Plastering Contractors Stanmore Ltd v Holden

A person may be a limb (b) worker during individual assignments even though neither party is obliged to offer or accept work between them. The absence of an umbrella contract does not prevent worker status while work is performed under a contract for payment.

The statutory inquiry remains whether the individual undertakes personal service for a party who is not a client or customer of the individual’s business. A limited and conditional possibility of substitution is compatible with personal service. Integration into the engager’s workforce, and the absence of active marketing to the world at large, may assist the client-or-customer assessment but must not replace the statutory wording.

The claimant had worked almost exclusively for the appellant plastering company for many years as a labour-only subcontractor. He was paid through the construction industry scheme. There was no obligation on the company to offer work, nor on him to accept it, between assignments.

An Employment Judge held that he was a worker for the purposes of the Working Time Regulations 1998 and the Employment Rights Act 1996. The company appealed, contending that the absence of continuing mutual obligations, the possibility of substitution, insufficient control, and insufficient integration prevented worker status.

The central issue was whether the Employment Judge had erred in law in finding limb (b) worker status.

1. Appeal dismissed. The Employment Judge made no error of law in holding that the claimant was a worker.

2. The limb (b) definition requires a contract to perform work or services, an obligation of personal performance, and a relationship in which the other party is not the client or customer of a profession or business carried on by the individual. The concept of mutuality is not itself part of the statutory definition.

3. Mutuality is relevant first to whether a contract exists. An umbrella contract requires obligations, beyond individual assignments, to offer and undertake work. Where there is instead a series of contracts for individual assignments, the necessary obligations exist while each assignment is worked. The lack of obligations between engagements therefore did not preclude worker status during the periods when the claimant worked for the company. This approach accorded with James v Redcats (Brands) Ltd [2007] IRLR 296 and the protective purpose of the Working Time Regulations 1998.

4. The Employment Judge was entitled to find personal service. There was no express substitution term and no substitution in practice. Any possible substitute required the company’s approval, a construction industry card and health-and-safety induction. Such a tightly limited possibility was not inconsistent with personal performance.

5. Control was relevant to, but not a separate requirement for, the client-or-customer inquiry. The claimant worked within a workforce under a site supervisor’s instructions. The Employment Judge also permissibly treated his long-term integration, use of the company’s clothing and vehicles, and absence of marketing to the public as supporting the conclusion that the company was not his client or customer. The integration approach in Cotswold Developments Construction Ltd v Williams [2006] IRLR 181 was helpful but did not supplant the statutory test.

6. The case was remitted for the parties to arrange a further remedy hearing if they could not settle the outstanding issues.

• Employment Appeal Tribunal: Appeal dismissed. The finding that the claimant was a worker was upheld, and outstanding remedy issues were remitted for a further hearing if required.
• Employment Tribunal: Employment Judge Bedeau, judgment dated 5 November 2013, held that the claimant was a worker under the Working Time Regulations 1998 and the Employment Rights Act 1996.