Are you self-employed or a Limb (b) worker ? Learn what your rights are. Even if you truly got into a contract as a self-employed worker it does not necessarily mean that you are self-employed person who has no rights whatsoever. Your real working status depends on the nature of services or work you provide for the other party. In most disputes of this nature employers very often protect themselves with written contracts that are not reflecting the real nature of the relationship. When this happens the Employment Tribunals performs a procedure called Purposive approach to interpreting the contract.
Limb (b) analysis consists of two major elements:
•the individual(you) must be obliged to do the work personally (ie to do it yourself—see: Personal service and rights of substitution, below), and
•the person(you) for whom the work is done must not be a client or customer of a business being run by the individual (ie youl must not be in business on your own account—see: Not a client or customer of the individual's business, below)
Because the definition of 'worker' is essentially the same in the various statutory provisions in which it appears, the principles to be derived from case law on the meaning of 'worker' are applicable across the board, irrespective of which particular provision was being construed in a given case.
Personal service and rights of substitution
Personal service is an obligation that a worker is obliged to provide their services or perform a work personally and they cannot pass their duties to someone else e.g their workers. When a written contract of employment exists the Employment Tribunal will assess whether any clause within it, that suggest there was not obligation of personal service is true nature of the relationship between the worker and the other party.
In line with the principles of contract construction, when determining whether there is an obligation to do work personally, the contract must be construed in the light of the circumstances in which it was made. It must be determined whether it was the parties' intention, when the contract was made, that there should be an obligation to perform the work personally. It is not enough that this might have been their understanding or expectation.
For example in the case of Wright v Redrow Homes (Yorkshire) although the contract did have contained some clauses stipulating that the intention of the parties was not to fall within meaning of personal service in reality the was obligation of personal service.
‘’The Court held that despite the wording of certain conditions suggesting the possibility of employing other laborers, the true intention of the parties was for the applicants to provide their personal services as bricklayers’’
Right of substitution
A right of substitution exists if the individual has the right, at their own expense, to arrange for their duties to be performed by another person when they themselves are unable or unwilling to perform the services personally. If that right exists either within a written or oral contract and it is consistent with the real intention of the parties, then the personal service does not exist.
If the individual has the freedom to do their job either by their own hands or by another’s, that is inconsistent with worker status, although (in the words of Lord Wilson in Ready-Mixed Concrete) a limited or occasional power of delegation may not be. In line with the purposive approach described above (see: Purposive approach to interpreting the contract) the right of substitution will only negate the personal service requirement, and stop someone acquiring worker status, if it is genuine. For example:
in Autoclenz, the employer introduced an express written term into the contract allowing substitution, but this was found not to reflect the true agreement between the parties, who in fact did not intend or envisage any such substitution ever occurring, and so the term could be disregarded
in Dewhurst v City Sprint UK, the employment tribunal found that a cycle courier provided personal service (as a worker) despite the presence of a substitution clause in their contract
in Uber v Aslam, there was no question of any driver being replaced by a substitute, and it was not in dispute that they undertook to provide their work personally. The majority in the Court of Appeal held that they were working for Uber as part of its business, rather than there being an agency relationship, despite Uber’s contractual documentation stating otherwise
in Addison Lee v Lange, the Driver Contract (which categorised the driver as an independent contractor) did not entirely reflect the true agreement between the parties. While there was no obligation on a driver to provide their services for a specific number of hours, and no obligation to provide work, once allocated a job the driver was expected to accept it or provide an acceptable reason for refusing, or risk being sanctioned. In those circumstances, and where there was no substitution clause, the EAT held that the driver undertook to do or perform work or services personally
Purposive approach to interpreting the contract
Where a tribunal is trying to determine whether or not a claimant is an employee, it must first establish the true terms of the agreement between the parties; where there is a document or set of documents which appears to be the principal contractual documentation, this will usually be the tribunal's first point of reference.
Construing a commercial contract
Generally, in the commercial context, in order for a court to disregard a plain and unambiguous written term in the contract, it is necessary to show that:
•both parties to the contract in fact intended to agree another term, and
•that intention was in some way outwardly manifested, ie can be proved through evidence of what occurred at the relevant time(s), but
•because of a mistake, the contract inaccurately recorded what was agreed
In those circumstances, a court can grant rectification to 'fix' the contract so that it reflects what the parties truly intended.
If there is a ‘sham’ transaction, the court may ignore the written agreement and base its decision on a finding that the documents did not reflect the agreement between the parties. In the commercial context, in order for there to be a sham, there must be a common intention by both parties to misrepresent the true position to the outside world.
Not a client or customer of the individual's business
Even if you are obliged to do work personally, you will not be a worker if the other party to the contract (for whom you are doing the work) is a client or customer of your profession or business undertaking.
But on the flip side:
Not all those who might properly be described as 'self-employed' are engaged in a business undertaking. In distinguishing between employees, workers and those engaged in a business undertaking of their own, the courts must try to determine whether the essence of the relationship is that of:
a worker, or
an independent contractor who is in business on their own account.
Even if only in a small way in drawing that distinction, the 'dominant purpose' test could in some cases be useful in determining whether the contract was in essence to be located in the employment field, or was a contract between two independent business undertakings
Although there is no test of universal application, it will often be appropriate and helpful to apply the 'integration test', ie to consider whether:
the individual actively markets their services as an independent person to the world in general (which would indicate they are not a worker), or
they are recruited by the principal to work as an integral part of the principal's operations (which would indicate they are a worker)
However, the mere fact that you are engaged in business on your own account does not necessarily exclude you from being a worker. It may be that the work you are doing for the employer is distinct from or unrelated to the business you are running on the side on your own account (eg if the individual has more than one business or outlet for their professional skills).
In other words even if you run other business but for this employer you have been integrated into their business you may still be a worker or employee. More detailed test can be taken here.
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