Employment Law Advocates

The Supreme Court has now given judgment in Jivraj v Hashwani, a case which I first discussed here. The decision of the Court of Appeal has been overturned, which comes as no great surprise. It may be as a result of this, and the fact that the case is strictly speaking a commercial law case, that it has received rather little attention so far from employment law commentators. However, as well as allowing those who use the services of arbitrators to breathe a sign of relief, the judgment also provides some important clarification as to the circumstances in which people are employees for the purposes of the discrimination statutes.

In determining whether someone is engaged under a contract of employment, which is necessary to claim unfair dismissal, for example, an important part of the test has always been whether there is a relationship of control between the parties. Although control is no longer determinative of the issue, a high degree of control is considered to make it more likely that a contract of employment exists. However, for the wider definition of an employee in discrimination law, the issue of control has historically been given little weight, with the key issue being whether there is a contract personally to do work. If a person cannot send a substitute to do work in his place, he or she is likely to be entitled to bring a discrimination claim, even if the level of control over him or her is relatively low.

There has been a rarely used caveat, provided by the Court of Appeal in Mirror Group v Gunning, that personal service must be the dominant purpose of the contract. This concept was developed by the Employment Appeal Tribunal in James v Redcats, although it was not particularly clear what factors should be taken into account in determining what the dominant purpose of the contract is.

In Jivraj, the Supreme Court disapproved this approach, although it suggested that it could be helpful in some cases. Instead, it focused upon the European authorities, particularly the decision of the European Court of Justice in Allonby v Accrington and Rossendale College. In paragraph 68, the ECJ stated that the definition of employee excludes “independent providers of services who are not in a relationship of subordination with the person who receives the services”.

This emphasis on the presence or absence of a relationship of subordination brings control back into the equation and, indeed, Jivraj was decided on that basis. Arbitrators were found not to be subject to employment discrimination law because they are in a dominant rather than a subordinate position in relation to the parties who use their services, in part because they have complete control over the proceedings once they have been appointed to determine a dispute.