are you are are you not a worker? It’s a simple enough question, isn’t it?

The difference between employee, self-employed and “worker” – a category somewhere between the two – is a crucial one, given that many employment protection rights depend on employment status – yet there is no single test to establish which is which.
In Hospital Medical Group v Westwood a doctor engaged as a surgeon to undertake hair restoration procedures for a private clinic was dismissed. After dismissal, he made claims for accrued holiday pay, and unpaid wages, to which he would be entitled if he were a “worker”. His contract indicated that he was self-employed and he paid tax and NI on that basis, and indeed he had other two contracts elsewhere for different work neither of which were of any relevance to the question of his employment status with the clinic. The question to be determined was whether he was nevertheless a “worker”, that is working under a contract to carry out services personally (which was not disputed) who provides those services to another who is not a client of his, in a professional context, or a customer of a business undertaking of his.


compulsory retirement at 67 can be justified

Now that there is no default state retirement age, employers who have retained a compulsory retirement age must justify it. Sweden has retained a rule allowing employers to implement compulsory retirement for all workers at 67 – a rule that has been found to be justified by the European Court of Justice in Hörnfeldt v Posten Meddelande AB. The justifications accepted included:

– To reduce the risk of termination of employment in humiliating circumstances for older workers;
– Making it easier for young people to enter the labour market;
– Making it easier for people to work beyond 65 and provide a right, but not an obligation, to work up to 67;
– Allowing for pension schemes to be adjusted to take account of lifetime earnings;
– To allow for adjustments to reflect demographic changes.


more about proposed tribunal changes

Government efforts to streamline, speed up, and cut costs in the tribunal system continue. As part of that, Mr Justice Nicholas Underhill has led a comprehensive review of tribunal rules of procedure. Apart from a very welcome rewrite to render them comprehensible to intelligent laymen and lawyers alike, the headline proposals include:

– The introduction of an early “sift” by an Employment Judge to weed out claims and responses with no reasonable prospect of success and give directions to get cases ready for hearing;
– Removing the system of different preliminary hearings for different issues, and replacing it with a single form of preliminary hearing which can deal with both any procedural matters and with preliminary issues of fact;
– Introducing a power to limit how long parties are allowed to present their evidence and submissions;
– Simplification of the rules for default judgments – and setting them aside;
– New rules on anonymity and restrictive reporting intended to achieve a better balance between open justice/freedom of expression and privacy/effective justice.


more disharmony in the world of classical music

Last month we reported the dispute affecting the London Philharmonic Orchestra concerning what constitutes a philosophical belief. The first of this month’s Court of Appeal cases, Welsh National Opera Ltd v Johnston looks at the interplay of two procedures, following the dismissal of the principal oboist in the Company’s orchestra. By way of background, Mr Johnston had been principal oboist since 1974, but difficulties arose between him and the opera’s musical director, culminating in criticisms of Mr Johnston’s performance.
The Company had both a disciplinary procedure, in a fairly standard form, and a “poor artistic performance” procedure agreed with the Musicians Union which provided for musicians whose performance was giving cause for concern to undergo two individual auditions prior to a decision being made about dismissal. This procedure specifically stated that no notice of dismissal could be given unless a musician had failed both auditions. Rather than follow that procedure, the Company opted to use the standard disciplinary procedure, because the issue identified with Mr Johnston’s performance was related to his ability to perform as part of an ensemble, which was not susceptible to assessment by the type of individual audition contemplated in the procedure. It also opted not to follow the full procedure which provided for a series of oral and written warnings to be given, but proceeded straight to a final hearing, apparently with the intention of reducing the stress on Mr Johnson.


new (or maybe not so new) proposals to "streamline employment law"

In our June newsletter I outlined what changes were to be expected as a result of the Government’s review of employment law. If anything, what has now emerged is an even more diluted version of what was anticipated in the sense that the proposed changes will be the subject of numerous consultations, rather than firm decisions to implement changes. The "fire at will" Beecroft proposals are nowhere to be seen but those which remain are unlikely to provide radical alterations to the existing employment tribunal provisions (except perhaps for the introduction of fees – see our July round-up).
It is clear that Vince Cable has had his way with the BIS press release emphasising that the UK has a lightly regulated, flexible labour market, considered by the OECD to have the third lowest employment protection among 20 OECD countries and 10 emerging countries.
Introducing the changes Mr Cable said
We have been looking across the range of employment laws with a view to making it easier for firms to hire staff while protecting basic labour rights.

Our starting point is that Britain already has very flexible labour markets. That is why well over one million new private sector jobs have been created in the last two years, even when the economy has been flatlining.

But we acknowledge that more can be done to help small companies by reducing the burden of employment tribunals, which we are reforming, and moving to less confrontational dispute resolutions through settlement agreements.
The consultations will cover:


August employment news from abroad

Welcome to the Employment Solutions Blog from Saint Martin de Gurson (a small village between Bordeaux and Bergerac in South West France). As I hope you’ll understand this month’s report is a condensed version of the usual monthly report but I hope that you find some items of interest. 1. what happens if a claimant…


employees do not owe a fiduciary duty to their employers

As we mentioned in last month’s introduction, the Court of Appeal has confirmed that an employee, unlike a director, does not owe a fiduciary duty to his employer, overturning a High Court decision which had found in favour of the affected employer.
A fiduciary duty is the highest standard of care in either equity or law. It demands extreme loyalty to the person to whom the duty is owed – the principal or, in this case, the employer. Someone who is subect to it must not put his personal interests before the duty, and must not profit from his position as a fiduciary, unless the principal consents.
Ranson v Customer Systems plc is the case in point. Mr Ranson was a specialist information technology consultant. His contract required him to keep confidential information which came to his attention in the course of his employment both during and after his employment with the Company. This is really no more than the common law obligation which applies to all contracts of employment (see Faccenda Chicken v Fowler) and is a central tenet of employment law. However the contract said nothing about contacting clients. Mr Ranson decided to set up a competing business and both before and during his notice period he contacted clients about potential work for his new business. As a result, a contract was placed with his new business two days before he left Customer Systems (CS).
CS brought proceedings against him in the High Court claiming breach of a contractual obligation of fidelity (often referred to as a duty of good faith) and a breach of a fiduciary duty of loyalty as a result of meeting with clients of CS with a view to securing their business.
The High Court sided with CS and held that there were breaches of both the contractual duty of fidelity and also a fiduciary duty of loyalty.
The Court of Appeal disagreed.


no time extension for litigant in person

A forensic accountant who had won an earlier victimisation claim against one of her employers on the basis of an unfair reference has had her appeal to the Employment Appeal Tribunal struck out because she filed it outside the 42 day time limit for appealing. Whilst she was not a lawyer, the EAT observed that she had considerable experience of litigation and there was no reason to allow her to appeal out of time against an order striking out tribunal claims which were too unclear for the tribunal to work out what tribunal jurisdiction applied.

Although the judgment of the EAT can be read for entertainment value, there is a serious point to be made. While a lot of what the Claimant had submitted could only be described as "gibberish", the EAT was not prepared to say that there was no possible genuine claim buried amongst the material she had put forward:


“consultant” transferred under TUPE

Freedman gives us an example of the difference between a person being accepted as self-employed for the purposes of tax and national insurance but in fact being an employee. Dr Freedman operated a business as a sole trader, and in 2009 incorporated it as Career Energy Ltd (CEL). A new company, Career Energy Consultancy Services Ltd (CECSL), was formed and 52% of its shares were sold to an investor. As part of the overall transaction, CEL was put into liquidation and its employees, assets and contracts were transferred to CECSL. Dr Freedman then continued to act as Chief Executive under a new service agreement until February 2010 when the investor who controlled the majority shareholding replaced him as Chief Executive. Thereafter Dr Freedman continued as a director and carried out the same duties; however he was described as a consultant and was paid salary and commissions gross against invoices submitted. In October 2010 CECSL went into insolvent liquidation.

An employment tribunal found that there had been no transfer of Dr Freedman’s employment in 2009, that he had ceased to be an employee in February 2010 and so declined to consider a claim for unfair dismissal and accrued holiday, on the ground that it had no jurisdiction to hear the case. The Employment Appeal Tribunal overturned this decision, considering that in focusing on the share transfer, the employment tribunal had failed to take into account the transfer of assets and contracts, and had been wrong to decide that there had been no transfer of his employment. Further, when Dr Freedman became a consultant he had in fact continued to be an employee regardless of the label put on the relationship by the parties.