Introduction

The case of Nursing and Midwifery Council (NMC) v Somerville ([2022] WLR(D) 101) brought to the fore a critical examination of worker status under regulation 2(1) of the Working Time Regulations 1998 ("the Regulations"). Central to this appeal was whether Mr. Somerville, appointed as a panel member and chair of the NMC's Fitness to Practise Committee, qualified as a "worker" entitled to unpaid holiday pay under the Regulations. The dispute revolved around the nature of the contractual relationship between Mr. Somerville and the NMC, specifically whether there existed an "irreducible minimum of obligation" necessary for worker status.

The parties involved were Mr. Somerville (the claimant) and the Nursing and Midwifery Council (the respondent). Mr. Somerville's role involved undertaking hearings, for which he was compensated, yet the flexibility to refuse or cancel hearing dates raised questions about the existence of mutual obligations typically associated with worker status.

Summary of the Judgment

The Employment Tribunal originally found Mr. Somerville to be a "worker" under regulation 2(1)(b) of the Regulations, emphasizing the existence of an overarching contract and individual agreements for each hearing. The NMC appealed this decision, contending that there was no "irreducible minimum of obligation"—a fundamental requirement for worker status—since Mr. Somerville could refuse or cancel assignments without penalty.

The Employment Appeal Tribunal (EAT) upheld the Tribunal's decision, rejecting the NMC's arguments. The EAT clarified that an "irreducible minimum of obligation" is not a prerequisite for worker status as per regulation 2(1)(b). This stance was further reinforced by referencing the Supreme Court's decision in Professional Game Match Officials Ltd v Revenue and Customs Commissioners [2021] STC 1956 (the PGMOL case), which affirmed that the ability to withdraw from assignments does not negate worker status.

The NMC sought to appeal the EAT's decision, raising two main grounds: the necessity of an "irreducible minimum of obligation" and the irrelevance of the existence of a contract concerning worker status determination. The Court of Appeal dismissed the NMC's appeal, maintaining that the Tribunal's findings were consistent with established legal principles and that the absence of a model obligation to accept work does not preclude worker status when individual contracts for services are present.

Analysis

Precedents Cited

The judgment extensively referenced significant case law to substantiate its reasoning:

• Uber BV and others Aslam [2020] ICR 657: Addressed the classification of drivers as workers, emphasizing that the presence of overarching contracts does not negate worker status even if individual assignments lack mutual obligations.
• Professional Game Match Officials Ltd v Revenue and Customs Commissioners [2021] STC 1956 (PGMOL case): Highlighted that the ability to withdraw from assignments does not disqualify an individual from being considered a worker, as long as there are contractual obligations during periods of engagement.
• Nethermere (St Neots) Ltd v Gardiner [1984] ICR 612: Established the concept of an "irreducible minimum of obligation" necessary for worker status.
• Carmichael v National Power plc [1999] 1 WLR 2042: Approved the principle that worker status requires some level of obligatory work irrespective of overarching contracts.
• James v Redcats (Brands) Ltd [2007] ICR 1006: Reinforced that gaps in employment contracts do not preclude worker or employment status during periods of active engagement.

Legal Reasoning

The Court's analysis centered on interpreting regulation 2(1)(b) of the Working Time Regulations 1998, which defines a "worker" as someone who performs services personally under a contract that does not classify the other party as a client or customer. The key elements identified were:

• The existence of a contract—either express or implied.
• An undertaking by the individual to perform work or services personally.
• The other party not being a client or customer of the individual's business.

The Court rejected the NMC's assertion that an "irreducible minimum of obligation" is essential by distinguishing between overarching contracts and individual assignment contracts. It clarified that worker status can be established based on individual contracts for services, even if there is no continual mutual obligation to offer or accept work under an overarching contract. The decision emphasized that flexibility in accepting assignments does not inherently negate worker status, provided that contractual obligations exist during the actual performance of services.

Additionally, the Court dismissed the argument that the existence of a contract is irrelevant by underscoring that having a legally enforceable contract is fundamental to determining worker status. The Tribunal's approach of assessing the nature and obligations of both overarching and individual contracts was deemed appropriate and consistent with legal precedents.

Impact

This judgment has significant implications for professional regulatory bodies and similar organizations that engage individuals on flexible, assignment-based contracts. Key impacts include:

• Clarification that worker status can be achieved through individual service contracts even without overarching employment obligations, thereby extending protections such as paid annual leave to a broader range of workers.
• Reinforcement of the principle that flexibility in work arrangements does not automatically exclude worker status, provided that there are enforceable contractual obligations during engagements.
• Implications for structuring contracts to ensure clarity in the nature of the working relationship, particularly distinguishing between independent contractors and workers to align with statutory protections.
• Potential for increased claims by individuals in similar roles seeking worker status and the associated benefits under various employment regulations.

Furthermore, the decision reinforces the judiciary's stance on interpreting worker status in light of actual contractual practices rather than solely formal contract terms, promoting a more pragmatic and equitable application of labor laws.

Complex Concepts Simplified

Worker Status under Regulation 2(1)(b)

Under regulation 2(1)(b) of the Working Time Regulations 1998, a "worker" is someone who has a contract to perform work personally for another party that is not their client or customer. This includes both employees and certain self-employed individuals. The key aspects are:

• Contractual Obligation: There must be a contract, whether written or implied, that sets out the terms of engagement.
• Personal Service: The individual must agree to perform the work personally, not delegating it to someone else.
• Non-Client Relationship: The party providing the work services to is not a client or customer as defined within the individual's professional or business undertaking.

Irreducible Minimum of Obligation

The term refers to a foundational level of mutual obligation in a working relationship. For a contract to classify someone as a worker under regulation 2(1)(b), there must be at least a minimal requirement for the worker to perform some work and for the employer to offer some work. However, this case clarified that while such an obligation is relevant during active engagements, it does not require constant, ongoing mutual obligations under overarching contracts.

Overarching Contracts vs. Individual Assignments

An overarching contract governs the general relationship between two parties, outlining broad terms and conditions without mandating specific, ongoing tasks. In contrast, individual assignment contracts pertain to specific engagements or tasks. The distinction is crucial in determining worker status, as overarching contracts may not, on their own, satisfy the criteria for worker status if they lack specific mutual obligations for work.

Conclusion

The Nursing and Midwifery Council v Somerville decision serves as a pivotal reference in delineating the boundaries of worker status under the Working Time Regulations 1998. By affirming that the absence of an overarching mutual obligation does not preclude worker status provided individual service contracts exist, the judgment broadens the interpretation of who qualifies as a worker. This ensures that individuals engaged on flexible, assignment-based terms receive protections against exploitation, such as entitlement to paid annual leave, even in non-traditional employment arrangements.

Moreover, the case underscores the judiciary’s role in adapting legal interpretations to contemporary work structures, balancing organizational flexibility with the protection of workers' rights. Organizations must carefully structure their contractual relationships to align with legal definitions, ensuring compliance and safeguarding against potential disputes over worker status. For workers, the decision provides assurance that their contributions under varying contractual frameworks can afford them essential employment protections.