Employee Status - In order for Carl to be able to bring a claim of unfair dismissal against Baker-Rags Ltd he has to establish both that he is an employee of Baker-Rags and that he was unfairly dismissed.

• Mutuality of Obligations: as a basic view mutuality requires an employer to give work, and an employee to carry out said work. This has formed problems for those who are in temporary contracts or other types of irregular workers though, where there is prima facie  no obligation to provide work, however an obligation has been found before

Another irreducible minimum has been claimed to exist in the case of Express & Echo Publications Ltd v Tanton :

• Personal Service: Held by Tanton to be an irreducible minimum whereby if one isn’t personally obliged to work for the employer then an employment relationship doesn’t exist – for example, a substitution clause in a contract where one can have someone substitute for them if they are unable to perform the required work for whatever reason.  However a substitution clause need not be fatal to an employment contract. When a substitution clause exists only to allow for a substitution when the employee is ill, then there is still a contract of employment.

To ascertain whether Carl is an employee the tests outlined above now need to be applied to Carls situation.

The law as it relates to Carl:

The irreducible minimums:

• Personal Service: There is a substitution clause in the service contract for Carl to send a substitute in place of himself if Baker – Rags have been notified and agree to the substitute. As Carl has assured them that it would only be exercised in the narrowest of circumstances such as hospitalisation, it is submitted that these facts fit the ratio in Staffordshire Sentinel and so is not fatal to an employment contract.

• Mutuality of Obligations: There is a prima facie  issue with establishing mutuality of obligations because Carl’s service contract only runs for certain times during the year,  however, for the purpose of demonstrating Carl is an employee at the point his contract is terminated then all that needs to be shown is that there was mutuality of obligations when the contract was terminated – as a service contract was in place there was an obligation for Carl to perform the work outlined in the contract, and there was an obligation for Baker – Rags to ensure that work was there.

Other tests of employment status:

• Control: There is a clear level of control over Carl, as not only is he being told what time he has to work and what work to do, but he is being instructed in how to perform the work – being set time limits on when the work is to be completed for example.

• Integration: the warnings and disciplining of Carl by Baker-Rags demonstrates that there is at least a certain level of integration due to his being subject to the disciplinary system.

• Economic Reality: Although Carl  is paid by Baker-Rags, they do not administer his tax and National Insurance contributions, which would suggest a non employee. His situation with regards to uniform and equipment would also suggest a non employee were it not for fact that they have started purchasing uniform for him.

There is also concern with his working through the service company, Data Analysts Ltd. As he is in essence working through the company Data Analysts, and not directly for Baker-Rags it would tend to suggest that he is in fact not an employee, for example: Massey v Crown Life Insurance Co. However Carls case can be distinguished from that of Massey, for as Lawton LJ said:

“Ferguson clearly established that the parties cannot change a status merely by putting a new label on it. But if in all the circumstances...it is manifest that there was an intention to change status...there is no reason why the parties should be unable to make the change”

Having regard to all the circumstances, including the purchasing of equipment for Carl, the disciplinary of Carl as well as both Carl and Baker – Rags wanting to in reality continue as they had been, there was no intention to change status.

It is therefore submitted that Carl is an employee.

Unfair Dismissal:

In order to establish unfair dismissal, a number of requirements have to be satisfied: the claimant has to have been dismissed; the claimant must have the right to claim for unfair dismissal; the real reason for the dismissal must be established; the reason must be demonstrated not to fit one of the enumerated fair grounds and that if the reason is found to fit one of the grounds for dismissal, that it wasn’t fair to use it in that particular circumstance.

Was Carl dismissed?

Dismissal is defined under section 95 of the Employment Rights Act 1996 as when the contract under which a claimant is employed is terminated by the employer. The effect of the termination is, when no notice is given, the date on which the termination takes effect

Carl was clearly dismissed as his contract was terminated by Baker – Rags.

The right to claim unfair dismissal:

To have the right to claim for unfair dismissal, it must be established that one was dismissed (above), and that the employee must have been in continuous employment for at least one year at the time of the termination of the contract.

Carls service contracts only run for ten months at a time, so it would be argued by Baker-Rags that he does not qualify by virtue of s.108, however a continuity of employment may be found that demonstrates that Carl has been employed for three years, since he worked for Baker – Rags through Data Analysts Ltd. In Cornwall CC v Prater it was established that the use of s.212 of the ERA could be used to unify seemingly separate employment contracts into a single continuous employment as long as each individual service contract could be shown to be an employment contract. There is mutuality of obligations for each ten month service contract, so it is submitted that they are employment contracts, and the two month gaps are merely a temporary cessation of work,  therefore Carl was indeed employed for over one year when his contract was terminated.

The reason:

Although it is for the employer to state what the reason was for the dismissal it is assumed that it was because of the economic downturn.

Fair grounds:

The fair grounds for dismissal are found under s.98 of the ERA 1996. An economic downturn is not one of the listed fair reasons for dismissal, however it may be argued by Baker – Rags that it was some other substantial reason, the economic downturn, however that doesn’t justify the dismissal of Carl holding the position he held.

It is therefore submitted that Carl has grounds for a claim of unfair dismissal.

Bibliography

Books:

Smith and Wood. ‘Employment Law’ (9th ed, OUP, Oxford, 2008)

Journals:

A.C.L. Davies ‘Casual Workers and continuity of employment’ I.L.J. 2006, 35(2), 196-201

Deakin, S. ‘Interpreting Employment Contracts: Judges, Employers, Workers’ ESRC Centre for Business Research, University of Cambridge, Working Paper No. 267 page. 2.

Leighton, P. & Wynn, M. ‘Temporary agency working: is the law on the turn?’ Company Lawyer, 2008, 29(1), 7-15

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