The Employment Appeal Tribunal (EAT) has upheld that a locum GP, who was working for an out of hours (OOH) provider should have been treated as a ‘worker’. This is despite the organisation they worked for arguing that they should be considered as ‘self-employed’ because they were working through a limited company.
This case demonstrates the importance of establishing a person’s employment status in order to accurately determine their rights and the employer’s responsibility, in addition to considering their tax status.What is a ‘worker’?
Under the current system, there are three main types of employment status for individuals:
The definition of a ‘worker’ falls somewhere between the duties and expectations of an employee and that of a self-employed individual.
‘Workers’ have access to certain employment rights, such as; paid annual leave, sick leave, National Minimum Wage (NMW) and protection against unlawful discriminations.
A ‘worker’ is not recognised under tax law, therefore, an individual may be treated as self-employed for tax purposes, however, are entitled to worker rights under employment law.
To determine whether someone is an employee, worker, or self-employed, an employer needs to consider both a person’s contract and the employment relationship.Community Based Care Health Ltd v Narayan
In 2017, Dr Reshma Narayan, a locum GP who worked through her own limited company, claimed she was unfairly dismissed and discriminated against by the OOH provider Community Based Care Health Limited in 2015. Community Based Care Health is a ‘not for profit’ organisation delivering OOH GP services to patients in Gateshead, using GPs from an approved list.
Dr Narayan claimed that Community Based Care Health decided to stop offering her shifts over conflict regarding her employment status.
Dr Narayan regularly worked the same shifts and had no obligation to accept work, taking holiday when she wished to, while Community Based Care Health was not obliged to provide any work. Community Based Care Health argued that Dr Narayan was self-employed and therefore was not entitled to receive paid annual leave.
The judge reviewed 13 factors to make a determination about Dr Narayan’s worker status, including; the requirement to work personally for the company, the need to provide her own professional indemnity insurance and the company supplying the required drugs to her and other GPs.
The judge concluded that Dr Narayan should have been classed as a 'worker'.
Carolyn Brown, an employment law specialist from the consultancy firm RSM, said “This case serves as a further reminder of the challenges of establishing self-employment in long term integrated working relationships.”“This also underlines how challenging each working status determination is and how each determination has to be evaluated on its own facts.”
Dr Richard Fieldhouse (National Association of Sessional GPs chair) says “This whole case might cause fright to organisations similar to Community Based Care Health who engage self-employed GPs, whether as sole traders or their own limited companies. But rather than be a new finding, it rather reiterates the advice that your legal status is not defined by either the company engaging the locum, nor the locum themselves, but both the way in which the work is carried out, and the terms of the work.”What next?
Practices and other providers need to be aware they could face very large bills from locum GP ‘workers’, claiming holiday pay covering a number of years, as well as other costs associated with worker status such as sick pay and NMW provisions.
We would advise our clients, where they have such locum arrangements in place, particularly those who work consistently for the same practice, to take advice concerning the potential for their locums to claim ‘worker’ status and to understand the risk in each case.
It is important to remember that each determination should be evaluated on its own facts, on a case-by-case basis.
It is also essential there is documentation in place to correctly lay down the respective responsibilities for both the locum GP and the employer. This would help determine the employment status, although will not always be decisive if the employment status is challenged as it will be the facts of the day to day relationship which would be scrutinised.
Although the government has a toolkit to help determine an individual’s tax status, which was released following the introduction of the off-payroll working rules for public sector bodies in 2017, there is not currently a toolkit to help individuals determine their employment status.
In light of upcoming changes to the off-payroll working rules that are being rolled out to the private sector from April 2020, the government has promised to introduce new tools to help individuals understand how to determine their employment status for organisations engaging third party contractors.
For further details how this may affect you or your business, please contact us