The Employment Rights Act 2012 can be invoked only by employees. But even though this is accepted, the determination of who is an employee has, from time to time, produced different answers by the employment tribunals and appeal courts which decide issues of law.
One such example is the recent English Supreme Court decision in The President Of The Methodist Conference vs Preston (2013).
In 2009 Ms Preston, an ordained minister of the Methodist Church, filed a claim for unfair dismissal after she resigned, claiming she was pressured to do so.
She was formally assigned to the Redruth Circuit after a procedure that included a written invitation from the Methodist Church, which she accepted. She had no written contract.
Her relationship with the church was governed by a “deed of union” containing the church’s constitution.
Ministers are paid a stipend and given accommodation. However, the Methodist Church does not regard these as being given in return for the services of the ministers.
The tribunal dismissed her claim on the basis that she was not an employee.
On appeal, the Employment Appeals Tribunal (EAT) and the Court of Appeal both held that she was an employee and could pursue her claim for unfair dismissal.
The matter came before the English Supreme Court in 2013 which held that both the EAT and the Court of Appeal were wrong and overturned the decision by a majority of four to one.
Under Section 94 of the Employment Rights Act 1996 (UK), only an employee has the right not to be unfairly dismissed. Like our Employment Rights Act, the English legislation defines an employee as someone who has entered into or works under a contract of service or apprenticeship.
I will return to the President Of The Methodist Conference vs Preston (2013) in a future article.
However, it is interesting to note that our Employment Rights Act provides some guidance on the factors that should be considered in deciding whether a contract of employment exists. Those factors are set out in the First Schedule of the act, which provides as follows:
“In determining whether a contract of employment exists, consideration shall be given to whether:
(a) there is an obligation on the part of the employee to give personal and exclusive service;
(b) the work is done according to the instructions of the employer, and the manner in which the work is carried out is subject to the control and direction of the employer;
(c) the work has continuity, and such continuity creates for the employee an economic dependence upon the employer, without there being any financial risk to the employee;
(d) the work is carried out within fixed hours or at a workplace or workplaces specified or agreed by the employer;
(e) the work involves the integration of the employee in the organisation of the business, including his subjection to its policies;
(f) the employee is subject to the procedures of the business for addressing grievances and disciplinary matters;
(g) the employee is in receipt of periodic remuneration payable on a stipulated basis, for example, at hourly, weekly or monthly intervals, and all such payments are subject to statutory deductions;
(h) the employee is entitled to holidays with pay; and
(i) the employee makes no, or only nominal, investment in tools and equipment.”
The act then makes it clear that the above factors are not exhaustive and that they are all elements in a balancing exercise to determine the nature of the contract.
It is ultimately for the tribunal to determine what weight to give to each factor, and to determine whether a worker is an employee or an independent contractor using the above tests and, presumably, the traditional tests used by the courts in determining this issue.
Cecil McCarthy is a Queen’s Counsel. Wmail to [email protected]
