Determining Employment status: The NHS Dentist Case

Employment status and how it is determined has been an issue that has vexed the courts recently, with cases in both the employment and tax tribunals.

An individual’s employment status determines what type of protections and rights they are entitled to, and establishing status involves the consideration of many different factors.

In this podcast listen to the case of Sejpal v Rodericks Dental Limited, which focuses on the status of a dentist and was heard by the Employment Appeal Tribunal (EAT), tried to offer some clarity on how the tests for employment status should be applied.

Transcript

Ciara 0:04  
employment status and how it's determined have been an issue that's vexed to the courts recently, with cases on the issue now found in both the Employment Tribunal and following the changes to IR35. The tax tribunals as well. The latest instalment search pile versus rather extensive LTD is no different. It's an interesting case that could potentially have ramifications across the dental industry.

Ciara  0:28  
The case itself focuses on S, who started working for a dental practice in 2009. She briefly worked in the Roxette practice before moved to Kensington in 2010. And all was well until December 2018, at which point she started a period of maternity leave. Unfortunately, this was the same month in which the practice announced that site would close as the lease was expiring. Later that month, as found  her contract with the practice had been terminated. But the other colleagues she had worked with were being redeployed, as believed that she had not been redeployed because of her pregnancy, and sought to bring claims against the practice for pregnancy and maternity discrimination. The first in order to bring these claims, S had to show the tribunal that she was a worker. The definition for this is found in Section 233 B of the Employment Rights Act, and is sometimes referred to as a limb B worker. It states that a worker is someone who has entered into or works under any other contract, whereby the individual undertakes to do or perform personally, any work or services for another party to the contract whose status is not that of a client or customer. She was also required to show under the Equality Act, which is the starting point for discrimination claims that she was employed under a contract personally to do work. So both of these areas were addressed, but the tribunals using the same tests, which I'll go into in detail in a minute. When I saw her claim in the employment tribunal, she lost and she was found not to be a worker. And of course, She appealed this decision and took her case to the employment Appeal Tribunal or the EA T. On hearing her case, the EA T decided that the first tribunal had taken an erroneous approach to its analysis of whether she was a worker.

Ciara  2:11  
There were a number of questions that a tribunal will address when determining whether someone's a worker, including what the contract says what controls exist, and if there's mutuality of obligation. Often, it's the facts of a case that will determine the weight that's given to such factors.

Ciara  2:26  
In this case, the key factor revolved around personal service. There was a clause in his contract that stated If S failed to use the facilities, ie she was absent from work for reasons such as ill health or maternity, for more than 14 days in a row, she should use her best endeavours to find a locum who would be acceptable to the practice. The tribunal in the first instance found that there was a clear right for S to bring in a locum to perform her obligations, ie she had an unfettered substitution clause in her contract. And as such, they found that she did not meet the requirements for personal service and therefore could not be a worker. That EAT, however, disagreed with this. The clause did not allow for the appointment of a locum before the 14 day period had elapsed, and there was an express need for the locum that she appointed to be acceptable to the practice. The Tribunal should have properly considered whether the claimant was required to provide some personal service to the practice. And as they found that she was s did therefore pass the personal service test.

Ciara  3:28  
The EAT also found the first tribunal had failed to look at the true nature of the agreement between S and the practice, knowing that they had taken a mistaken approach to their interpretation of the contract. The Tribunal on its review of the wording of the contract had found it to be genuine, and not one that had been constructed in order to create a false impression of SS status. Because of this, the tribunal had given the contract greater weight in its status determination. And this was considered to be the wrong approach, as there is no requirement for the contract to be false or a sham in order to reach a conclusion that it doesn't fully reflect the reality of the working relationship. In addition to the issues with personal service and the contract, the EAT found the tribunal had failed to adequately consider two other key factors, namely, the amount of control the practice had over s or how integrated s was into the business. Both of those factors would have had an impact on the outcome of the status determination. As a result of this incorrect approach taken by the Employment Tribunal s as appeal was successful, and the case has been sent back to a different employment tribunal for the outstanding issues to be heard, and for her status to finally be determined. The type of contract that S has with a dental practice is common across the sector. And so the outcome will have a significant impact on the rights of this particular group of people. The comments made by the judge in this case will also have a significant impact on any future employment status cases, particularly following the comments that suggest personal service may no longer need to be the predominant purpose of this agreement, provided that  agreement is for the provision of any personal service

Ciara  5:06  
the uncertainty in this area of law looks set to continue for some time to come and as such we eagerly await the next instalment in this complex and contentious area