Mutuality of Obligation

The Court of Appeal in Secretary of State for Justice –v- Windle and Arada had to decide whether account should be taken of the absence of mutuality of obligation when deciding whether an individual was an employee for the purposes of the Equality Act 2010.

The Claimants were professional interpreters for HMCTS.  They worked on a case by case basis and were self-employed for tax purposes and did not receive holiday or sick pay.  They raised claims against the Secretary of State for Justice for racial discrimination.  The Employment Tribunal dismissed the claims on the basis that they were not employees for the purposes of the Equality Act 2010 as there was no obligation on the Claimants to accept any assignment.

Therefore there was a lack of mutuality of obligation.

The EAT disagreed and overruled the decision which was then appealed up to the Court of Appeal.

The Court of Appeal has now held that the Employment Tribunal was correct from the outset.

Although the mutuality obligation between the parties was not a precondition for the definition of employment, it was a factor capable of shedding light on the nature of the relationship and in this particular case the individuals were held not to be employees.

However, as we have pointed out previously, cases such as these turn entirely on their facts, and as always employers should be very careful about the status of their workers as far too often employers hold individuals not to be employees when in fact for all intents and purposes that is exactly how they are treated.

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