369: Can a fee-paid panel member be regarded as a worker rather than as self-employed?

The recent case of Nursing and Midwifery Council v Somerville serves as a useful reminder that organisations need to be mindful of the risks when classifying staff as self-employed.

In Nursing and Midwifery Council v Somerville, Mr Somerville was a fee-paid panel member and Chair for the Nursing and Midwifery Council’s Fitness to Practice Committee. Under the terms of his services agreement, he had the status of an independent contractor. As such, the Council was under no obligation to offer him a minimum number of sitting dates; he did not have to accept any dates he was offered; and he could withdraw from any dates he had accepted without giving a reason. Mr Somerville had to provide his services personally and there was no right of substitution in the agreement. In practice, the Council would ask him to provide his available dates over a six month period and then allocate hearings about a month in advance.

Mr Somerville brought a claim for unpaid holiday pay, arguing that he was a worker or an employee for the purposes of the Working Time Regulations 1998.

At the preliminary hearing, the Employment Tribunal held that he was not an employee because there was insufficient mutuality of obligation to give rise to either an overarching employment contract or an employment contract in relation to individual assignments. However, the Tribunal ruled that he did have worker status.

The Employment Appeal Tribunal (EAT), and now the Court of Appeal, have upheld the Tribunal’s decision, ruling that Mr Somerville was a worker, not an employee or an independent contractor. The Court of Appeal rejected the Council’s argument that the Tribunal’s finding of a lack of mutuality of obligation was inconsistent with worker status; there is no requirement for an individual to be offered and to accept a minimum amount of work in order to be a worker. Mr Somerville was obliged to provide his services personally under the terms of an overarching agreement, and was not a client or customer of the Council. On each individual occasion he provided work, there was a separate contract under which he was a worker, subject to the Council’s standards and requirements. Following the decision on Mr Somerville’s employment status, his case will now return to the Tribunal to decide whether he is entitled to holiday pay.

This judgment confirms that an individual who is providing services on an irregular basis, with no obligation to do a minimum amount of work, or to accept work when it is offered, can still be considered a worker. This is another decision highlighting the risks of classifying staff as self-employed. Organisations who engage panel members or casual workers under overarching contracts on a similar basis should assess the risks of potential challenges to employment status, particularly bearing in mind that tribunals will look at the substance of a relationship rather than the label attached to it in contractual documentation.

For further advice about your particular circumstances please do contact us.