Are Written Terms Relevant for Employment Status?

Yes, found the Employment Appeal Tribunal (EAT)l in Ter-Berg v Simply Smile Manor House Ltd and others [2023] EAT 2. The EAT found that the Employment Tribunal has erred in not starting their analysis of whether the Dr Ter-Berg (The Claimant) was an employee by considering the terms of a written agreement. 

The Claimant was a dentist under an agreement which was a standard form of contract produced by the British Dental Association. The Claimant was defined as a ‘performer’ and stated that he was not an employee and there was no employment relationship. Under the contract the Claimant was required to perform certain obligations. For example, paying part of his fees and completing a number of dental activities a year. Additionally, there was a substitution clause stating that if the Claimant didn’t utilise Simply Smile Manor House Ltd (the Respondent)  for 20 days he had to find a locum.

The Claimant was claiming that he was unfairly dismissed as a result of raising a protected disclosure. The Claimant acknowledged that initially he was employed as a self-employed contractor however, overtime, their professional relationship had developed into an employee-employer relationship. The Claimant contended that he was an employee due to mutuality of obligation, full integration into the Respondent, exercise of control and requirement to provide personal services.

The Claimant sought to argue that the tribunal had erred in starting with reading the contract to determine whether he was an employee. However, the EAT found that the Employment Tribunal had not erred and that when analysing employment status, the contract should be used as a starting point. Where is it claimed that the written agreement does not reflect the reality of the employment relationship

However, the EAT did find that the tribunal had erred when interpreting the meaning of the substitution clause. The EAT found that the clause did not allow for the Claimant to substitute his personal service at any time, but rather only in circumstances confirmed in the agreement. Whilst it agreed with the Claimant on this point of his appeal, the EAT upheld that tribunal’s decision that the Claimant was not an employee.

This decision confirms that contractual terms are relevant, though not determinative. Therefore, when drafting employment contracts, employers should ensure that the agreement reflects the true nature of the employment relationship and if the employment relationship changes this is documented. 

If you need expert employment law representation or advice on your contractual terms of employment, contact us at info@chadwicklawrence.co.uk or call us at 0800 015 0340.