Absence of Umbrella Contract Relevant to Employment Status


3 mins

Posted on 01 Jun 2016

When deciding whether someone employed on an assignment by assignment basis has the necessary employment status to bring a discrimination claim, the absence of an umbrella contract may be taken into account as a relevant factor. 

Speedread

When deciding whether someone employed on an assignment by assignment basis has the necessary employment status to bring a discrimination claim, the absence of an umbrella contract may be taken into account as a relevant factor. Whilst the key question is the nature of the relationship when work is actually being done, the absence of mutual obligations between assignments can still shed light on the nature of the relationship during the assignments. Supplying services on an assignment by assignment basis may indicate a degree of independence or lack of subordination in the relationship, which is incompatible with being employed under a contract personally to do work.

Facts

In Secretary of State for Justice v Windle and Arada, HM Courts & Tribunals Service (HMCTS) selects interpreters from the National Register of Public Service Interpreters to assist in court cases. Dr Windle and Mr Arada were on the list. Their written terms of service stated that HMCTS gave no guarantee of work. They were also under no obligation to accept work offered, but once they had accepted they could not send substitutes in their place. Between January 2003 and August 2012 Dr Windle performed around 1,000 assignments for HMCTS and Mr Arada spent around 80% of his time performing assignments for HMCTS. 

They claimed race discrimination, arguing that that they were employed “under a contract personally to do work”. The employment tribunal disagreed; they were self-employed individuals. The tribunal found that each time the interpreters accepted an assignment they entered into a contract personally to do work, however, there was no mutuality of obligation between assignments, in other words no “umbrella contract”. In addition, they were not “employed under” any contract personally to do work as they were not in a positon of subordination when providing their services to HMCTS. 

The interpreters appealed to the Employment Appeal Tribunal (EAT). The EAT ruled that the absence of mutuality of obligation between assignments was not relevant and the employment tribunal should not have taken it into account. The Secretary of State for Justice appealed to the Court of Appeal. 

Decision

The Court of Appeal allowed the appeal and restored the employment tribunal decision that the claimants were not able to claim protection from race discrimination.

The Court emphasised that the key question is the nature of the relationship when work is actually being done. However, the absence of mutual obligations between assignments can still shed light on the nature of the relationship during the assignments. Supplying services on an assignment by assignment basis may indicate a degree of independence or lack of subordination in the relationship, which is incompatible with being employed under a contract personally to do work. 

Implications 

This decision appears to help employers to argue that individuals employed on an assignment by assignment basis are not protected against discrimination. The Court of Appeal emphasised that the absence of an umbrella contract will be relevant only if it contributes to the conclusion that the claimant was not in a “subordinate” relationship.

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