Recent employment law decisions have focussed on worker and employee status, often in relation to the gig economy. Trends towards more flexible forms of working have stretched the Tribunals trying to balance the rights of workers with economic demands.
More than ever, the importance of clear and strict wording in employment contracts is becoming critical as workers seek to challenge their rights and obligations.
The case of Hafal Ltd v Lane-Angell
The Claimant in Hafal Ltd v Lane-Angell was engaged as a bank worker, supporting people with mental health issues when detained at police stations. Her contract provided that the company would “use your services as and when they are required and if you are available.”
She sought to argue that, notwithstanding this, there was sufficient mutuality of obligation (the duty on the employer to provide work and on the employee to accept work) to mean that she was an employee, even during the periods when she was not working. She succeeded with this argument at Tribunal, but the Employment Appeal Tribunal (EAT) disagreed.
Check your contract
The EAT re-emphasised the importance of starting with the contractual documents and focussing on those. Recently Tribunals have been willing to imply terms into the contract to find there to be employee status, even where those contradict the express terms, thereby increasing the protections available to those individuals.
Here, the EAT found the terms in Miss Lane-Angell’s contract to be unambiguous; the phrase quoted above negated any mutuality of obligation. In the absence of anything suggesting the contract was a sham, a term should not be implied if it contradicts the express terms.
What this case means
This case demonstrates that a well-drafted contract between a company and their employee, worker, or sub-contractor, provided at the outset, is vital to protect the company from disputes at a later stage.
The contract should make clear the legal basis on which the parties are contracting; it should also seek to reflect the factual circumstances as to how the individual arrangement will work in the real world, to minimise the risk of arguments that the contractual documentation is a sham.