26 July 2012 #Employment
In the case of Hospital Medical Group Ltd v Westwood, the Court of Appeal commented on how to decide whether an individual is a "worker" rather than a self-employed contractor.
The Court rejected the Hospital Medical Group’s appeal against the tribunal and EAT decisions that Mr Westwood was in fact a worker, despite operating as a self-employed contractor.
Mr Westwood was engaged at the company’s cosmetic surgery clinics to carry out hair transplant procedures. The parties entered into an agreement which stated that he was a self-employed contractor, and he was paid a fee based on the number of procedures he carried out. Mr Westwood also worked as a GP elsewhere. After the company terminated the agreement, he brought claims for unlawful deductions from wages and accrued holiday pay, claims that can only be brought by an individual with employee or worker status.
The tribunal and the EAT both concluded that Mr Westwood was not an employee. However, they found that Mr Westwood was a worker under the Employment Rights Act 1996.
The Court of Appeal agreed with the EAT’s decision, and referred to the following requirements of a worker as set out in the case of Autoclenz Ltd v Belcher:
On the facts, the first two requirements were not disputed as there was an agreement between the parties which required Mr Westwood to personally carry out the hair transplant procedures. However the third requirement was contested, with Mr Westwood arguing that the company was not his client or customer, as he was not providing his services to the company, but to the company’s clients on its behalf.
The Court agreed with Mr Westwood, holding that although he was in business on his own account, the Employment Rights Act does not specifically exclude such an individual from having worker status. The Court was also persuaded by the fact that the company referred to Mr Westwood as "one of our surgeons” in its marketing material and that he was an integral part of its business, even though he was in business on his own account.
This case highlights the importance for employers of ensuring that they understand the status of the individuals who carry out work for them. It is not enough to simply name an individual as a self-employed contractor and treat them as such; the Tribunal will look behind any agreement and consider the true nature of the relationship when applying the above test for worker status. Although workers have less extensive employment protection rights than employees, they can bring claims for unlawful deduction from wages and for unpaid annual leave, as well as discrimination and whistleblowing claims.