In Plastic Omnium Automotive Ltd v Horton the EAT looked at the constituent parts of the requirements for someone to be a worker (as opposed to an employee or self-employed) and held that an individual who provided services via a service company was not a worker under the relevant section of the Employment Rights Act. The tribunal had found that the individual was not an employee, but a worker. The putative employer argued that he was neither.
There was a written contract between the claimant’s service companies and Plastic Omnium for the provision of the claimant’s services to it. There was no provision for a substitute. The claimant provided services under these successive agreements to Plastic Omnium for over eight years, during the entirety of which he was fully integrated into the business.
The individual was a program manager and treated much the same as other programme managers who were directly employed. He had a company laptop, access to the company premises, attending training days alongside the company employees and had the same level of autonomy whilst providing services as directed by the company. Plastic Omnium had at one point asked if he would become an employee and be directly employed but he had refused. Periodically the parties had reviewed the agreement and there was no suggestion that it did not accurately reflect the position in practice.
The claimant alleged that he was an employee, or alternatively a worker, of Plastic Omnium, and thus entitled to holiday pay. An employment tribunal found that the written agreement reflected the true agreement between the parties and held that the claimant was not an employee. However, the tribunal held that he was a worker, having identified that the issue was whether Plastic Omnium was a client or customer of the claimant’s service companies and concluded that he was “clearly subordinate and dependent”. Plastic Omnium appealed.
The statutory definition of a worker is:
- There must be a contract between the worker and the putative employer, whether express or implied.
- The contract must require personal service.
- The other party to the contract is not the customer or client of any business undertaking or profession carried on by the individual.
The EAT held that the tribunal had not looked at the crux of this case which was that the contract was not between the claimant and the putative employer, Plastic Omnium, but was between the service companies and Plastic Omnium. While whether Plastic Omnium was a client or customer of the claimant’s business was relevant, this should be determined after the contractual issue was addressed.
Since the tribunal had found that the contract was between the claimant’s service companies and Plastic Omnium, and reflected the parties’ true agreement, the EAT concluded that there was only one legally correct outcome; and allowed the appeal, substituting a finding that the claimant was not a worker.