In Airfix Footwear v Cope12, it was held that the worker was an employee because work was provided on a regular basis and in reality the employer decided on the "hows and wheres" of doing the job. In Nethermere v Taverna13, the Court of Appeal held that it was the mutuality of obligation between the employer and the worker, that is the obligation to provide work and to provide skill respectively. Selwyn calls this the irreducible minimum legal requirement for the existence of a contract of employment.
This can be seen in O'Kelly v Trusthouse Forte14, where a casual worker was held to be self-employed because there was no obligation on the employer to provide work and no obligation on the worker to offer his services. While this wasn't the sole deciding factor, it was clearly an important one. In Carmichael and Leese v National Power15, tour guides that were 'casual as required' were again self-employed because the irreducible minimum of mutual obligation had not been satisfied.
In Carmichael the Court of Appeal held that there was an implied term in to contract to provide a reasonable amount of work and for the workers to do a reasonable amount of work. However, the House of Lords overruled the decision because of the absence of mutuality. Adrian Williams argues that the courts have attached a "disproportionate weight to the mutuality of obligation" criterion. He argues any unscrupulous employer could surreptitiously insert an unconditional delegation clause into the contract resulting in the worker not being protected by employee legislation.
He arrives at this conclusion because of the decision of the Court of Appeal in Express & Echo Publications v Tanton16. In that case the worker was a driver whose contract had a clause in which, should he be unable or unwilling to perform the services, he should arrange at his own expense another suitable person. All other factors appear, to me at least and to the EAT, to show that Tanton was an employee. Despite this, the Court of Appeal held that the right to appoint a substitute as "inherently inconsistent" with being an employee.
This case does tend to show a heavy reliance on the "irreducible minimum" of personal service in employment contracts. The EAT distinguished Tanton on the facts in McFarlane v Glasgow City Council17. Gymnastic teachers had the right to arrange a substitute, but only where they were unable to attend. It would not be possible for the instructors to never turn up, as would theoretically be the case in Tanton. A similar result occurred in Bryne Brothers v Baird18, where such a clause was held not to prevent a worker being classed as an employee.
Thus, while McFarlane and Baird have limited the argument, it is still submitted that too much weight is attached to the mutuality of obligation test. However, as Selwyn points out, there is no one single factor that can be by itself conclusive. Thus, in McMeechan v Secretary of State for Employment19, the fact that there was a weekly wage, a power of dismissal and a grievance procedure led the Court to conclude that the worker was an employee. Likewise, in Motorola v Davidson20, the employer had a sufficient degree of day to day control, which made the worker an employee.
All the relevant factors need to be considered, and as long as the employment tribunal takes these into account, their decision will be a question of fact and their finding can not be challenged unless they came to the conclusion which could not be reasonably obtained by any other tribunal. The only thing that is certain is that if there is control, no delegation and a mutuality of obligation the court should find a contract of employment. Going back the original question, it is clear that the tests created by the Courts were inadequate in a modern society.
The courts now tend to look at a multitude of factors in deciding employee status. The most important factor, it seems, will be mutuality of obligations. Adrian Williams concludes his article by suggesting that statutory intervention is necessary. I agree that because of the importance and number of rights an 'employee' will receive, it is paramount that the courts can determine worker status accurately. I find it difficult to see though how a statutory test would advance the position we are in now, the position of painting a picture of all factors and balancing them out.
Employment Law – Deborah Lockton (Palgrave) – 4th Ed Law of Employment – NM Selwyn (Butterworths) – 12th Ed Modern Employment Law – M. Whincup – 9th Ed Harvey of Industrial Relations and Employment Law, A1 "A Critical Appraisal of the Criteria Determining Employee Status" – Adrian Williams, Business Law Review, October 2003, p239 "The Status Tests" – Maugham and Dunn, 28 June 2002 (Employment Law Direct, Butterworths Online)