Locum Solicitor Was a ‘Worker’

Self-employed locum fails to become an employee

A self-employed locum solicitor failed in her attempt to be reclassified as an employee and was thereby prevented from advancing a claim for unfair dismissal, an Employment Appeal Tribunal (EAT) ruled.

Mrs Mandip Ranu began working, in earnest, as a locum solicitor for Diamond Solicitors LLP in the summer of 2007, although she had worked for the high street practice in the past. Initially Mrs Ranu was engaged to cover a period of holiday taken by the principal solicitor, Ms Power.

It was agreed by mesdames Power and Ranu that the latter would be paid £66.50 per hour when working from home and £20 per hour when working at the office of Diamond Solicitors. These arrangements were entered into very loosely, with no supporting documentation and no discussion about employment status from the outset.

Although the arrangement was initially to be temporary Mrs Ranu continued to work for Diamonds until November 2009.

In 2008 a meeting took place between Ranu and Power at which Ranu was offered a contract. Both parties disagreed when in 2008 the meeting took place and what was discussed. Ranu said it happened in January of that year and that Power agreed to put her on the payroll with fixed hours; Tuesday, Thursday and Friday, between 09:00 – 15:00, and with regular wages. During the school holidays Ranu had more flexibility. Ms Power, on the other hand, testified that the pair met later in the year and was precipitated by Power wanting to regularise the working relationship and taking more control of Ranu's working hours and arrangements.

At the end of the meeting Mrs Ranu claimed that Ms Power said that she was now 'committed for life', whereas Power maintained that Ranu refused her offer of a contract on the grounds that she preferred the flexibility of her existing self-employed arrangements.

Although Ranu was paid on a regular basis there had been no change to her working practices since she took up the engagement on 1st June 2007.

The relationship between the two women began to breakdown when Power noted that Ranu had been put onto the payroll and that Ranu indicated she was prepared to be self-employed if HMRC agreed. These sentiments were put in an e-mail to Ms Power on 22nd October 2009 when Ranu asked for her employment status to be confirmed in writing.

Mrs Ranu failed to submit a Self Assessment Tax Return but the Tribunal considered this to be an indication more of her lack of concern about records and such formalities rather than her employment status.

Mutuality of obligation
(MOO) and control were present in the relationship to some degree. MOO, in that Ranu carried out work over a long period of time on a reasonably regular basis and control more by force of personality than rules relating to holiday notification, taking files home and the position of Power as the principal solicitor at Diamonds. Ranu behaved in a civilised and professional manner when notifying Power of holidays and was willing to assist when the need arose.

There were elements of the relationship which could alone have indicated employment but the Employment Tribunal found that, taken as a whole, the weight of evidence pointed towards Ranu being a self-employed professional who exercised significant flexibility to the benefit of not only herself but also Diamonds.

The inclusion of Ranu on the payroll appeared to the Tribunal to be for practical convenience connected with Ranu's inconsistent submission of records, rather than an admission of employment.

The Judge found that Ranu was neither an employee nor an independent contractor but rather a worker. This afforded her certain rights but not the main one she sought of unfair dismissal.

Unlike employment status for tax purposes which seeks only to discern between employment and self-employment, the Employment Rights Act 1996 provides for a third category, that of 'worker'. Section 230(3) of the act states that a “worker means an individual who has entered into or works under:

  1. a contract of employment; or
  2. any other contract, whether expressed or implied (and if it is express) whether oral, or in writing, whereby the individual undertakes 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;

and any reference to a worker's contract shall be construed accordingly.”

The EAT dismissed Mrs Ranu's appeal but in so doing noted that neither of the two solicitors helped themselves by failing to document what the relationship was and that on a different day, with different evidence, a different Judge might have decided there was employment status.

It is interesting to note that in the absence of any documentary evidence surrounding the working relationship, the Tribunal preferred the evidence of Ms Power as she appeared to be more certain of her dates and times than Ranu. This may have also assisted in convincing the Tribunal that Ranu was not told that she would be employed from the point of the meeting between the two.

A useful reminder, therefore, to contractors to regularly maintain an IR35 dossier which could prove critical in enquiries where the end client is uncertain about events, dates and times.

1 Comment

  • Rob says:

    “A Worker” ! what a cop out ! surely you’re either employed or self-employed ? So where does this individual, who is neither employed or self-employed, stand according to IR35 ?

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