What Is "Mutuality Of Obligation" And Why Does It Matter In The World Of Work?

• Published date: 24 June 2021
• Subject Matter: Employment and HR, Contract of Employment, Employment Litigation/ Tribunals
• Law Firm: Reynolds Porter Chamberlain
• Author: Ms Kelly Thomson

Any business which needs work to be done for it makes a choice as to how that work is procured and delivered.

In a free market economy, a business and its work providers are welcome to agree the nature of their relationships but this contractual freedom is balanced against a floor of rights which protect the individual. In the UK, the gateway to those individual workplace rights is framed by establishing a person's particular engagement status - whether as worker or employee. And this is why the cases that come before courts and tribunals are brought by unhappy individual work providers who claim they are entitled to more than their businesses have agreed - or indeed intended - to give them. They want holiday or sick pay, increased wages or employment rights. To do this, they seek to establish themselves as a worker or an employee in opposition to the expressed understanding of the business.

Context

Few will have failed to notice the Supreme Court judgment in February this year, when a group of Uber drivers successfully established their legal status as "workers", despite apparent agreement to the contrary. In so doing, they gained access to rights and payments which Uber believed were unavailable to them.

In the case of Nursing and Midwifery Council v Somerville last month, the Employment Appeal Tribunal looked at this issue again, upholding an earlier decision in which a casual, fee-paying arrangement was held to amount to "worker" status.

Facts

S was a fee-paid panel member on the NMC's Fitness to Practice Committee. The NMC was not obliged to offer S work and he was free to withdraw from work that he had accepted.

An earlier employment tribunal held that S was not an "employee" (and thus unable to benefit from a right not to be unfairly dismissed or to statutory sick pay amongst other employment rights). This was because of the lack of any "mutuality of obligation" between the NMC and S i.e. an obligation on it to provide work and on him to accept it. However, S succeeded in his claim of "worker" status instead, giving him the right to paid holidays.

The NMC appealed.

Key Issues

The EAT considered the well-established legal framework for worker status:

1. That there must be a contract between business and work provider;
2. This contract...