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Case law: Staff can be ‘employees’ even if they have sometimes substituted another to do their work

Employers should check whether staff they do not consider to be employees because they can substitute others to do their work, are in fact employees because their right of substitution is limited, following a recent ruling.

February 2019

This update was published in Legal Alert - February 2019

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.

The nephew of an elderly man paid for a live-in carer for him for three years. He paid the carer gross and she paid her own tax and national insurance. The carer was originally introduced to him by an agency and recruited on a six-month contract. Initially, she submitted invoices, but when her contract was extended she stopped doing this, and was just paid by standing order. Carers supplied by the agency usually worked on a rota, but this carer did not.

When the work ended the carer brought several legal claims, and the court had to decide whether she was employed by the nephew. It was accepted that two factors in their relationship were consistent with an employer/employee relationship:

  • There was mutuality of obligation – the nephew had to offer the carer work and she had to accept it.
  • The nephew exercised a sufficient degree of control over the carer’s work.

Importantly, there were a few times when the carer had asked if she could send a substitute in her place. This was important because a general right of substitution is inconsistent with an employer/employee relationship.

However, the Employment Appeal Tribunal ruled that in this case, there had only been substitution when the carer was on days off, during her annual leave and when she was called up for jury service. It therefore only happened on occasions when she was actually unable to work, which did not amount to a general right of substitution.

Operative date

  • Now

Recommendation

  • Employers should check whether staff they do not consider to be employees because they can substitute others to do their work, are actually employees after all, because their right of substitution is limited and not sufficiently general.

Case ref: Chatfeild-Roberts v Phillips & Universal Aunts Limited UKEAT/0049/18/LA

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.

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