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Case confirms providing a substitute does not prevent personal service and an employee relationship

Written by Brabners LLP


As you will know, there are different types of employment status here in the UK – employees, workers and self-employed individuals. Individuals with “employee” status have the greatest employment law protection here. 

Even if two parties name the relationship something different – for example, self-employed consultancy arrangement – this is not definitive when deciding whether the individual is, in fact, an employee or not. The courts will also consider the practical side of the relationship and relevant factors linked to this. Often, it is thought that if an individual providing services have the right to provide a substitute then the individual would not be an employee. However, cases are emerging which confirm that isn’t always the case! 

In the recent case of (Chatfield-Roberts v Phillips & Universal Aunts Limited (UKEAT/0049/18) for example, the Employment Appeal Tribunal (“EAT”) recently found that an individual’s right to use a substitute did not prevent the Claimant from being an employee and found that she was entitled to employment rights.   This article will look at some of the factors taken into account in that case and the important learning points for those engaging or providing what they believe are self-employed services.

The Law

There is a legal definition of an “employee”, which can be found under section 230 of the Employment Rights Act 1996. Case law has also provided guidelines to help determine whether an individual has “worker” or “employee status”.

The key case of Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] and Byrne Brother (Formwork) Ltd v Baird and others [2002] established that the following elements are key in determining an individual’s employment status: (i) existence of a contract; (ii) personal service, (iii) that the other party is not the customer or client of any business undertaking or profession carried out on by the individual; and (iv) mutuality of obligation.

The case of Chatfield-Roberts below considers some of the elements outlined above in more detail and other relevant factors such as control. 

Facts of the case

From June 2013, the Claimant worked as a live-in carer for the First Respondent’s uncle (“the Colonel”). The Claimant was introduced to Mr Phillips (the First Respondent in the case) by a recruitment business (the Second Respondent in the case). 

The Claimant had previously been introduced by the recruitment business to work for a number of clients. The recruitment business usually implemented a rota system whereby carers would move placement every 3-4 weeks. However, Mr Phillips and his sister wanted an individual to provide care for the Colonel for a minimum of 6 months and the Claimant took on this position. When the Claimant needed time off from the work placement (i.e. to accommodate her days off, annual leave and jury service), a substitute was provided in her place. However, the basis of the relationship lacked some clarity from the outset. 

On 6 August 2016, the Claimant was issued with a letter of termination. She brought a number of claims against both of the Respondents, including unfair dismissal, holiday pay, notice pay and arrears of pay. The Claimant asserted that she was an employee and entitled to bring these claims as a result. As part of its decision-making process, the Employment Tribunal had to decide whether or not the Claimant was an employee.

The Tribunal dismissed the claim brought against the recruitment business. The Employment Judge found that once they had introduced the Claimant to the client and a fee was paid, their relationship with the Claimant had ended.

With regard to the relationship between the Claimant and Mr Phillips, the Tribunal found that the Claimant had employee status. The Tribunal found that a number of elements that apply to employees (as outlined in case law) were met here, including for example that the Claimant was required to provide her work services personally. It was noted that replacement carers only worked for Mr Phillips on the Claimant’s days off or when the Claimant could not work.   

It was also found that: (a) mutuality of obligation was found to have existed from the start (there was little to no discussion about the Claimant’s future / other work commitments) and Mr Phillips had come to rely on the Claimant’s services; and (b) there was an element of control in Mr Phillips’ relationship with the Claimant, which was exemplified by the language used in the termination letter sent to the Claimant.

The Tribunal found that the Claimant was an employee and upheld certain claims she had brought.  The decision was appealed.

EAT’s Decision

On appeal, the EAT upheld the Tribunal’s decision. The Employment Judge confirmed that the Tribunal made no error of law in finding that the Claimant was an employee of Mr Phillips.

Of particular importance in reaching the conclusion on the Claimant’s status, Employment Judge Barklem quoted an extract from the case of Pimlico Plumbers Limited & Mullins v Smith [2017] in considering the Claimant’s right of substitution: “a right of substitution only where the contractor is unable to carry out the work will, subject to any exceptional facts, be consistent with personal performance”. This needs to be borne in mind for those providing or receiving what they believe are self-employed services moving forwards. The right of substitution alone is not sufficient to mean personal service does not exist or prevent them being considered an employee.

Learning points

This case is a reminder of the difficulties with assessing employment status and the need for change in this area. Whilst we understand that changes are being considered by the government, this is taking time. In the meantime, those engaging self-employed individuals need to be mindful of these case developments and of the amount of control exerted over individuals who they are engaging. Otherwise, it is more likely that claims could be brought and employment protections upheld against them.

Similarly, for those providing self-employed services, this case shows that consideration should be given to clearly defining the relationship and the arrangements (including appropriate boundaries and use of substitutes) at the outset. With the impending proposal to extend the public sector IR35 rules to the private sector, which is likely to have complex tax implications and changes to individuals’ contractual terms and pay rates, it is a good opportunity for them to now consider existing working arrangements and to make any changes needed to the same.


This bulletin is for general guidance purposes only and should not be used for any other purpose. Brabners is a Limited Liability Partnership