Was a self-employed live-in carer supplied by an agency an employee of the client

The EAT has upheld the decision of an employment tribunal that a live-in carer was an employee of the client even though she contributed to tax & NI.

What is an employee?

A tribunal will consider, amongst other things, the following key questions when deciding if someone is an employee:

• Does the individual have to provide personal service (or can they send someone else to do the work when they are unwilling to do it)?
• Is there "mutuality of obligation": an obligation on the employer to provide work and an obligation on the individual to accept it?
• Does the employer control to a high degree what work is done and how it is carried out?

A tribunal will consider the reality of the working arrangements to answer these questions where there is no clear documentation setting out the identity of the employer and/or the employment status of the individual, or where the documents which do exist are found not to reflect the intentions of the parties.

The case examined below explored just such an undocumented arrangement where a carer was introduced by an agency but paid and controlled by a family member of the person being cared for.

Case: Chatfeild-Roberts v Phillips and Universal Aunts Ltd

Ms Phillips worked as a live-in carer for a retired colonel for a total of three years. She was introduced to Mr Chatfeild-Roberts, the colonel's nephew, by Universal Aunts Ltd, an agency supplying carers.  The colonel paid for her services for the first year. It was then decided that Mr Chatfield-Roberts would pay for Ms Phillip's services, given that it was anticipated that he would be a beneficiary under the colonel's will.

Universal Aunts' brochure was confusing as to the employment status of the carers. It stated: "our workers become your employees for their time with you" but also that the carers were "self-employed".

Usually, carers worked only for short periods and moved every 3 or 4 weeks to a new client.  However, in the case of the colonel, the family wanted to have consistency of care and asked that she work with him for at least 6 months. 

The claimant's duties included assisting the colonel with his catheter, contacting a doctor if he became unwell, giving the colonel his medication, cooking and shopping.  She was also required to organise and accompany him to his medical appointments. Items required for personal care were paid for and provided by the colonel himself or by his nephew.

Mr Chatfield-Roberts regularly used terms which suggested that the Claimant was his employee.  For example, when there was conflict as to whether Ms Phillips should be taking instructions from the colonel, Mr Chatfeild-Roberts stated: "I am your employer and what I say goes".  He also expressed dissatisfaction when Ms Phillips undertook tasks on her own initiative.

On the claimant's day off, when she took leave, and when she was on jury duty for a period, other carers provided by Universal Aunts attended on the colonel. In order to guarantee that cover could be provided, Mr Chatfield-Roberts paid an agency fee of £125 per month. The claimant made arrangements for this cover but it was Mr Chatfield-Roberts who paid the substitute carers.

The claimant submitted invoices in the first year, but after that she received payment from Mr Chatfield-Roberts, without submitting invoices, directly into her bank account.  The claimant accounted for her own tax and national insurance contributions.  On one occasion Mr Chatfield-Roberts described this payment as "salary".

The Claimant rarely took holidays but when she did she was paid her normal remuneration.  Mr Chatfield-Roberts stated that these payments were as a gesture of goodwill. 

Following the period of jury duty, Mr Chatfield-Roberts began to have concerns about the standard of care provided by Ms Phillips.  He terminated the engagement, citing a failure in her obligations to provide a good standard of care. 

The employment tribunal decision

The Claimant brought a claim of unfair dismissal to an employment tribunal.  As a preliminary matter, the tribunal considered whether she was an employee or worker of the agency and/or Mr Chatfeild-Roberts. It found that she was not an employee or a worker of the agency but was an employee of Mr Chatfeild-Roberts.

The employment judge found that there was mutuality of obligation between the claimant and Mr Chatfeild-Roberts from the start of her engagement. In other words, there was an obligation for the employer to provide work and for the employee to accept it.  He noted that Mr Chatfield-Roberts came to rely on the claimant and assumed that she would supply consistent care for his uncle.

The judge found that the claimant was required to provide personal service. He noted that the claimant's actions in approaching Universal Aunts to provide a substitute carer were not the same as the claimant providing a substitute herself.    

Ms Phillips was subject to control by Mr Chatfeild-Roberts sufficient to make him her employer.  The judge found that the language used in the termination letter indicated that Mr Chatfield-Roberts considered himself an employer who had control over the Claimant's performance. 

The EAT decision

The EAT upheld the decision of the tribunal that the claimant was an employee. This was on the basis that there was mutuality of obligation, a requirement for personal service and a significant degree of control over the claimant's work.

On appeal, the EAT noted that there was very limited documentation which could be scrutinised in order to examine the contractual relationship.  In fact there was nothing other than the Universal Aunts brochure.  The employment judge therefore had to make findings from evidence put before the tribunal by the parties, including written correspondence between them and witness evidence. 

Although being able to send a substitute to do the work is a marker of self-employment, the EAT agreed that, in this case, the claimant was not providing the substitute. While Ms Phillips made the call to the agency, it was Mr Chatfeild-Roberts and not the claimant who had the standing cover arrangement with the agency, paid the agency fee and paid the replacement carers.

The EAT noted that the level of control exercised by Mr Chatfeild-Roberts decreased over time as he came to trust the claimant, but this did not detract from the finding of control made by the employment tribunal.  The EAT commented that an employee whose duties are decreasingly supervised because she is increasingly trusted should not thereby lose her employment status.

Comment

The outcome of this case is not surprising as it follows the recent trend of case law in finding employment status where there is an expectation that work will be provided and accepted, personal service and a high degree of control. However, it is an interesting application of the employment status tests to a case involving a live-in carer.

People who directly engage carers introduced to them by an agency should note that they may become the employer of the carer, particularly if there is no employment relationship between the agency and the carer. It is advisable to have in place clear written documents setting out the intentions of the parties and not to assume that a carer is self-employed or the employee of the agency. It is of course when things go awry in the relationship that carers may claim employee rights, including the right to statutory notice, redundancy pay and the right to be fairly dismissed or workers' rights, including National Minimum Wage, statutory holiday and rest breaks, and pension auto-enrolment.