This conduct of the parties. Also, Smith was still

This dissenting judgment will comment on the previous EAT and CA
judgments regarding Mr. Smith’s employment status as it is of significant
importance in the employment law sector.


It is unnecessary to state the facts of the case herein, a part from:

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Court of Appeal summarised the tribunal’s reasons for finding that Mr. Smith
was a worker as follows:

primary purpose of the agreement was for Smith to present work for Plimlico;

was required to work a specified minimum amount of hours a week on days that
Plimlico agreed;

was an expectation for workers to consult with Plimlico and agree their working
hours, despite there being some flexibility;

right to substitute was not an unfettered right and the insistence that it was,
was not evident by the documentation/the conduct of the parties. Also, Smith
was still obliged to work a minimum hours of work and the right to bring other
external contractors did not change this.

Smith being able to decide how he carried out work, Plimlico had significant
control in a number of different regards, because of this Smith was restricted
heavily, there were some restrictive covenants in respect of working in a
competitive position

‘Pimlico could not be considered a
client or principle of Mr Smith but was better regarded as a principal’.

The question who is an employee is central
in employment law because it dictates what employment law rights individuals
have; nevertheless the determination of employment status has sometimes proven
difficult. Section 230(1) of Employment
Rights Act (‘ERA’) states an employee is ‘an individual that has entered into or works under (or, where the
employment ceased, worked under) a contract of employment’. Section 230(2)
construes a contract of employment as ‘a
contract of service or apprenticeship, whether express of implied’.

Although workers have a few protections in
regards to employment law, employees have significantly more. Some rights
workers have come from the Working Times
Regulations 1998 and the National Minimum Wage Act 1998. Employees have a
number of important rights that workers do not have, this includes, Section 94(1) ERA that includes ‘the right not to be unfairly dismissed’.

Therefore, being regarded as an employee is paramount; as a result of Smith
being regarded as a worker he will not receive as many rights.

Due to the statutory definitions of distinguishing employment status
being of limited assistance, the courts have created a number of tests to help
establish if a contract is one of employment. In regards to Smith, the key
issue to determine is whether he is an employee, worker or a self-employed
independent contractor. Smith will only be able to make a dismissal claim if he
can show that he is an employee with over two years service (s135(1)(a) and s155 ERA. Smith has
worked at Plimlico for a greater period so the question turns on whether he is
an employee.



The control test refers to the control exercised by the employer over
the employee. Makenna J, in Ready Mixed
Concrete (South East) Ltd v Minister of Pensions and National Insurance1
stated, in order for a contract of service to exist three conditions must be
fulfilled: “(1) the servant agrees that,
in consideration of a wage or other remuneration, he will provide his own work
and skill in the performance of some service for his master, (2) he agrees,
expressly or impliedly, that in the performance of that service he will be
subject to the other’s control in a sufficient degree to make that other
master, and (3) the other provisions of the contract are consistent with its
being a contract of service.”2

The above statement has been used as a guide by subsequent cases for
ascertaining employment status. While, the test looks straightforward, due to
work becoming more complex and technology changes, the test could be considered
inadequate for being the sole determining of employment in the current labour
market.3  For Smith, the test of control appears to
have limited relevance. Smith appears to have a great deal of control as per
the judgement from the Court of Appeal case. On its own it is not a
determination of employment, as a number of other requirement must also be


The next test was the integration test, which comes from the case Cassidy v Ministry of Health.4
In this case, it identified a doctor working in the NHS was actually an
employee of the health authority. This was also referred to in Stevenson, Jordon and Harrison Ltd v
MacDonald and Evans5by
Denning LJ.

This test questions if an individual is employed as a part of the
business, or whether the work is completed as ‘an integral aspect of the
business’, or if it is just an accessory to it.6
It appears simple eventhough it has exemplified to be of limited use. This is
because, it is unclear of what is actually meant by ‘integration’ into an ‘organisation’,
when it referred to whether a person was integral part of the organisation.

The court slowly moved from only considering one single factor to
determine employment status. The multiple test was adopted, which was
considered a more flexible approach, as no single factor was conclusive; all
the different factors are to be considered then weighed to reach the outcome.

This test is also known as ‘the multifactorial approach’.

In regards to the above, the key question is from looking at all the
facts, where some may direct to self-employment status and others to
employment, would the evidence overall indicate to the individual being an
employee? Cook J applied this is in Market
Investigations v Minister of Social Security7.

He stated the paramount question was: ‘is the person who engaged himself to
perform these services performing them as a person in business on his own
This refers to whether the individual will carry any economic risk as a
self-employed person. Factors that need to be considered include if the worker
hires his own helpers, the degree of financial responsibility the individual
carries in regards to any investment or whether he has any management

Apply to Smith



A categorical advantage of the above test is that it gives the
court/tribunal a great deal of flexibility: they will consider all the relevant
factors; there will be no single decisive factor. This approach is of
significant use in cases where some factors indicate self-employment, which
includes the contractual right to substitute another worker instead of
himself/herself; although other factors may suggest employment status, which
includes the unrestrained power of decide the time and way the work is
conducted. By considering all the different circumstances of a case and allowing
appropriate weight to be given to these (potentially opposing) factors, it
would allow the court to reach a sound conclusion. This would be free from
having undue reliance on one determinative factor. However, a weakness is that,
for cases comprised of complex factors, it could be difficult for the parties
to the relationship to know if it is one of employment or not. Due to this,
this multiple factor test is not vastly further in concluding employment


It is
apparent from the above that the courts require a minimum obligation that the
contract should be one of service; for example, an obligation for work to be
offered by the employer and for it to be accepted by the worker. This is known
as mutuality of obligation, which has been exemplified in Nethermere (St Neots Ltd v Taverna & Gardiner9.

in regards to the status that casual or temporary workers have can be
especially challenging to resolve. In these cases is it of particular importance
where there is mutuality of obligation. Clark
v Oxfordshire Health Authority10involved
a ‘bank nurse’ that was held by a health authority to work on a casual basis,
this was to cover temporary vacancies as and when needed, this was held not be
an employee.11
This is because, during the periods in which she was not contracted, there was
no mutuality of obligation. Additionally, in O’Kelly v Trusthouse Forte plc,12
which concerned wine butlers, that were described as ‘regular casuals’,
were found to be self-employed.13
This again was due to no mutuality of obligation. In Carmicheal v National Power plc.14,
two individuals that were casual as required at a nuclear power station
again held to not be employees due to a lack of mutuality of obligation. This was
because, they did not have an obligation to take work, if offered, and the
company was not under an obligation to offer it.15

case is less clear, while his contract states that there is no duty to accept
work, in practice he has to contact Plimlico in advance to agree his hours this
suggests some obligation on him to attend unless other arrangements have been
made. The above was also similar to the outcome in Autoclenz LTD v Belcher and Ors16,
because eventhough the contract stated there was no obligation t accept
work, this was contradictory to the fact the valets were obliged to call in
advance if they could not attend.17
The court is convinced that Smith was obliged to accept the work given and that
Plimlico were obliged to provide work, it can overlook what is stated in the

Finally, where a contract includes a term in which the worker could
substitute someone else to do his/her work, this factor may make it difficult
to find an employment relationship. This factor is known as ‘personal service’,
which could be considered another minimum requirement for concluding a contract
of employment. Express and Echo Publications Ltd V Tanton,19
concerned a contract which had a term that Tanton could substitute someone else
to carry out his duties, he had done this a few times. The Court of Appeal held
that this right to substitute was inconsistent with a contract of employment.

The minimum requirement of employment is for the employee to complete his
services personally.20The
EAT stated in Macfarlane v Glasgow City
even if in a contract there is a limited power enabling substitution this does
not automatically mean there will be employment.22


This requirement of personal service is not potentially problematic.

Smith’s contract does not contain a power of substitution.23


In Ready Mixed Concrete,  Mackenna
J commented24
“that one condition for a contract of service was that the servant agrees to
provide his own work and skill”25.

The EAT in Macfarlane v Glasgow City
that the notion of a limited power of substitution did not necessarily
contradict employment status.27In
Smith’s case was no unfettered substitution clause.



To conclude, it is evident that cases do not provide rigid rule, and
only provide guidance. From above it is clear that the common law tests
indicate that there are three minimum requirements: control mutuality of
obligation, and personal service, this is for a contract of employment to
exist. ‘It is also clear that the courts will consider all the factors in a
case and how the relationship is concluded in practice rather than what the
parties have themselves stated to be the nature of the relationship is
concluded in practice (Autoclenz Ltd v Belcher and Ors 2011 UKSC 41)’.



Additionally, the changing nature of the labour market and the gig
economy has made it significantly more difficult to judge an individuals
employment status. Cases such as Uber and Deliveroo are clear examples of this,
these cases show that whilst some aspects of the working relationship can
indicate that the individual is an employee, other factors can indicate that in
fact they are self-employed or a worker. Therefore, it is the job of the court
to look at thw whole and reach an outcome.




Using the multi-factorial test applied by Cook J in Market
Investigations v Minister of Social Security 1969 2 QB 173, does the evidence
overall point to Smith being an employee? Although he is required to organize
his own tax affairs, he works as part of a team and Plimlico determines the
rate of pay. He has to wear the company uniform and there appears to be an
element of personal service and mutuality of obligation in that he is under an
obligation to attend work (or inform Plimlico if unable to do so) and cannot
substitute. The Supreme Court in Autoclenz has been clear that employment
contracts differ from other commercial contracts due to the inequality of
bargaining power between the parties and has held that any written agreement may
be disregarded where it does not correspond with the parties’ true legal
obligations. It is the substance or reality of the relationship that must be
determined, which involves considering all the evidence including the parties’
conduct. Applying that analysis, the claimants in Autoclenz were held to be
employees. Despite what his contract says Smith may also be able to argue that
he is an employee and not a worker so should be entitled to more rights.





Autoclenz LTD v Belcher and Ors 2011UKSC 41

Carmicheal v National Poer Plc 2000 IRLR 43

Cassidy v Ministry of Health 1951 2 KB 343, CA

Clark v Oxfordshire Health Authority 1998 IRLR 125, CA

Express and Echo Publications Ltd V Tanton 1999 IRLR 367

Kahn-Freund, ‘Servants and independent contractors’ (1951) 14 Modern Law
Review 504

Macfarlane v Glasgow City Council 2001 IRLR 7

Market Investigations v Minister of Social Security 1969 2 QB 173

Nethermere (St Neots) Ltd v Taverna & Gardiner 1984 ICR 612, CA

O’Kelly v Trusthouse Forte plc 1983 ICR 728, CA

Stevenson, Jordon and Harrison Ltd v MacDonald and Evans 1952 1 TLR


Working Times Regulations 1998 and the National Minimum Wage Act 1998

Employment Rights Act


Other sources: accessed 01/12/17

?Book: Concentrate
Questions and Answers Employment Law: Law Q&a Revision and Study Guide ?Roseanne Russell?

Oxford University Press, 5 Oct 2017
– Labor laws
and legislation – 264 pages

1 1968
2 QB 497

2 Ibid

3 Although an essential component in a
contract of service, it is a crude measure and, as Kahn-Freund argued, ‘based
upon the social conditions of an earlier age’ (O.Kahn-Freund, ‘Servants and
independent contractors’ (1951) 14 Modern Law Review 504). Highly skilled or
senior employees or those with a significant degree of flexibility in their
working conditions cannot be said to be ‘controlled’ by their employer in any
real sense while carrying out their work. Although important, ‘control’ is no
longer seen as conclusive.

4 1951
2 KB 343, CA,

5 1952
1 TLR 101

6 Ibid

7 1969
2 QB 173

8 Ibid

9 1984
ICR 612, CA

10 1998
IRLR 125, CA

11 Ibid

12 1983
ICR 728, CA

13 Ibid

14 2000

15 Ibid

16 2011

17 Ibid

18 Otherwise
the mutuality of obligation will be fatal as this is a necessary requirement to
show employment. (Carmicheal v National Poer Plc 2000 IRLR 43).

19 1999 IRLR

20 Ibid

21 2001 IRLR

22 Ibid

23 In Express
and Echo Publications Ltd v Tanton 1999 IRLR 367, Tanton had worked as an
employee but he was made redundant. He was re-engaged as a driver on what the
company intended to be a self-employed basis. He was sent a document for
signature containing a clause that in the event that he is unable or unwilling
to perform the service personally, he will arrange for another person to
perform the work at his own expense. Although he refused to sign this document,
he continued working in accordance with its terms and occasionally, used the
substitution power.

The court of
appeal held that the right of substitution was inconsistent with a contract of
employment, which must necessarily contain an obligation of personal service.

Peter Gibson
LJ called such a provision ‘a remarkable clause to find in a contract of
service’. Furthermore, the court of appeal held that the implied term of mutual
trust and confidence was consistent with a requirement of personal service.


24 In (itself a
case involving substitution by the owner/driver of a vehicle, which strongly
pointed towards a finding of self-employment)

25 1968 2 QB

26 2001

27 Ibid