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Court of Appeal Rules on Definition of Worker

PLEASE NOTE: Information in this article is correct at the time of publication, please contact DFA Law for current advice on older articles.

The level of protection afforded to those who carry out work for someone else is not provided on a uniform basis. Some employment rights are conferred only on employees, whereas other rights are available to a wider category of workers, which includes, but is not limited to, employees.

In The Hospital Medical Group Ltd. (HMG) v Westwood, the Court of Appeal has ruled that a general practitioner (GP) who carried out minor surgery as a private contractor was correctly categorised as ‘a worker’ for the purposes of legislation regarding holiday pay and unlawful deductions from wages.

The GP performed minor operations, particularly hair restoration procedures, for HMG under an agreement which defined his role as that of a ‘self-employed independent contractor’. His remuneration was calculated as a percentage of the company’s income from the patients he treated. He performed this role for HMG as a sideline to his main employment, which was as the senior partner of a medical practice.

After the agreement was summarily terminated, the Employment Tribunal (ET) upheld the GP’s plea that he had been a worker engaged by the company and was thus entitled to a substantial sum in respect of unlawful deductions from his pay and accrued holiday pay.

That decision was upheld by the Employment Appeal Tribunal (EAT).

Permission to appeal against the EAT’s decision was granted, not because HMG had any real prospect of success but because doing so would give the Court of Appeal an opportunity to consider the matter and perhaps provide clarity as to the way the relevant law should be construed and applied.

In the Court of Appeal, Lord Justice Kay said that the issue of whether the role the GP performed for the company brought him within the statutory definition of a worker under Section 230(3)(b) of the Employment Rights Act 1996 (ERA) was ‘fact sensitive’ and depended upon the nature of the role and the terms of his agreement with the company.

In the Court’s view, although the GP was not employed by HMG, he had contracted specifically and exclusively to carry out hair restoration surgery on the company’s behalf and the company could not be seen as ‘just another purchaser’ of the GP’s professional services. Even though the GP was in business on his own account, HMG had described him as ‘one of our surgeons’ in its marketing material and he was clearly an integral part of its business.

The Court found that, in this case, the services provided by the GP did bring him within the definition of a worker for the purposes of the ERA.

HMG’s appeal was dismissed and, unless settlement terms are agreed, the case will return to the ET for a remedies hearing.

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