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Critical Remark was Wrong
It is not always easy to know if someone is an employee or a worker. And the difference matters because employees enjoy far more rights than workers.
In Cornwall County Council -v- Prater, the Court of Appeal said that someone employed on a series of individual contracts can still be an employee, as long as they can show “mutuality of obligation” for each of them.
Mrs Prater had worked as a home tutor for the council since 1988. The council was not under an obligation to offer her work, nor was she obliged to accept it but she had worked more or less continuously for them from 1988 to 1998.
In 1992, she was given a document, which said that she was "employed by the Education Authority." The council deducted her tax and national insurance at source and at the end of each financial year, she received a P60 form.
In 1998 Mrs Prater successfully applied for a part-time post with the council as a home tutor. She did the same job as before, but became entitled to holiday pay, sick pay and payment for travelling time.
The council accepted that, as from 1 September 1998, Mrs Prater was an employee.
Mrs Prater claimed, however, that each time the council had engaged her to tutor a child from 1988 onwards, she had been working under a series of individual contracts of employment.
She said that the gaps between the contracts constituted “temporary cessations of work" and were bridged by the provisions in section 212 of the Employment Rights Act 1996 (ERA).
The council argued that she had simply been employed as a casual worker on a series of short, fixed term teaching engagements. These did not amount to employment contracts, it said, because she did not have to take the work nor did the council have to offer it. In other words, there was no “mutuality of obligation”.
The tribunal decided, however, that there was because the periods of work were so long and so open-ended. Once Mrs Prater agreed to teach a child, she did so for as long as she felt was necessary. There were no regular reviews.
On that basis, the tribunal distinguished the case from the House of Lords decision in Carmichael -v- National Power f(2000, IRLR 43) in which the periods of work were short, and both parties were aware of that from the outset.
The employment appeal tribunal agreed that each assignment constituted a separate contract of employment.
The Court of Appeal said that Mrs Prater had been engaged on a number of self-contained contracts with the council over the period 1988 to 1998. During that time she was paid to teach individual pupils who could not attend school, for whatever reason.
It reasoned that had she been engaged to teach pupils in a classroom under a single, continuous contract, she would have been an employee. The fact that she was engaged to teach the pupils out of school on an individual basis under a number of separate contracts was irrelevant.
Nor did it make any difference that, after the end of each engagement, the council did not have to offer her another teaching job, and she did not have to accept it.
The important point was that once she entered into the contract, she was under an obligation to teach the pupil and the council was under an obligation to pay her. “That was all that was legally necessary to support the finding that each individual teaching engagement was a contract of service.”
Mangold -v- Helm