Employment status: EAT confirms approach

The determination of employment status has been made clearer as the EAT confirms its approach.

The EAT has provided useful guidance on the approach to determining employment status in Plastic Omnium Automotive Ltd v Horton. Mr Horton was engaged by Plastic Omnium via a written contract with his service company, ProMan Design Limited. The contract did not allow for a right of substitution (although this did happen in practice), but did state that Mr Horton was not an employee and that he’d receive no payment for holiday, sickness or other absence.

Mr Horton worked regular hours for Plastic Omnium, attended training days and was treated the same as other programme managers. He was given a laptop, access card, email address, and was able to request holiday, for which he paid a ‘daily fee’.

However, he did not have to clock in or out the way employees did, he didn’t have appraisals and he was paid by his company – ProMan Design Limited – submitting invoices. He would then draw dividends and a salary from his company.

The Employment Tribunal originally found that Mr Horton was a worker of Plastic Omnium Automotive Ltd and not a self-employed contractor because he was fully integrated into Plastic Omnium’s business and acting as a subordinate.

However, the EAT found that Mr Horton was self-employed. The EAT drew attention to the importance of first considering the contract between parties, making careful findings of fact, and only then deciding how much weight to give factors such as subordination which might suggest worker status.  A presence of subordination and dependency did not mean other key factors – such as contract terms – should be ignored.

What should I do?

This case serves as a reminder that when assessing worker status, the starting point should be the contract between the parties. Only then should other factors, such as subordination, be considered, and that they do not overshadow contract terms.

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