26 November 2013

The question of employment status is a much litigated one. It is also a fact sensitive one, so one should be wary of over analysing the case law. However, now and again, a case comes along which does provide a useful insight into the relevant tests and how they are likely to be applied in certain circumstances. Halawi, in which the EAT had to consider whether an individual who was not an employee was nonetheless entitled to bring a discrimination claim, is one such case.

Mrs Halawi worked at Heathrow airport selling Shiseido cosmetics. She provided her services through Nohad Limited (her own service company) to a company called CSA, who were effectively an agent supplying workers to Shiseido to work in their retail space at the airport. The Shiseido retail space was controlled by a company called WDF. Mrs Halawi brought a discrimination claim and the EAT had to decide whether Mrs Halawi was “in employment” with either WDF or CSA. In particular, the EAT had to decide whether Mrs Halawi had a “contract personally to do work” with either Respondent. It decided that she did not and so she was unable to proceed with her claim.

The EAT’s decision is interesting for two reasons. Firstly, it is clear from the judgment that, despite the convoluted web of relationships, the correct approach is still to look carefully at the terms of each relationship and how that relationship operated in practice in order to determine the legal status of each relationship. Having done just that, the Tribunal had concluded that there was no “contract personally to do work”. However, Mrs Halawi argued that the Tribunal had applied the wrong test, which leads us to the second point of interest.

Mrs Halawi argued that the requirement for there to be a “contract personally to do work” should be disregarded when deciding whether she was “in employment”. Instead she said that the EAT should look more broadly at whether she was in an “employment relationship” with either Respondent. She also argued that “personal service” was not important, and what mattered was whether she was in a “subordinate” position to the Respondents. The EAT rejected both arguments.

It found no reason to delete or ignore the requirement for there to be a “contract” or “personal service” from the test as to whether someone is “in employment”. Even if it was wrong on that point, the EAT went on to say that, on the facts of the case, Mrs Halawi was not in a “subordinate” position in any event, since there was no obligation on her to personally do work for either Respondent and she was not under their control. For example, she had the ability to get another person to substitute for her and this was a power which she had in fact exercised.

The EAT was left with an “uneasy feeling” that Mrs Halawi may have suffered discrimination but would have no means by which to seek redress. However, businesses with atypical or complex working arrangements in place, such as those involving personal service companies, will be relieved by the outcome. Had Mrs Halawi’s arguments been successful, it could have broadened the scope of discrimination protection to include those without any contract with the end user and without any requirement for the individual to personally do the work.

The starting point, therefore, for determining whether an individual (who is not an employee) is “in employment” for the purposes of discrimination legislation, remains to ask:

1) Is there a contract between you and the individual; and if so,
2) Does that contract place them under an obligation to do the work personally (i.e. without the right of substitution or to subcontract).

If so, then you should expect the individual to be “in employment” and protected against unlawful discrimination.

Halawi v WDFG UK Ltd (t/a World Duty Free) & Anor UKEAT/0166/13

For further information or specific advice please contact Roger Bull.

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Roger Bull

Roger Bull Managing Partner

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  • Employment Disputes
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