Employment Judge PriceIn person for claimantIn person for respondentDate 29 January 2025
JUDGMENT
[1]The claim for unpaid wages is dismissed. Approved by
REASONS
[1]These are the reasons of the tribunal that were provided orally on 29 January 2025 and are now provided in writing following a request from the respondent. Claims and Issues[2]The claimant brought a claim for unpaid wages. In the ET3 the respondent stated that the claimant was a self-employed contractor and was not employed by the respondent in any event, she was engaged by Ms Morah acting in a personal capacity. Case Number: 3313418/2023 2[3]The Employment Tribunal only has jurisdiction to hear claims from individuals who are categorised under section 230A Employment Rights Act 1996 as either employees or workers. The issue for me to determine was whether or not the claimant was an employee or a worker for the purposes of s.230 ERA, in respect of a claim for unlawful deduction of wages, or for a breach of contract claim.
Findings of fact
[4]This is a claim for wages owed against an LLP. Unusually, perhaps, there is no dispute that some work was done and that a payment is owed, although the amount owing is not clear and has not been agreed upon. However, there is a dispute as to whether the claimant was employed by the LLP when she did this work or if this was a personal agreement between the claimant and a partner of the property.[5]In summary, there are many agreed facts. The claimant contacted an individual called Ms Morah via WhatsApp after hearing through a third party that she needed a cleaner. The claimant was at this stage already working for a cleaning company on an ad-hoc basis called JB Cleaning. Part of her role for JB cleaning was to find or refer new clients.[6]The claimant and Ms Morah discussed the job over the phone. The claimant was asked about her qualifications, and she was given details of the job, including cleaning three properties. Various messages were then exchanged between the two individuals, which amounted to 14 pages in total. The content of the messages were primarily about the work done.[7]As agreed with Ms Morah, the claimant cleaned a properly in Harlesden on or between 23 and 27 August 2023. Ms Morah was moving out of this property. She then moved to a property in White City, and the claimant was tasked with cleaning the new property as well. Ms Morah transported her between the two and asked her to help remove some last artefacts, such as plates, from the kitchen.[8]Ms Morah asked the claimant to fill in an app to record the time she spent working on the properties. She was also asked to submit an estimate of the time she would spend cleaning the three properties before undertaking the work. She duly did this. Ms Morah and the claimant discussed a more long-term engagement. Case Number: 3313418/2023 3[9]Later that week, the claimant undertook additional cleaning work for another property owned by Ms Morah in Chelsea. However, this was not done to Ms Morah’s satisfaction. She received complaints regarding the cleanliness and had to attend to it herself once more.[10]The claimant accepts that she herself suggested her rate of pay. She also said that she would bring someone else to clean with her, Ms. Morah did not take issue with that.
The law
[11]Section 230(3) of the Employment Rights Act 1996 (ERA) defines a ‘worker’ as an individual who has entered into or works under (or, where the employment has ceased, worked under): - a contract of employment (‘limb (a)’), or - any other contract, whether express or implied and (if 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 (‘limb (b)’). For the purposes of this definition, a contract of employment is defined as ‘a contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing’ — S.230(2) ERA.[12]There is no statutory definition of ‘contract of service’ for the purposes of s230(3)(b) ERA and the definition of ‘worker’ must be determined by reference to the statutory definition and the caselaw. This definition concerns the dividing line between those who are truly self-employed, carrying on a profession or business undertaking on their own account and entering into contracts with clients or customers to provide work or services for them, and those who, while self-employed, in fact provide their services as part of a profession or business undertaking carried on by someone else.[13]In Uber BV and ors v Aslam and ors 2021 ICR 657, the Supreme Court has confirmed that the question of whether work is performed by an individual as a worker or as an independent contractor is to be regarded as a matter of statutory, rather than contractual, interpretation. In Uber v Aslam and others 2021 the Supreme Court described the effect of the different definitions and how there are three distinct statuses, namely employees, the self-employed and the intermediate status of worker as follows: Case Number: 3313418/2023 4 “The effect of these definitions… is that employment law distinguishes between three types of people: those employed under a contract of employment; those self-employed people who are in business on their own account and undertake work for their clients or customers; and an intermediate class of workers who are self- employed but who provide their services as part of a profession or business undertaking carried on by someone else. Some statutory rights, such as the right not to be unfairly dismissed, are limited to those employed under a contract of employment; but other rights, including those claimed in these proceedings, apply to all ‘workers’.”[14]It is well understood and accepted that tax treatment is a different issue from employment status, and one does not determine one from the other. In taxation law, one is either employed or self-employed, and the intermediate status of a worker is not recognised.[15]To meet the statutory definitions under s230 ERA the following are necessary:a. There must be a contract, whether express or implied, and, if express, whether written or oral.b. That contract must provide for the individual to carry out personal services.c. Those services must be for the benefit of another party to the contract who must not be a client or customer of the individual’s profession or business undertaking.[16]On personal service, the requirement was made clear in Express and Echo Publications Ltd v Tanton [1999] IRLR 367. In that case, the contract provided that, if the worker was unable or unwilling to do the work personally, he had to provide a substitute. The Court of Appeal held that the power to send a substitute meant that this could not be a contract of employment. The irreducible minimum of a contract of employment was an obligation on the worker to provide his services personally.[17]Where there is a power to send a substitute only where the worker is unable to do the work, the obligation to undertake work personally does not necessarily cease to exist. Pimlico Plumbers Ltd v Smith [2017] EWCA Civ 51, sets out some general principles relating to the right of substitution, emphasising the need to examine the wording of the contract and the underlying reality of the situation:a. An unfettered right to substitute another person to do the work or perform the services is inconsistent with an undertaking to do so personally. Case Number: 3313418/2023 5b. A conditional right to substitute another person may or may not be inconsistent with personal performance depending upon the conditionality. It will depend on the precise contractual arrangements and, in particular, the nature and degree of any fetter on a right of substitution or, using different language, the extent to which the right of substitution is limited or occasional.c. A right of substitution only when the contractor is unable to carry out the work will, subject to any exceptional facts, be consistent with personal performance.d. A right of substitution limited only by the need to show that the substitute is as qualified as the contractor to do the work, whether or not that entails a particular procedure, will, subject to any exceptional facts, be inconsistent with personal performance.e. A right to substitute only with the consent of another person who has an absolute and unqualified discretion to withhold consent will be consistent with personal performance.[18]The final part of the definition of limb (b) workers is usually referred to as the ‘client or customer’ exception. In Byrne Brothers (Formwork) Ltd v Bair [2002] ICR 667, the EAT gave guidance on this. It held the intention was to create an “intermediate class of protected worker” made up of individuals who were not employees, but equally could not be regarded as carrying on a business. The “essence of the intended distinction [created by the exception] must be between, on the one hand, workers whose degree of dependence is essentially the same as that of employees and, on the other, contractors who have a sufficiently arm’s-length and independent position to be treated as being able to look after themselves”.
Conclusions
[19]The claimant provided a service in exchange for an agreed sum of renumeration. She is therefore owed payment. The issue I have to decide is who owes her this money. If she was employed by the respondent then the claim succeeds.[20]I find the claimant was not an employee or a limb b worker.[21]The first issue is whether or not there was a contract between the claimant and respondent. I have found there was an agreement that the Claimant would work for the Ms Morah at an agreed rate of pay. This was verbal and the terms of Case Number: 3313418/2023 6 that contract were minimal, but one did exist. Except for WhatsApp’s messages, there was no written documentation about the agreement between Ms Morah and the claimant. Although the lack of written documentation is not determinative of the issue in any way.[22]There was a discussion about the potential for employment and the claimant stated that she wanted to be employed. Ms Morah responded that this may not be beneficial for the claimant as she was already empty by another company.[23]The agreement between the Claimant and Ms Morah only related to the rate of pay, which was set by the Claimant and the work to be done. It was the claimant who chose how much she was to charge for the work done.[24]It was clear that had she sent along someone else to do the work, which she indicated she might do, the respondent would not have had any difficulty with this. Therefore, I have concluded that although in practice the claimant did carry out the work personally this was not a requirement of the agreement.[25]It is clear from the WhatsApp messages I have been provided that the claimant held herself out as someone who does multiple cleaning jobs. Further, Ms Morah had some issues with the claimant’s work at her Chelsea property. She raised this by message, and the claimant responded, “I understand. I value your business.” This suggests that at the time, the claimant saw the relationship as one of a business and customer rather than employer and employee.[26]The time sheet submitted by the claimant was in advance of the work suggesting the hours she would do it. It was not submitted after the work was done. It is significant that the claimant was allowed to suggest her own hours as to when the work is done.[27]The claimant provided evidence that cleaning products were left in the property which she used. Ms Morah states that she did not provide them; they must have been left by the tenants who were moving out. I accept Ms Morah’s evidence that she did not place the cleaning products in the flat. Indeed, it is not the claimant’s evidence that Ms Morah handed her cleaning products or informed her about them; rather, they were simply present, and she used them. On this basis, I do not accept that Ms Morah provided equipment for the role to any significant extent. Had the cleaning products not been available, presumably, the claimant would have had to go and source them herself. Case Number: 3313418/2023 7[28]Given the autonomy granted to the claimant, who determined her own hourly rate and hours, along with the lack of mutual obligation—considering that the claimant could have brought someone else to perform the work and Ms Morah did not express any concerns regarding this substitution—I find that the claimant was not an employee or a lib b worker, and the claim is dismissed.[29]Had I had to go on to make findings I would have concluded that the claimant was engaged personally by Ms. Morah to complete specific cleaning tasks for her as there was no evidence that Ms. Morah acted as an agent in any capacity on behalf of the respondent when she engaged the claimant. For these reasons, this claim fails.[30]However, I make it clear to both parties that a sum of money is owed.Ms Morah agrees. I hope the claimant and Ms. Morah can reach an agreement without the need for further litigation. Approved by