Gross Pay and Employment Status

It seems Employment Status features heavily in every update we issue at the moment. Another interesting judgement was published on 10th January, after last September’s hearing.

Is the right to use a substitute consistent with employee status?

Yes, held the EAT, in Chatfeild-Roberts v Phillips & Universal Aunts Limited.

Gross Pay

The Claimant was a live-in carer for the first Respondent's uncle, who was described as "an irascible old man". The second Respondent was an agency which introduced the Claimant to the family. The Claimant had worked for the first Respondent for three years. She had been paid gross, taking care of tax and national insurance herself.

Following the end of the arrangement she brought a number of claims. One of the questions for the tribunal was whether or not she was the first Respondent's employee.

Invoices, Standing Orders and Substitutes

The employment tribunal held that she was. The Claimant had initially been engaged for six months which had been extended, she had stopped preparing invoices and was paid by standing order, and while the second Respondent's carers normally worked on a rota basis, she had not. The tribunal accepted that there was mutuality of obligation, and sufficient control.

On some occasions, the Claimant had approached the second Respondent to arrange a substitute, rather than providing a substitute for herself. The first Respondent appealed.

Following the principle in the Pimlico Plumbers case

The EAT considered the question of substitution (amongst other matters). Substitution had only happened on her days off each week, for a period of jury service, and for periods of annual leave (for which she had also been paid).

Following the principle in the Pimlico Plumbers case, the EAT held that the right of substitution only when a contractor is unable to work can still be consistent with personal performance, and so with employee status.

Worker, Employee or neither?

Judge Martyn Barklem found that: “A live-in carer who had worked for the First Respondent for over 3 years, being paid in full for the limited leave which she took, and having no residence other than the premises in which she carried out her duties, had the status of an ‘employee’ notwithstanding that she was paid gross, and paid tax and NI contributions herself.”

Paul Burton, Head of Employment says "The outcome of the appeal was not surprising, considering the recent Pimlico Plumbers and Uber judgements. It is another warning to employers who believe they have self-employed staff, but due to the nature of the work and the control involved in the relationship there is, in fact, a contract of employment. If you are in a situation where you are unsure about the employment status of any staff please get in touch."


At Frettens, all of our solicitors offer a free initial meeting or chat on the phone to answer your questions. If this article raises issues for you or your business, please call us on 01202 499255 Kate or Paul will be happy to discuss it with you.