as the agency. To be able to succeed in her claims she needed to show that she was an 'employee'. She succeeded at first instance, and the decision was appealed by Mr Chatfeild-Roberts.

Personal Service

It is established law that personal service is a factor indicative of an employment relationship. This is commonly looked at in the context of whether there is the right to send a substitute to carry out the work. Mr Chatfeild-Roberts paid the agency on an ongoing monthly basis, to ensure that they would provide a substitute when Ms Phillips was not available. Sometimes Ms Phillips would approach the family to arrange a substitute through the agency, and sometimes she would provide a substitute herself. However, although most of the carers on the agency's books worked on a rota basis, Ms Phillips did not. In reality, she only used a substitute when on jury service, on her regular one day off per week and when on holiday. The EAT noted the comments of the Judge in the recent Pimlico Plumbers case, that "a right of substitution only when the contractor is unable to carry out the work will, subject to any exceptional facts, be consistent with personal performance".

Control

The EAT also considered whether there was a sufficient element of control over Ms Phillips to establish an employment relationship. It noted that the fact that the degree of oversight by Mr Chatfeild-Roberts decreased over time did not detract from the tribunal's finding that there was a sufficient level of control indicative of an employment relationship. The EAT gave the example that an employee who over time became trusted to such a degree that their duties were no longer supervised at all would not lose their employment status as a result.

Tax

Whilst Ms Phillips had been responsible for paying her own taxes and national insurance as if she had been self-employed, this was not sufficient to defeat her claim that she was, in fact, an employee. The tribunal took into account all of the circumstances in the case and, on balance, found them to be consistent with a contract of employment.

Best Practice

There have been numerous high profile cases such as those against Uber, Addison Lee and Pimlico Plumbers, which continue to demonstrate that whether or not staff are employees or workers or genuinely self-employed will depend on a range of factors. If asked to determine whether or not an individual is an employee the courts and tribunals will look at all the circumstances of the case, not just the terms of any written contract.

If you have any questions about your employment contracts, please contact Gareth Edwards in our Employment Law team on 0117 314 5220.