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Employment status – the documents still matter

31 October 2018 | Applicable law: England and Wales

Employment status remains a hotly contested issue in employment law as working patterns evolve. As employers become adept at using creative drafting to prevent individuals gaining valuable employment rights there has been a series of cases in which employment tribunals have held that the documentation does not reflect the true nature of the relationship and have found that individuals have worker or even employee status as a result. 

However the case of Hafal Ltd v. Lane-Angell reminds employers that tribunals should not disregard the terms of the written agreements as a matter of course and the drafting of the agreements is still of great importance.

Ms Lane-Angell's letter of appointment guaranteed her no minimum number of hours and stated, 'This post has no guaranteed hours and engagement is on a 'bank basis' i.e. that your details will be placed on Hafal's database and we will use your services as and when they are required and if you are available'. In practice Ms Lane-Angell would inform Hafal of her availability, and Hafal would then produce a rota of AA's who were on call. There was no guarantee that those on the rota would be called out during their allotted time. Sometime into Ms Lane-Angell's appointment Hafal introduced a 'three strikes' rule and a minimum requirement of ten shifts a month. The three strikes rule applied to those who had been placed on the rota after making themselves available, but had then failed to respond to calls. Ms Lane-Angell did not respond on several occasions when she was on the rota and was called upon to work. She was therefore removed from the rota and informed she would not be offered further work. She then claimed unfair dismissal – a right only available if she was an employee.

The employment tribunal decided that there had in fact been mutuality of obligation between Ms Lane-Angell's assignments and the introduction of sanctions for not working reinforced its view. It concluded that she was an employee. The EAT overturned this decision and said that the employment tribunal had been incorrect to disregard the terms of her letter of appointment, which were very clear and left no scope for implying a term that there was mutuality of obligation when Ms Lane-Angell was not working. The tribunal had also misunderstood the three strikes rule, which only came into play once an AA had made themselves available for work.

This case is a useful reminder of the importance of the contractual documentation, particularly for any organisation in the charity sector, that needs a flexible workforce and uses a bank of workers. Contractual documentation that does not reflect the actual facts of the situation may well be disregarded by an employment tribunal, but where the facts and documentation are in alignment, the terms of the contract will be vitally important.

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.

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