112: Employment Appeal Tribunal considers whether an individual working on a bank rota basis was an employee

Mutuality of obligation between an employer and employee is one of the key factors which determine employment status. This is particularly difficult to assess where an individual is engaged under a series of individual contracts.

There may be an overarching ‘umbrella’ contract of employment which preserves continuity of employment between those contracts provided there is sufficient mutuality of obligation throughout. In the recent case of Hafal Ltd v Miss Lane-Angell, the Employment Appeal Tribunal (the EAT) overturned an Employment Tribunal’s decision that a volunteer engaged on a bank basis worked under an umbrella contract and therefore had employee status.

Hafal Ltd is a charity which runs a scheme providing vulnerable adults held in police custody with the support of an ‘Appropriate Adult’ (AA). In 2013 Miss Lane-Angell was engaged as an AA on a bank basis. Her letter of appointment stated that she had no guaranteed hours and that the charity would use her services as and when required and if she was available. After an initial vetting period which was unpaid, she received callout payments, holiday entitlement, subsistence and mileage allowance. Miss Lane-Angell would email Hafal her availability, from which a rota was prepared. Once on the rota, she might or might not be called out, depending on demand, but was expected to work if called.

In April 2015, the charity took action to resolve a problem with lack of AA availability. From this date, AAs were required to commit to a minimum availability of ten shifts per month, with a rule that rostered AAs who failed to respond to callouts more than three times would be removed from the rota. In January 2016, Miss Lane-Angell was informed that she would not be offered further work as she had missed more than three calls. She brought a claim for unfair dismissal, and Hafal Ltd disputed that she was an employee.

At a preliminary hearing to establish Miss Lane-Angell’s employment status, the Employment Tribunal held that she was an employee. This was based on its findings that once availability had been given, there was an expectation and an intention that AAs would work. When work was offered, there was an obligation on Miss Lane-Angell to accept that work and there was a three-strike sanction if work was not accepted. This mutuality of obligation created an overarching contract of employment. Miss Lane-Angell was also subject to rigorous supervision on how to undertake the work; and she was not in any sense running her own business.

The EAT overturned this decision, finding that the Employment Tribunal had failed to take account of the terms of the appointment letter which clearly stated that there was no requirement for Miss Lane-Angell to be available for work. Mutuality of obligation only existed once she had indicated that she was available and was on the rota. There was no obligation between rotas. The EAT rejected the argument that the three strike rule implied mutuality of obligation, since this rule only applied to AAs who had expressed their availability and been placed on the rota, and did not apply at any other time. It also noted that an expectation that the charity would provide work was not the same as an obligation to do so. The EAT concluded that there was no overarching employment contract and that therefore Miss Lane-Angell was not an employee.

This case highlights the importance of mutuality of obligation in assessing the employment status of individuals who work on a bank basis. An obligation to work once on a rota will not usually create sufficient mutuality of obligation to create an overarching umbrella contract in between assignments. Although Tribunals will look beyond the contractual documentation in order to establish the reality of a working relationship, in this case the Tribunal had ignored the clear terms of the appointment letter that the charity was not obliged to offer a minimum amount of work, and Miss Lane-Angell was not required to be available.