Dr Mark Ter-Berg v Simply Smile Manor House Ltd & Ors

When employee or worker status is in issue, a tribunal must determine the parties’ true agreement by considering all relevant circumstances under the purposive approach in Autoclenz and Uber. A written agreement remains relevant and may accurately record that agreement, but it cannot be treated as conclusive or as constraining the factual inquiry.

A contractual assertion that no employment relationship is created is void where, objectively, it seeks to exclude statutory protection. It is also ineffective if the other facts establish employment. In a genuine marginal case it may nevertheless form part of the factual matrix.

A substitution clause must be construed as a whole. A right triggered by incapacity through ill health or a similar unchosen cause is not a general right to substitute merely because the individual elects not to work.

The claimant, a dentist, brought an unfair-dismissal claim based on protected disclosure against the first respondent and alleged liability of two of its directors. The Employment Tribunal decided only whether he was an employee. It dismissed that aspect of the claim, holding that the 2013 Associate Agreement and the parties’ intentions showed self-employment.

The agreement contained clause 36, requiring the claimant, if unable through ill health or other cause to use the facilities for more than 20 days, to use best endeavours to arrange an acceptable locum. The tribunal treated that provision as giving a genuine and sufficiently unrestricted substitution right.

On appeal, the claimant challenged the tribunal’s approach to the written agreement, its treatment of a non-employment clause under Employment Rights Act 1996, section 203(1), and its construction of clause 36. The central issue was whether the tribunal’s employee-status decision could stand.

1. Appeal allowed in part. Grounds 1 and 2 failed, but ground 3 succeeded. The tribunal’s decision that the claimant was not an employee was quashed and the issue was remitted to a differently constituted tribunal.

2. Autoclenz, as confirmed and explained in Uber BV v Aslam [2021] UKSC 5, requires a tribunal to ascertain what the parties truly agreed. Where the written terms are said not to reflect reality, it must consider all relevant circumstances and is not confined by ordinary contractual rules such as the signature and parol-evidence rules. The statutory context and the risk that contractual labels may defeat employment protection inform that inquiry.

   The approach does not make written terms irrelevant. A tribunal may begin with them and may conclude that they faithfully record a genuinely informed agreement. The error arises if it treats them as conclusive, or as creating a presumption which limits what the tribunal may find after its wider inquiry. Reading the tribunal’s decision as a whole, it had considered the relevant wider circumstances and had not made that error.

3. Under section 203(1) of the Employment Rights Act 1996, a term is void if, objectively, its object is to exclude or limit statutory employment protection. Further, a label denying employment cannot alter a relationship which otherwise has the legal features of employment. But a non-employment clause is not invariably irrelevant. In a genuine marginal case, where it reflects the parties’ real intentions and does not have that proscribed object, it may be considered within the overall factual matrix. The tribunal had not treated clause 5 as determinative and had not erred in declining to strike it down.

4. The tribunal did err in construing clause 36. Its conclusion that the claimant could arrange a locum simply in order to take a holiday treated “other cause” as an unrestricted elective choice. In context, the clause applied where the claimant had failed to use the facilities through ill health or another similar, unchosen cause. The error contributed to the tribunal’s conclusion that personal service was absent.

5. The remitted tribunal must reconsider clause 36 as a whole and then the overall employee-status question. All other findings and conclusions of the original tribunal are to stand as the starting point. The issue must not be determined by Employment Judge Ord or a panel chaired by him.

• Employment Appeal Tribunal: Appeal allowed on the construction of the substitution clause; the employee-status decision was quashed and remitted to a differently constituted tribunal.
• Employment Tribunal: Determined that the claimant was not an employee and dismissed his unfair-dismissal claim on that basis.