A decision to make your hair stand on end? When is a self employed individual really a worker?
In Hospital Medical Group Ltd v Westwood, the Court of Appeal has provided guidance on how to decide when a self-employed contractor is actually a worker.
Mr Westwood was engaged by Hospital Medical Group Ltd to carry out hair transplant procedures on a self employed basis. He entered into an agreement which stated he was a self-employed contractor, and was paid a fee based on the number of procedures he carried out. He also worked as a GP elsewhere. The company terminated his agreement and Mr Westwood claimed for unlawful deductions from wages, and accrued holiday pay, claims that can only be brought by individuals with employee or worker status.
In order to be a worker, 3 requirements must be satisfied:
- The worker must be an individual who entered into or worked under a contract for work or services;
- The individual undertakes to perform the work personally; and
- The other party does not have the status of a client or customer of the individual.
The company argued that they were a client or customer of Mr Westwood and he was therefore not a worker. Mr Westwood argued that the company was not his client or customer, as he provided services to the company’s clients on behalf of the company. The company also referred to Mr Westwood in their marketing material as “one of our surgeons”.
The Court of Appeal agreed with the EAT and Employment Tribunal that Mr Westwood was a worker, and therefore able to raise the claims. The Court of Appeal found that there is a need to distinguish between individuals who market their services as an independent person to the world in general (who will have clients or customers), and those who are recruited by a principal to work as an integral part of the principal’s operations, which was the case with Mr Westwood.
This case will be of interest for organisations who engage self-employed persons as part of their business model as it highlights that an individual who is in business on his own account may nevertheless be a worker; the courts will look behind the definition of the individual in any agreement, and consider the true nature of the relationship.
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