Mr M Graysmark v Moving on Care Management Ltd: 2302094/2018

EMPLOYMENT TRIBUNALS

Case No 2302094/2018

Between

Mr M GraysmarkClaimant

Moving on Care Management LtdRespondent

Before

Employment Judge Corrigan

Mr K Potter (instructed by Solicitor) for respondent

Date 18 July 2019

JUDGMENT

[1]The Claimant was not an employee of the Respondent.

[2]The Claimant was a worker.

[3]The claims for unfair dismissal and failure to provide written particulars are therefore dismissed.

[4]The claim for holiday pay proceeds. ................................................

REASONS

For the Judgment sent to the parties on 22 March 2019 provided at the Respondent’s request

Introduction

[1]The Claimant claims unfair dismissal, failure to provide written particulars and holiday pay.

[2]The matter was listed for a Preliminary Hearing to determine the question of employment status. The issues were set out in the Order dated 5 September 2018 and agreed at the outset to be:2.1 Was the Claimant an employee of the Respondent?

2.2 Was the Claimant a worker of the Respondent?

2.3 Was the Claimant an independent contractor?

Hearing

[3]I heard evidence from the Claimant on his own behalf and evidence from Ms Rachel Ledwidge (Director), Mr John Butcher (Senior Outreach Support Worker) and Ms Kirsty Masheter (Manager) on behalf of the Respondent.

[4]There was an agreed bundle of documents. The parties’ representatives made oral submissions and the Respondent’s representative also provided written submissions.

[5]Based on the evidence I heard and the documents before me I found the following facts.

Facts

[6]The Respondent provides support for young people between the ages of 17 and 21 who, for example, have been in care or have been fostered. They are usually placed in the Respondent’s care by social services.

[7]The Claimant was either employed or engaged to provide support work to those young people. The Respondent has employees, including those employed as support workers, who are given employment contracts. In addition the Respondent has additional support workers like the Claimant, who are referred to as bank workers, to help cope with fluctuation in the service.

[8]The Claimant was initially employed/engaged on 12 January 2011. There is an agreement signed at that time, that is referred to as an independent contractor’s agreement (pages 35-42). It says within it that it is not intended to be an employment contract (clause D, page 36). It has a schedule attached to it (page 42) that provides that the Claimant was to be a “support worker as required” for £10 per hour. The intention of this agreement was to avoid establishing mutuality of obligation. It says “The Contractor agrees to provide the services as detailed at Schedule A. Save as specifically agreed and detailed in this contract, the Contractor is not obliged to make its services available. For the avoidance of doubt, both parties declare they do not wish to create or imply any mutuality of obligation whatsoever either during the course of this contract for services or during any period when contract works are not available.” Schedule A stated the Claimant would be a “support worker as required”. Clause 2.2 states there is no obligation to offer ongoing work or ongoing contracts, nor is the contractor obliged to accept such contracts.

[9]There is some obligation on the contractor to devote the time required to provide the works under the contract. It does give flexibility to the contractor in terms of hours (clause 2.4) and expressly says he is not entitled to holiday pay (clause 9). It also says that this agreement is the entire understanding between the parties (page 40). It does say that the Claimant is free to enter into other contracts and the Respondent is not his first priority (clause 12).

[10]The reality though is that this contract did not really suit the needs of the Respondent. Certainly the Respondent attempted to honour it, but Ms Ledwidge felt very constrained by it and would have liked greater control. She particularly felt constrained by the fact that it said that the contractor could choose their own hours. The reality is that the Respondent needed to be able to require more flexible hours from a worker to cover the commitments to both the young people and social services (see for example the emails at page 54 and page 82). The Respondent had a requirement for weekend cover, and requested the Claimant cover weekends a number of times but which the Claimant would not agree to do. The Respondent also needed the Claimant to do a later shift to be able to see a particular young person who worked. Again the Claimant would not agree to do it. Ultimately the need for more flexibility to cover the needs of the business than the Claimant was willing to do led to the decision to end the working arrangement with the Claimant and replace him with someone on an employment contract, so the Respondent could have more control and cover the service as it required (see pp138-148).

[11]There were meetings with the Claimant at which the work that he was doing was discussed. He had a duty rota of tasks that were expected to be done on his shift. There is paperwork attached to the role because of, for example, the obligations to social services. However again Ms Ledwidge felt constrained by the contract in place, and that as a result the Respondent could not deal with issues that arose about the Claimant’s work in the way the Respondent would do with an employee.

[12]Although the contractual document envisages that the contractor is an independent contractor in business on their own account, I do not find that that was the case in respect of the Claimant. Although he did also work as a worker for Families for Children, he was not running his own business.

[13]The Claimant started doing his own tax returns when he began working for the Respondent as he was told to do that and others were doing that. He had not been doing his own tax returns before. On his tax returns he put that he was selfemployed as a support worker from his home address. He set off a substantial amount of expenses against his profits. He could not account for what those expenses were, only saying that his wife had helped him fill in the tax return.

[14]The Claimant’s initial engagement came to an end on 28th March 2013 as a result of the closure of the location where the Claimant worked. The Respondent believes that the formal agreement did not end at that time as there was a possible need for the Claimant to work for the Respondent again in the future. The Claimant agrees that it was mentioned that he may be required again in the future, but he believed that the contract came to an end and began seeking work elsewhere. About 2 months later the Claimant was called by Ms Masheter to be offered work for the Respondent as a bank worker at East Lodge. The Claimant agreed on the basis he did 7 hours a day across 3 days. This was not what the Respondent had wanted. The Respondent had wanted 5 hours a day on different days, to include a Friday. Nevertheless the Respondent agreed to the Claimant’s request.

[15]The Respondent’s belief was that the Claimant continued on the original contract dated January 2011, but this could have been made a lot clearer to him. Nevertheless no other contract or written confirmation was provided and I accept the original contract remained in place.

[16]The Claimant did then perform 21 hours a week over Monday, Wednesday and Thursday for the next 5 years. The exception was holidays and 2 other days, one day when he came back from holiday and the Respondent did not require him (page 85) and the other when the Respondent said they did not need him but offered an alternative day instead (page 52). He was not paid for the day he was not required.

[17]The Claimant referred to himself as a bank worker when informing the office of a particularly long holiday he was taking (Ms Ledwidge’s statement paragraph 13). Mr Butcher who only worked with him in the second period of work recalls him saying he was self-employed and the rights that gave him in respect of choosing hours. The Respondent also referred to the Claimant as a bank worker, initially on their website and also, for example, in the email to the Claimant on page 54 of the Bundle, dated April 2014. I find that email also sets out the Respondent’s understanding of their arrangement in the second period of work which was that as a bank worker he was not guaranteed hours or set days, although they had mostly tried to honour these for consistency for him and the young people.

[18]The Claimant put in timesheets which described him as a worker, continuing in the second period of work. The Claimant completed a holiday sheet, that was entitled “holiday sheet bank” and had a footer saying “Holiday sheet for information only (bank). He was placed on the rota next to his work location instead of being listed with other bank staff, but he is displayed on the organisation structure which is provided to social services as a bank member of staff.

[19]The Claimant did take longer and more holidays than employed staff (he took about 7 weeks a year). Even though permanent employed staff with a certain number of years’ service did have more than the statutory minimum holiday (page 148), the Claimant still had more than them. He did not seek permission for holidays, although he did give ample notice. He took bank holidays which fell on a Monday and he also always took the Christmas period every year, rather than be on the usual staff rota for it. Employed staff had to wait until a certain date before they would know what leave they could have over Christmas, even those with young children and even Ms Ledwidge (the owner) herself. Whereas, for example, on page 189, the Claimant informed the Respondent he would not be working Christmas as late as the 12th December 2013.

[20]The Claimant did receive a discretionary bonus. His holidays were not paid.

[21]Ultimately because he could not be as flexible as the Respondent required the Respondent ended the working arrangement on 19 February 2018 with 4 weeks’ notice to 15 March 2018 (page 105). That letter said he was a bank worker. Although the Claimant says that when the arrangement was terminated he was told that the Respondent still wanted him to come back and be a bank worker from time to time.

[22]I have heard evidence from the Respondent’s witnesses about other attitudes that the Claimant had to the work, which it is argued showed he did not see himself as under the same obligations as employees, but I do not find those aspects to be determinative of his status. Relevant law Employee

Relevant law

[23]Section 230(1) of the Employment Rights Act 1996 defines an employee as: “…an individual who has entered into or works under …a contract of employment”.

[24]Whether or not an individual works under a contract of employment depends on all the circumstances of the agreement but there are three conditions required for a contract to be a contract of employment:24.1 The individual agrees to provide his own work or skill in the performance of a service for the employer in consideration of remuneration;

24.2 He agrees, expressly or impliedly, that in the performance of the service he will be subject to the employer’s control in a sufficient degree to make him an employee of the employer; and

24.3 The other provisions of the contract are consistent with being a contract of service. (Ready Mixed Concrete (SouthEast) Ltd v Minister of Pensions and National Insurance

[1968] 2 QB 497

[25]Tribunals should be alive to the risk that lawyers have drafted substitution clauses and “no obligation” clauses as a matter of form that do not reflect the reality of the relationship. It is the true agreement between the parties and the reality of the obligations which are important, which can be gleaned from all the circumstances. Unrealistic clauses are however to be distinguished from realistic clauses which have not been enforced (Consistent Group Ltd v Kalwak & Others

[2007] IRLR 560

and Autoclenz Ltd v Belcher & Others

[2011] ICR 1157

SC).

[26]The Respondent’s representative referred me to Hafal Ltd v Miss K Lane-Angel (

UKEAT/0107/17

), in particular paragraphs 23 to 36. This makes reference to the case of Stevedoring & Haulage Services Ltd v Fuller

[2001] IRLR 627

and the principle that where a contract expressly excludes mutuality of obligation it is not permissible to imply a contradictory term. Hafal also cites at paragraph 24 an extract from Cotwold Developments Construction Ltd v Williams

[2006] IRLR 181

about the significance of the right to refuse work to mutuality of obligation: “We are concerned that tribunals…may…have misunderstood something further which characterises the application of ‘mutuality of obligation’ in the sense of the wage/work bargain. That is that it does not deprive an overriding contract of such mutual obligations that the employee has the right to refuse work. Nor does it do so when the employer may exercise a choice to withhold work. The focus must be upon whether or not there is some obligation upon an individual to work, and some obligation upon the other party to provide or pay for it.

[27]We also discussed s 212 Employment Rights Act 1996 which provides for breaks between employment contracts to count as part of continuous employment in certain circumstances. However, as I found the arrangement inconsistent with an employment contract when the Claimant was working, this section is not relevant. Worker

[28]A worker is defined in section 230(3) of the Employment Rights Act 1996 and regulation 2 of the Working Time Regulations 1998 as those working under a contract of employment or: “any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual”.

[29]I was referred by the Respondent’s representative to Clyde & Co LLP v Bates van Winkelhof

[2014] UKSC 32

where it was said at paragraphs 39-40: “there is “not a single key to unlock the words of the statute in every case”. There can be no substitute for applying the words of the statute to the facts of the individual case…there is no magic test other than the words of the statute themselves.”

[30]I was also referred to the case of Secretary of State for Justice v Windle

[2016] EWCA Civ 459

and the suggestion that a lack of mutuality of obligation between assignments might indicate a lack of subordination consistent with the other party being no more than a client or customer. I note though that the Supreme Court in Pimlico Plumbers v Smith

[2018] UKSC 29

questions the relevance of mutuality of obligations to the test of worker, though the issue was not ultimately determined in that case. Conclusions Was the Claimant an employee of the Respondent?

Conclusions

[31]It was accepted that the Claimant gave the requisite personal service to be an employee.

[32]I consider that there was mutuality of obligation to a degree, despite the attempts in the contract to exclude this. The contract itself does contain some obligation that the Claimant provide the work set out in that contract, which is to provide the work of a support worker as required, with an obligation to provide the time needed to do that. In addition in 2013 it was agreed that he would be offered work for 3 days a week. That was what the Claimant was to do. The Claimant could take holidays as he chose and there was some flexibility about hours of work. The Respondent could swap the days of work and on a single occasion did not pay for one day when the Claimant was not needed but nevertheless there was some mutuality of obligation.

[33]However, it was also the understanding of the parties, as set out by the Respondent in the emails at pages 54 and 82 and evident in the comments the Claimant made with reference to his rights as a bank worker/self-employed, that he did not have the obligation to work nor the Respondent to provide work as was the case for the Respondent’s employees who clearly had employment contracts. This was particularly so in relation to requests to be flexible around work and to make himself available at other times than the three days he usually worked.

[34]I find that the Respondent had sufficient control over the work, which by its very nature requires the Respondent to have some control to ensure it meets it’s own obligations to the young people and social services. There was a lot of detail about what the Claimant was expected to do and in any event control does not need to be to a high degree. The Respondent did have the requisite control over his tasks to be considered his employer.

[35]I find there were aspects of this relationship that are incompatible with an employment relationship. The Claimant embraced the full opportunity provided by the tax returns to claim a lot of expenses taking advantage of the possibilities that being a worker or self-employed gave him over being an employee. He did not receive paid holiday and he did not see himself as having the constraints around holiday and Christmas that other staff members with employment contracts had. He could do as he liked in relation to holiday and Christmas, simply having to inform the Respondent of his intentions. He took more holiday than those with employment contracts and indeed made reference to the fact that he was a bank worker when doing so.

[36]Taking all the above factors into account I find it was not an employment contract. Was the Claimant a worker of the Respondent?

[37]Certainly the Claimant was a contractor who provided services personally as the Respondent accepts.

[38]I find that the decision in Pimlico Plumbers puts a question mark over whether there even needs to be mutuality of obligation between assignments for there to be a worker contract, however, even if there does, I find there was enough mutuality of obligation for the reasons I have already set out above. In any event the Claimant worked on the same assignment for 3 days a week for 5 years.

[39]He was not in business on his own account with his own clients and customers and there was nothing about this arrangement that would suggest that the Respondent was in the position of a customer of the Claimant’s business. He submitted tax returns because he was advised to do so and although he has taken that opportunity to the full and that is why I do not find him an employee, it is obviously not incompatible with a worker contract that the Claimant puts in his own tax returns. The Claimant described himself as a worker for another organisation, but I do not find that that means he was conducting a business with clients of his own account. He simply worked for two organisations. He was clearly incorporated into the Respondent’s business and systems and was not providing his own independent specialist service to the Respondent as a client.

[40]For the above reasons I find the Claimant was not an employee but he was a worker. ……………………………………….