Employment Status

The Employment Appeal Tribunal has handed down its decision in Staffordshire Sentinel Newspapers Ltd v Potter (HHJ Peter Clark, argument 18th March 2004).

It confirms that an "irreducible minimum" for there being a contract of employment is personal service. Following Express & Echo Publications v Tanton [1999] ICR 693, CA, the EAT held that a provision in Mr Potter's contract that he be entitled to substitute "a suitable person" to perform his duties, whenever he wanted, was fatal to him accruing status as an employee.

Note that other cases have held that such a provisions is not necessarily conclusive. Thus in MacFarlane v Glasgow City Council [2001] IRLR 7, it was held that a gym instructor whose contract provided he could select a substitute from a list pre-approved by the gym did not cease to be an employee because of that provision. A similar result was reached in Byrne Brothers (Formwork) Ltd v Baird [2002] IRLR 96.

The position therefore appears to depend on the extent of the substitution clause. If the worker has an unfettered discretion to appoint a substitute, he cannot be an employee. If he has a heavily fettered discretion, or requires the employer's approval, the substitution clause will not prevent him from accruing employee status.