18 July 2018

No umbrella contract, despite regular work for employer

Why care?

Only employees are able to bring claims for unfair dismissal, and to do so they must usually have at least two years' service. Where an individual has carried out a number of separate short projects over a period of time, there may be an overarching 'umbrella' contract between the parties which has lasted the whole period, or there may a series of separate contracts for each piece of work. Only if the individual can show an overarching contract is he or she likely to have have the length of service necessary to bring a claim.

The case

The Claimant worked for a charity which supported vulnerable people with or recovering from mental ill health. It runs a scheme which enables appropriately trained adults ('Appropriate Adults' (AAs)) to assist vulnerable people detained at police stations who need support.

In February 2013 she was appointed as a volunteer AA with no guaranteed hours on a 'bank' basis. Only a month later, the charity wrote to her again, repeating that she had no guaranteed hours and explaining that her details would be on the charity's database and she would be called on as necessary. She would be entitled to payment for her time, paid holiday, mileage rates, but not to sick pay or pension contributions.

The Claimant confirmed her availability in advance and was included in a rota of who was on call for seven police stations in the area, and would be called if necessary. She also carried out some other fixed term work for the charity; other AAs had jobs with other organisations.

In May 2015, the charity decided that AAs should be asked to commit to being available for at least ten shifts each month, and that AAs who did not respond when called would be removed from the rota under a new 'three strikes' rule. In January 2016, the Claimant was told that she would no longer be called.

She claimed unfair dismissal. The charity denied that it was a dismissal, as she was never employed. The Employment Tribunal found that the letter of appointment had not been intended to be an exclusive record of the terms of the relationship; she was an employee because there was an overarching contract between the parties.

The EAT disagreed, and found that there was no umbrella contract between the parties. Atlhough the Tribunal was permitted to look beyond the terms of the letter, it had not taken the written terms of appointment properly into account. The letter was unambiguous and clearly said there was no obligation to provide or accept work. The three strikes rule from May 2015 only applied to periods when the Claimant had already said she was available, and there was no finding of any mutuality of obligation for the periods in between, nor for the period before that date.

The EAT quashed the decision of the Tribunal and held that the Claimant was not an employee, and therefore unable to bring a claim for unfair dismissal.

What to take away

This case is a useful reminder of the importance of the contractual documentation in employment status issues.

It was not argued that the documentation in this case was a sham (the EAT did not have to consider Autoclenz v Belcher arguments about whether or not the contractual arrangements reflected reality). However, some of the recent gig economy cases (in particular, the courier cases) have considered this.

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