The Hospital Medical Group Ltd v Westwood

For limb (b) worker status, the client-or-customer exception is not determined simply by asking whether the individual is self-employed or works under a contract for services. The question is whether, under the contract, the putative worker is operating an independent profession or business for the other party as its client or customer. Relevant indicators include whether the individual markets services to the world generally, or instead is recruited to work as an integral part of the principal’s undertaking. A person engaged exclusively to provide specialist services within the principal’s operation, using its premises, equipment and customer base, is likely to fall within limb (b).

Dr Westwood, a general practitioner who also performed hair-restoration surgery, was engaged by the Hospital Medical Group Ltd under a written contract for services. The Employment Tribunal found that he was not an employee under section 230(3)(a) of the Employment Rights Act 1996, but was a worker under section 230(3)(b). It held that the respondent was not his client or customer because it introduced its own patients to him.

The respondent appealed solely against the limb (b) finding, arguing that the Tribunal had treated a self-employed contractor as a worker without properly considering the contract. The central issue was whether the respondent had the status of a client or customer of Dr Westwood’s profession or business.

1. Appeal dismissed. The Employment Tribunal was plainly and unarguably right to conclude that the limb (b) client-or-customer exception did not apply. Dr Westwood was therefore a worker.
2. The statutory distinction is not between an employee and an independent contractor. Limb (b) covers individuals who personally undertake work for another party where that party is not, by virtue of the contract, a client or customer of the individual’s profession or business.
3. The relevant distinction is commonly shown by asking whether the individual actively markets services as an independent person to the world generally, or whether the individual is recruited to work for the principal as an integral part of the principal’s operations.
4. The written Agreement was genuine and reflected the parties’ real relationship. Its description of Dr Westwood as an independent contractor did not determine the statutory question. He provided hair-restoration services exclusively to the respondent, was recruited into its operations, treated patients introduced by it, and used its equipment and premises. That work was separate from his general-practice and other clinic work.
5. The approach in Byrne Brothers (Formwork) Ltd v Baird & Others, Cotswold Developments Construction Ltd v Williams, and James v Redcats (Brands) Ltd reinforced the Tribunal’s conclusion. The observations in Redrow Homes (Yorkshire) Ltd v Wright were not directed to the limb (b) exception. The Supreme Court’s opinion in Autoclenz v Belcher did not bear on the issue.

• Employment Appeal Tribunal: dismissed the respondent’s appeal from the Reserved Judgment of Employment Judge Roper, promulgated with Reasons on 10 March 2011. The finding that Dr Westwood was a worker, but not an employee, was upheld.