Courts rule ‘self-employed’ carer is employee

The Employment Appeals Tribunal (EAT) has upheld the decision of an Employment Tribunal in Chatfeild-Roberts v Phillips & Universal Aunts Limited that a live-in carer was an employee of the client, even though they viewed her as self-employed. This case is a useful reminder that employment status is not a choice - a court will consider the reality of the working arrangements, rather than the intentions of the parties, when determining employment status.

Facts

Ms Phillips worked as a live-in carer for Mr Chatfeild-Roberts’ uncle. She was introduced to the family by Universal Aunts Limited, an agency. Ms Phillips was initially engaged by Mr Chatfeild-Roberts for six months, but this was extended. She worked for Mr Chatfeild Roberts for three years. Ms Phillips lived full-time with the family and had no other home.

Ms Phillips’ duties included assisting the uncle with his catheter, contacting a doctor if he became unwell, giving the uncle his medication, cooking and shopping.  She was also required to organise and accompany him to his medical appointments. Items required for personal care were paid for and provided by the uncle himself or by Mr Chatfeild-Roberts.

Ms Phillips submitted invoices for her services in the first year, but after that she received payment from Mr Chatfeild-Roberts, without submitting invoices, directly into her bank account. She accounted for her own tax and National Insurance contributions.  On one occasion Mr Chatfeild-Roberts described this payment as ‘salary’.

Mr Chatfeild-Roberts regularly used terms which suggested that the Claimant was his employee, including in written documents. For example, when there was conflict as to whether Ms Phillips should be taking instructions from the uncle, Mr Chatfeild-Roberts stated: ‘… I am your employer and what I say goes’. 

When Ms Phillips’ had time off (which was very rare) she was paid her normal remuneration. Although Ms Phillips arranged that other carers be provided by Universal Aunts to attend to the uncle when she was off, Mr Chatfeild-Roberts paid the agency fees for the replacement carer.

Following a period of jury service, Mr Chatfeild-Roberts began to have concerns about the standard of care provided by Ms Phillips. He terminated the engagement, citing a failure to provide a good standard of care. She brought several claims and it fell on the Employment Tribunal to determine whether Ms Phillips was an employee of Mr Chatfeild-Roberts.

The Employment Tribunal decision

The judge found that:

  • There was mutuality of obligation between Ms Phillips and Mr Chatfeild-Roberts from the start of her engagement (mutuality of obligation is the obligation on an employer to provide work and the obligation on an individual to accept that work). He noted that Mr Chatfeild-Roberts came to rely on Ms Philipps and assumed that she would supply consistent care for his uncle.
  • Ms Phillips was required to provide personal service. He noted that her actions in approaching Universal Aunts to provide a substitute carer were not the same as providing a substitute herself.   
  • She was subject to sufficient control by Mr Chatfeild-Roberts to make him her employer.  In particular, the judge found that the language used in the termination letter indicated that Mr Chatfeild-Roberts considered himself an employer who had control over her performance.

Mr Chatfeild-Roberts appealed the decision.

The EAT decision

The EAT upheld the decision of the first tribunal that the claimant was an employee. This was on the basis that there was mutuality of obligation, a requirement for personal service and a significant degree of control over Ms Phillips’ work.

The EAT noted that there was very limited documentation which could be scrutinised in order to examine the contractual relationship. In fact there was nothing other than the Universal Aunts brochure, which was very confusing as to the employment status of the carers it provided. It stated: "our workers become your employees for their time with you" but also that the carers were "self-employed".

Our comment

The outcome of this case is not surprising as many of the key indicators of employee status are there, namely mutuality of obligation, personal service and control. However, it is a useful case to highlight for two reasons:

  1. we can clearly see the application of the employment status tests to a carer situation; and
  2. we can see that a court will always consider how a contractual relationship actually works in practice.

As the EAT found Ms Phillips was an employee, she is entitled to employee rights, including all the basic ‘worker’ rights (National Minimum Wage, statutory holiday and rest breaks, and pension auto-enrolment) as well as the right to statutory notice, redundancy pay and the right not to be unfairly dismissed. This decision could therefore have significant financial implications for Mr Chatfeild-Roberts and indeed other employers in similar positions.

It is worth noting that a person’s tax position will not automatically be impacted by this employment law decision. This is because a person’s employment status for tax law and employment law can be different (whilst the status of a person for employment law will be indicative, it is not determinative).

However, on the facts, it is possible that HMRC/a tax tribunal could decide that someone in a position like Ms Phillips would be an employee for tax purposes. 

More information about employment status for both tax law and employment law can be found in our website guidance.

(11-03-2019)