June 30, 2016

Employment Status and Mutuality of Obligations

In Secretary of State for Justice v Windle and Arada [2016] EWCA Civ 459, the Court of Appeal considered whether the absence of mutuality of obligation between assignments was relevant in determining an individual’s employment status.

Dr Windle (a Czech national) and Mr Arada (an Algerian national) were professional interpreters for the Courts and Tribunal Service (HMCTS). HMCTS would call on them to carry out assignments as and when needed. Their terms of engagement with HMCTS provided no guarantee of work and they were under no obligation to accept work when it was offered. They were also treated as self-employed for tax purposes. They brought claims for racial discrimination alleging they had been unfavourably treated when compared with British interpreters. The question arose as to whether Dr Windle and Mr Arada were “employees” for the purposes of U.K. discrimination law on the basis that in between assignments there was an “absence of mutuality of obligation” (the presence of mutuality of obligation being fundamental to most employment relationships).

The Court of Appeal found they were not employees for the purposes of U.K. discrimination law and dismissed their claims. The Court confirmed that although the key factor in determining employment status is the nature of the relationship during the period the work is being done, this should not exclude consideration of the absence of mutuality of obligation outside this period. For example, the supply of services solely on a case-by-case basis may indicate a level of independence and lack of subordination that is incompatible with employee status.

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