ICAEW.com works better with JavaScript enabled.

Case law: Employer rejects charity 'bank worker' claim that she is an employee and cannot be unfairly dismissed

Businesses and other organisations using 'bank workers' should ensure it is clear from the contracts entered into with them whether or not such workers are employees, to avoid the risk of unexpected claims - such as unfair dismissal.

October 2018

This update was published in Legal Alert - October 2018

Legal Alert is a monthly checklist from Atom Content Marketing highlighting new and pending laws, regulations, codes of practice and rulings that could have an impact on your business.

A volunteer at a charity was sent a letter offering her paid work on a 'bank basis', i.e. that there were no guaranteed hours and the charity would call her up 'as and when required' and 'if you are available'.

The charity's procedure was that bank workers emailed their availability each month to the charity, which then drew up a rota for the month. Anyone on the rota could be called up at any time they had said they were available. A bank worker who failed to respond to a call up three times in a month could be taken off the rota – the 'three strikes rules'.

The charity had problems finding enough available bank workers each month so it imposed a new requirement on its bank workers, saying that they had to be available for a minimum of 10 shifts per month.

Subsequently, the worker fell foul of the three strikes rules and was taken off the rota for the next month. The charity then told her it would stop offering her any work at all. She claimed unfair dismissal.

To succeed, she had to prove she was an employee of the charity. To show employee status she had to show there was 'mutuality of obligation' between her and the charity – that theirs was a contract under which the charity was obliged to offer her work and, if it did so, she was obliged to accept it. Crucially, she also had to show that this arrangement continued even during periods when she was not available for work or on the rota (known as an 'umbrella' contract).

The Employment Tribunal found that she had satisfied these requirements and, given that she had the necessary length of service, she could therefore bring an unfair dismissal claim.

The Employment Appeal Tribunal disagreed. It focused on the letter offering her the work, which clearly said that she only had to provide her services if she had told the charity she was available – so there was no mutuality of obligation as she didn't have to accept work if she wasn't available. Nor was the letter a 'sham' – the way it described the relationship was consistent with what actually happened in practice, whereby she told the charity whether (and when) she was available each month.

The EAT disagreed with her argument that the three strikes rules created an overall obligation to accept work (an umbrella contract) because it applied a sanction if she didn't. It said that those rules did not apply during periods when she was not on a rota, they only applied after she had told them her availability at the beginning of the month, and after her name had been put on the rota for that month. Therefore the contract did not continue during periods when she was unavailable/not on the rota.

It left open the question of whether the requirement to be available for at least 10 shifts per month would have created mutuality of obligation, because that was not in force at the time she was claiming unfair dismissal.

Operative date

  • Now

Recommendation

  • Businesses and other organisations using 'bank workers' should make sure it is clear from the contracts entered into with them whether or not such workers are employees - to avoid the risk of unexpected employment law claims such as unfair dismissal

Case ref: Hafal Ltd v. Lane-Angell [2018] UKEAT 0107_17_0806

Disclaimer: This article from Atom Content Marketing is for general guidance only, for businesses in the United Kingdom governed by the laws of England. Atom Content Marketing, expert contributors and ICAEW (as distributor) disclaim all liability for any errors or omissions.

Copyright © Atom Content Marketing