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Issue 109 (March 2006)

Contents

In the news
Regulating disputes
Causing a commotion
Unity is strength
Out clubbing
Equally valued
Holiday blues
Life on the ocean wave

Holiday Blues

The Working Time Regulations give workers the right to four weeks' paid annual holiday. But who exactly is a worker?

In Bacica v Muir (2005, IRLR 35), the employment appeal tribunal (EAT) has said that just because someone does the work themselves, it does not make them a worker.

What were the basic facts?

Mr Muir started work for Mr Bacica as a painter and decorator in August 2003. He used his own paint brushes, but Mr Bacica supplied the rollers, paste tables and wallpaper. Mr Muir was required to do the work himself.

He worked under the Construction Industry Scheme Regulations (CIS) whereby tax was deducted from his earnings, but he paid his own National Insurance contributions. He also worked, at times, as a private hire taxi driver and did other private work and had a set of accounts prepared for him every year.

Mr Muir made a claim for unpaid holiday pay, arguing that he was a "worker" within the meaning of the Working Time Regulations and therefore entitled to paid annual leave.
And the employment tribunal agreed, on the basis that Mr Muir had to do the work personally.

What did the parties argue on appeal?

On appeal, Mr Bacica argued that:

What does the law say?

Under the Working Time Regulations (WTR), "workers" are entitled to holiday pay. But to satisfy the definition, they must work under a contract and do the work themselves for someone who must not be a client of a business that they run. This is to exclude the self-employed.

In the case of Redrow Homes (Yorkshire) Ltd v Wright (LELR 93), the Court of Appeal held that contract bricklayers who undertook personally to perform work or services for the company were "workers" within the meaning of the regulations.

What did the appeal tribunal decide?

The EAT, however, said that it "cannot be correct to suggest that the mere rendering of a service personally makes a person a 'worker'. To do so is to ignore the last clause in the definition which makes it clear that if a person renders services or performs work on the basis that the person to or for whom he does so is a customer of his business, he is not then to be regarded as a worker."

This meant, the EAT concluded, that Mr Muir was carrying on a business on a self-employed basis. He had a CIS certificate, had business accounts prepared and submitted to the Inland Revenue, he was free to work for others, was paid at a rate which included an overheads allowance and was not paid if he didn't work.

The EAT concluded therefore that all these factors indicated that Mr Muir was, in fact, running a business and that the work he performed for Mr Bacica was one of his business activities. The fact that the work was performed by him personally was irrelevant. He was not, therefore, entitled to holiday pay.