In this case, the EAT upheld an appeal against an employment tribunal's decision that a nurse who was purportedly engaged as a self-employed contractor was in fact an employee and a worker.
Facts
Ms Maclean is a qualified nurse who worked for the Partnership of East London Co-Operatives Ltd (PELC) as a clinical streamer at its urgent treatment centres, where she was responsible for triaging patients. PELC's clinical streaming staff included permanent employees, bank staff (who were also employees), and self-employed contractors. Ms Maclean was engaged as a self-employed contractor and paid her via her personal service company.
When she stopped working for PELC, in March 2023, Ms Maclean sought to bring claims for unfair dismissal, whistleblowing detriment, and holiday pay in the employment tribunal. The tribunal concluded at a preliminary hearing that Ms Maclean was both an employee and a worker of PELC and she was therefore entitled to bring those claims. PELC successfully appealed to the EAT.
The EAT held that the tribunal had been entitled to find that the contractual relationship was between PELC and Ms Maclean, rather than her personal service company. This was supported by the wording of a written payment authorisation declaration, in which Ms Maclean: 1) confirmed that payment to her personal service company would discharge any liability owed by PELC to her personally; and 2) referred to the contract governing the working relationship as an agreement between PELC and Ms Maclean herself "as an individual nurse".
However, the EAT considered that the tribunal had erred in concluding that there was sufficient mutuality of obligation between Ms Maclean and PELC to establish employment. The tribunal had found that the express contractual terms did not guarantee Ms Maclean any particular shifts, nor require her to accept any shifts offered. In practice, Ms Maclean would apply for shifts she wanted to work, but she was not guaranteed to be allocated those shifts. Once she was allocated particular shifts for which she had applied, she was committed to working them. In the EAT's view, these findings were not sufficient to support the tribunal's conclusion that PELC agreed to offer and pay for, and Ms Maclean agreed to undertake, at least some reasonable amount of work.
On the question of substitution, the EAT considered that the tribunal's conclusion that it would have been "impracticable" for Ms Maclean to send a substitute to carry out a shift in her place was not adequately reasoned. The EAT acknowledged the tribunal's finding that any substitute would need to be familiar with PELC's operations and pass stringent background and qualification checks. However, as PELC submitted, among its regular employees, bank staff and self-employed contractors, there was a ready pool of qualified nurses that it had already vetted and accepted as suitably qualified so this needed to be considered further.
What does this mean for employers?
This decision serves as a reminder that, when determining questions of employment status, employment tribunals will look at the practical reality of the working arrangements as well as any written contract. Employers should take care to ensure that the contractual documentation is an accurate reflection of the nature of the working relationship.
The greater the limitations placed on the ability of a contractor to send a substitute to carry out their work, the more this points towards a requirement for personal service, and findings of employee or worker status. However, if there is a pool of suitably qualified and approved substitutes to which the contractor could turn, meaning that sending a substitute could be workable in practice, that may help tip the balance towards a finding of self-employment.
