05 September 2012 #Employment
A recent case highlights the pitfalls of engaging casual staff without a written contract.
Determining the employment status of causal workers is often difficult as the term suggests a relationship that is informal between the parties, with limited obligation on both sides. However casual workers will in some instances be considered to be providing their services under contracts of employment, despite working on an ad hoc basis and as such have more rights as employees. This would include the right to not be unfairly dismissed.
Casual workers can be engaged in a number of ways:
On a zero hours contract – the employer does not guarantee to provide work and only pays for the work done;
In considering employment status of a casual worker, one of the key issues will be whether there is “mutuality of obligation” i.e. is there an obligation on the employer to provide work and an obligation on the individual to do that work if provided?
The two questions to often ask to establish mutuality of obligation are:
Mr Drake worked for Ipsos Mori as a market researcher on an ad hoc basis under a succession of individual assignments from 2005 to 2010:
In 2010 Ipsos Mori removed Mr Drake from its panel and he brought a claim for unfair dismissal which can only be brought by an employee who as sufficient continuing service. Mr Drake argued that he was an employee on the basis that each of his individual assignments was a contract of employment, and that there was an over-arching (umbrella) contract that continued even when he was not working, linking the assignments.
Ipsos Mori’s argument was that Mr Drake was not an employee because there was no obligation on the company to provide work to Mr Drake and no obligation on him to do that work if provided i.e. no mutuality of obligation existed within (or between) assignments.
Mr Drake’s argument was that he had to complete each assignment once he accepted it, while Ipsos Mori asserted that this was only a moral obligation because there was no sanction for non completion of the work.
The Employment Tribunal found in favour of Ipsos Mori, deciding that Mr Drake was not an employee as mutuality of obligation did not exist either during each assignment or between assignments and that the assignment could be terminated at any time without being completed.
The EAT upheld Mr Drake’s appeal finding that sufficient mutuality of obligation did exist for there to be an employment relationship and that there had existed a series of successive contracts between the parties. Despite either party being able to terminate the contract at will, the EAT found that this did not mean that there was no contract all.
The EAT remitted the case back to the Employment Tribunal to decide whether Mr Drake was fact, an employee, and whether he had sufficient continuity of service to bring an unfair dismissal claim.
This case is a reminder that casual workers may provide their services under a contract of employment, despite working on an informal basis.