Status case: Sejpal v Rodericks

We consider a recent Employment Appeal Tribunal (EAT) case, Sejpal v Rodericks Dental Ltd [2022] EAT 91, which looks at the issue of status, and focuses on whether a dentist had the status of being a worker.

The law

For an individual (A) to be a “worker” for another (B), pursuant to section 230(3)(b) of the Employment Rights Act (ERA) 1996:

1. A must have entered into or work under a contract with B.
2. A must have agreed to personally perform some work or services for B.
3. However, A is excluded from being a worker if:
   • A carries on a profession or business undertaking; and
   • B is a client or customer of A’s by virtue of the contract.

Why is it important if someone is a worker? Once an individual is a worker, they gain a whole host of legal (statutory) protection which, although not the same or as good as having employee status, protects them from, for example, discrimination under the Equality Act 2010, provides them with national minimum wage rights and entitlements under the Working Time Regulations 1998, such as annual leave.

The facts

In Mrs Sejpal’s case, she was a dentist working for dental practices owned by Rodericks Dental Ltd (RDL) and was working at the Kensington practice when she went on maternity leave. RDL closed the Kensington office and redeployed other staff but not Mrs Sejpal. She therefore claimed that her contract was terminated because of pregnancy or maternity discrimination, and referred to sex discrimination. But was she a worker and therefore able to make such claims? The Employment  Tribunal decided she was not and highlighted there was “insufficient mutuality of obligation”.

Mrs Sejpal appealed and the EAT held that the Employment Tribunal had not needed to focus on the mutuality of obligation as there was a clear contract in place, called an “Associate Contract”. The EAT emphasised the need to focus on the statutory test, stating, “the starting point, and constant focus, must be the words of the statutes”, and then look at the reality of the situation.

Further, just because the contract is not a sham does not mean that its wording applies and reflects the true nature of the relationship. As was stated in this case, “the employment tribunal considered that a ‘contract for services’ was inconsistent with worker status. That is incorrect, because a worker can be self-employed, provided that they do not carry on a profession or business undertaking of which the other party to the contract is a client or customer.”

The EAT highlighted that, on looking at test 1 above, there was a contract.

Moving to test 2, some personal service was required. The substitution clause in the contract was clearly fettered even if RDL alleged it was an unfettered right to substitute.

As to test 3, the EAT remitted this question back to the tribunal but noted the concepts of control, integration and subrogation were potentially relevant in assessing the test of whether Mrs Sejpal carried on a “profession or business undertaking” and whether RDL was a “client or customer” of Mrs Sejpal’s.

The point to note from this case is to focus on the statutory tests, which has been highlighted in previous case law, and then use concepts such as “mutuality of obligation”, “irreducible minimum”, “umbrella contracts”, “substitution”, “predominant purpose”, “subordination”, “control” and “integration” as tools when trying to answer those tests. Further, it is important to examine whether professionals such as dentists are genuinely self-employed.

Although the judge in this case stated “Worker status has come to be seen as contentious and difficult. But the dust is beginning to settle.”, employers and practitioners alike would welcome more certainty.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.