The Court of Appeal has held in Nursing and Midwifery Council v Somerville that it was not necessary for an individual to show an “irreducible minimum of obligation” in order to satisfy the statutory definition of worker. In other words, they did not have to accept work, nor did the employer have to offer work in circumstances where there was an overarching contract.
Basic facts
Mr Somerville, a barrister, was a panel member on the Fitness to Practice (FTP) Committee of the Nursing and Midwifery Council (NMC), which is responsible for regulating the conduct of nurses and midwives in the UK.
Under the agreement, the NMC was not obliged to offer a minimum number of sitting dates and he was free to withdraw from any dates he had agreed to sit. The contract did not stipulate any sanction if he refused work or changed his mind about a sitting date he had already agreed. He also had to perform the work personally and was paid a fee for each committee session he attended.
Mr Somerville claimed unpaid statutory holiday pay from the NMC on the basis that he was either an employee or a worker under section 230(3) of the Employment Rights Act 1996 (ERA).
Relevant law
Section 230(3)(b) ERA states that a worker is someone who works under a contract whereby they undertake “to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual”.
Tribunal decision
The tribunal found that Mr Somerville was not an employee because there was no “irreducible minimum of obligation”. In other words, there was no legal obligation on the NMC to offer him work nor any legal obligation on him to accept the work when he was offered it.
However, it found that he was a worker who was engaged on a series of individual contracts each time he agreed to sit on a panel and for which he was paid a fee. There was also an overarching contract between the NMC and Mr Somerville in relation to the general provision of his services.
The NMC appealed the decision on the basis that an irreducible minimum of obligation was an essential prerequisite of a worker's contract.
EAT decision
The EAT made a distinction between the two senses in which the phrase “mutuality of obligation” is used in the case law on worker status. The first simply denotes the exchange of promises or consideration necessary to create a legally binding contract (referred to as “mutuality of obligation”). The second refers to an obligation on an employee to accept and perform some amount of work for the employer and an obligation on the employer to offer some work and/or pay for that work (known as the “irreducible minimum of obligation”).
After carrying out a review of the relevant case law on mutuality of obligation, the EAT concluded that the tribunal was correct to conclude that it was not a prerequisite for worker status.
The appeal tribunal then considered the EAT decision in Cotswold Developments Construction Ltd v Williams which confirmed that the irreducible minimum was not a prerequisite for worker status. As regards the Court of Appeal decision in Windle v Secretary of State for Justice (weekly LELR 475), this held that the absence of an irreducible minimum of obligation outside of the contractual assignments was a relevant but not decisive consideration in cases involving a series of individual contracts. With regard to the recent decision of the Supreme Court in Uber v Aslam (weekly LELR 717), the EAT held that while it did not consider the issue in detail, it also did not set out that an irreducible minimum of obligation was necessary to establish worker status.
Therefore, the judge was right to conclude that the absence of an irreducible minimum of obligation was not incompatible with worker status in circumstances where, as in this case, an overarching contract existed between the parties under which Mr Somerville agreed to perform services personally to the NMC as part of a series of separate contracts.