Community Dental Centres Ltd v. Sultan-Darmon

To qualify as a worker under section 230(3) of the Employment Rights Act 1996, an individual must undertake to perform work or services personally. An unfettered right to decide whether to attend and perform the work, or to delegate it to a substitute, is inconsistent with that requirement. A contractual power to appoint a locum is not confined to cases of inability merely because the contract describes the arrangement as absence cover. The court also treated the wider approach in Redrow Homes (Yorkshire) Ltd v Buckborough as obiter and declined to follow it.

A dentist provided services under a self-employed licence agreement with a dental services company. The Employment Tribunal found that he was not an employee but was a worker under section 230(3) of the Employment Rights Act 1996, permitting an unlawful deduction from wages claim.

The company appealed. It argued that the agreement imposed no sufficiently enforceable obligation to provide services personally and that the dentist had an unrestricted right to use a locum. The central issue was whether those contractual arrangements satisfied the statutory requirement of personal performance.

Appeal allowed. The Employment Tribunal’s finding that the dentist was a worker was legally inconsistent with its earlier finding that there was no sufficient mutuality of obligation for an employment contract.

1. Section 230(3) requires a contract under which the individual undertakes to do or perform personally work or services for the other contracting party. Mutuality of obligation is a general requirement of contract law and is relevant to the second limb of the statutory definition.
2. The dentist was entitled to decide whether he was willing to attend and provide dental services. His right not to attend was not limited to circumstances in which he was unable to work. There was therefore no sufficiently enforceable legal obligation to provide services personally.
3. The contractual locum provision gave the dentist an unfettered right to delegate performance. The respondent could appoint a locum if he failed to do so, with the locum acting as his servant or agent and being paid by him. Such a right was inconsistent with an undertaking to perform work or services personally.
4. The Tribunal’s reliance on Redrow Homes (Yorkshire) Ltd v Buckborough was misplaced. The relevant observations concerning a wider obligation to perform services were obiter because the decision had turned on the contractual provision being a sham. The approach in Express and Echo Publications Ltd v Tanton, as applied in Jorzsa v Premier Groundworks and Archer-Hoblin Contractors Ltd v MacGettigal, was preferred and followed.

A declaration was made that the claimant was not a worker within section 230(3).

• Employment Tribunal: found that the claimant was not an employee but was a worker within section 230(3) of the Employment Rights Act 1996.
• Employment Appeal Tribunal: allowed the appeal and declared that the claimant was not a worker within section 230(3).