In a recent case, the Employment Appeal Tribunal has held that an unfettered right of substitution in a contract is fatal to worker status. The case involved a dentist, but will be particularly relevant to those working in the construction sector.

The dentist, Dr Sultan-Darmon, entered into a contract with Community Dental Centres (the Centre) to provide dental services.

It was agreed that the dentist was not an “employee” but he argued that he was a “worker” and so entitled to pursue a claim for unlawful deductions from wages. The Centre argued that the dentist was a self-employed sub-contractor.

The dentist entered into a contract with the Centre which was described as a “licence agreement and contract for service” and specifically stated that his status was a self employed independent contractor. The contract also provided that if the dentist failed to provide his services for a period of more than five days for any reason (other than in the case of holiday) he would have to arrange for a locum to act on his behalf who would be paid by him. In fact, the dentist had never relied on that provision to engage a locum, although other dentists on similar terms had done so.

The EAT held that this was an unfettered right given to the dentist to appoint a substitute. He was not obliged to perform personally any work or services and could not, therefore, be a worker.

The case reinforces the importance of having carefully drafted contracts in place. However, it is also important to remember that all the circumstances of the case will be considered by a Tribunal when looking at worker status, including how the services are in fact provided.

For further information, please contact Bridget Wood (http://www.bllaw.co.uk/services_for_businesses/employment/key_contacts/bridget_wood/bridget_wood.aspx) or Alexandra Robinson (http://www.bllaw.co.uk/services_for_businesses/employment/our_team/alexandra_robinson/alexandra_robinson.aspx), in Blake Lapthorn’s Employment team

Author Katryn Gore - Posted by G. Alexander