Dr Mark Ter-Berg v Parul Malde & Anor

A limited right to provide a substitute only when the individual is unable to work will ordinarily support, rather than defeat, an obligation of personal service. The guidance in Pimlico Plumbers supplies examples, not rigid legal categories. Other features must clearly and strongly point away from personal service before that conclusion is displaced.

Findings that a contract does not meet the requirements for employee status do not automatically preclude worker status under section 230(3) of the Employment Rights Act 1996. The worker inquiry has a lower threshold. Control and the parties’ description of their relationship may be relevant, but must be evaluated in the distinct statutory context. The client-or-customer limb requires an assessment of all relevant circumstances.

The claimant, a dentist, sold his dental-practice business to a company and thereafter provided services under an Associate Agreement. He claimed protected-disclosure and holiday-pay rights, alleging that he was an employee or, alternatively, a worker.

Earlier tribunal decisions determined only employee status. The tribunal later held that the claimant was not a worker, principally because findings concerning control, mutuality and the parties’ intention in the employee-status decisions were said to make a contrary conclusion inconsistent. It also held that a contractual locum clause meant that personal service was absent.

The appeal concerned whether those conclusions correctly applied section 230(3) of the Employment Rights Act 1996, and whether the worker issue should be decided or remitted.

1. Appeal allowed. The tribunal’s decision that the claimant was not a worker was quashed. The issue was remitted for determination afresh by a different employment judge.

2. Clause 36 permitted a locum only where the claimant failed, through ill health or a similar unchosen cause, to use the facilities continuously for more than 20 days. It was therefore a limited substitution clause of the type which ordinarily points towards personal performance. The examples in Pimlico Plumbers are guidance, not rigid categories. The parties’ intention that the claimant should not be an employee, and the finding of insufficient control for employee status, did not cast light on the specific personal-service issue. No other feature pointed against personal service. The only correct conclusion on the facts found was that the requirement in section 230(3)(b) of the Employment Rights Act 1996 was met.

3. A tribunal is bound by an earlier decision between the same parties only as to findings essential to the earlier issue. The additional reasoning in the prior employee-status decision was not essential to its conclusion. More fundamentally, failure to satisfy the employee-status test in Ready Mixed Concrete does not necessarily defeat worker status. Although the nature of the personal-service requirement is the same, the control required for employee status is not the statutory test for worker status. Worker status has the lower pass mark identified in Byrne Brothers.

4. The contractual statement that there was no contract of employment, and descriptions of the claimant as self-employed or an independent contractor, did not automatically establish that he was not a worker. Such descriptions are potentially ambiguous. On the facts found, there was no error in declining to treat the agreement as inaccurately recording the parties’ true arrangement; but the agreement did not expressly address worker status.

5. Whether the company was a client or customer of a profession or business undertaking carried on by the claimant remained undecided. That third statutory limb requires an evaluative assessment of all relevant facts and circumstances. As more than one conclusion was possible and the respondents did not consent to determination by this judge in the EAT, the matter was remitted without fresh evidence, with written submissions permitted.

• Employment Appeal Tribunal: appeal allowed. The finding that the claimant was not a worker was quashed and the remaining client-or-customer issue remitted to the employment tribunal.
• Employment Tribunal: Employment Judge Palmer held at a further preliminary hearing that the claimant was not a worker.
• Employment Tribunal: an earlier preliminary decision held that the claimant was not an employee. That decision was not appealed.