The Hospital Medical Group Ltd v Westwood
| Jurisdiction | England & Wales |
| Judge | Lord Justice Maurice Kay,Lord Justice Longmore,Lord Justice Toulson |
| Judgment Date | 24 July 2012 |
| Neutral Citation | [2012] EWCA Civ 1005 |
| Date | 24 July 2012 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A2/2011/2529 |
[2012] EWCA Civ 1005
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
JUDGE PETER CLARK
UKEAT/023211LA
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Maurice Kay, Vice President of the Court of Appeal, Civil Division
Lord Justice Longmore
and
Lord Justice Toulson
Case No: A2/2011/2529
Mr Patrick Green QC and Mr J Williams (in place of Ms Kathleen Donnelly) (instructed by The Wilkes Partnership LLP) for the Appellant
Mr Simon Gorton QC (instructed by SAS Daniels LLP) for the Respondent
Hearing date : 10 July 2012
The statutory protection of employment rights is not provided on a uniform basis. Some rights are conferred only on "employees" who are individuals who have entered into or work under a contract of employment. The right not to be unfairly dismissed is so limited. Other rights are conferred on a wider category of "workers", who include but are not limited to employees. This wider category is protected by, among other things, the statutory control of deductions from wages (Part 2 of the Employment Rights Act 1996), the National Minimum Wage Act 1998, The Working Time Regulations 1998, The Public Interest Disclosure Act 1998 and The Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000. The precise terms of extended definitions are not always the same. For example, Part 5 of the Equality Act 2010 applies to "employment" but that concept is defined to include not only employment under a contract of employment but also employment under "a contract personally to do work": section 83 (2)(a). Employment tribunals spend a great deal of time taxonomising borderline cases in all these areas.
The employment rights remaining in issue in the present case relate to unlawful deductions and holiday pay. Their catchment is "workers". The qualifying provision is section 230 (3) of the Employment Rights Act 1996. It provides:
"In this Act 'worker' (except in the phrases 'shopworker', and 'betting worker') means an individual who has entered into or works under (or, where the employment has ceased, worked under)—
(a) a contract of employment, or
(b) any other contract, whether expressed or implied and (if it is expressed) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual;
and any reference to a worker's contract shall be construed accordingly."
The issue is whether Dr Colin Westwood, during the currency of his relationship with the Hospital Medical Group (HMG), was a worker. If he was, it is common ground that he is entitled to a substantial sum of money in respect of unlawful deductions and accrued holiday pay.
The facts
Cases of this kind are particularly fact sensitive. For this reason, it is appropriate to set out at some length the facts found by the Employment Tribunal (ET).
"4. The claimant Dr Colin Westwood is a general practitioner with a practice in Timperley, Cheshire. He has been a GP since 1977. He is the senior partner in a small surgery and has direct experience in employing staff and management of employment contracts and related documentation for this purpose. As is entirely normal he engaged accountants to prepare practice accounts and various expenses were claimed against practice income. He was responsible for payment of his own tax and National Insurance even though he asserts that as a GP he was in effect employed by the health authority. He has always had an interest in minor surgery and in the mid- 1990s he trained with a company called Transform and began performing minor operations for them in about 1997. During 2005 he was approached by the respondent and agreed to undertake procedures relating to hair restoration on their behalf. He was offered a role working on Saturdays only with a provisional start date of 1 July 2005. Following a slow start the claimant began to work regularly at the beginning of 2006.
5. The respondent is the Hospital Medical Group Limited. It has clinics based throughout the UK and Europe. Some of these clinics have facilities for cosmetic surgery procedures, and other clinics have facilities for consultation and non-surgical procedures. The respondent engages surgeons and doctors who have their own practices or businesses in their own right and none are engaged on contracts of employment. The respondent's business is based upon demand and the amount of procedures to be carried out on a monthly basis is not therefore fixed. If members of the public do not contract with the respondent to undertake certain procedures, then that work would not be available to be allocated to a particular surgeon or doctor.
6. When the claimant was initially engaged he signed a Practice Privileges Agreement which sets out some basic terms upon which he would provide his services to the respondent. In short it was an agreement under which the claimant who was referred to as 'the Consultant' agreed to utilise the facilities of the respondent, and to conduct professional practice and provide care for patients within the respondent's facility. The agreement was silent as to employment status and the method of payment. The parties subsequently entered a written contract of services on 1 April 2007, and this was superseded by a Surgeon's Contract for Training and Services dated 1 December 2007. This is the agreement which became effective, and which was in place when the relationship was ultimately terminated. [I refer to this as 'the Agreement'.]
7. When this new Agreement was sent to him in November 2007, the claimant took issue with some aspects of it and made these known to the respondent in a letter dated 20 November 2007. However, he raised no objection to any of the provisions of the contract relating to his status which was expressed to be as a self-employed independent contractor. He accepted the Agreement on this basis.
8. The Agreement is expressed to be a contract for services between the parties. The claimant is referred to in the Agreement as "the Surgeon". The Agreement was expressed to be for a fixed term of three years from 1 November 2007, but there were early termination provisions in clause 12 including the right to terminate without notice for any behaviour or conduct likely to have a serious adverse effect on the reputation of the respondent.
9. Clause 3 sets out the claimant's obligations under the Agreement. He was required to give such advice and assistance to the respondent in connection with the provision of hair restoration surgery as the respondent might request from time to time; to make himself available for any further instruction or discussion as may be necessary; to obey all lawful reasonable directions of the respondent; and not to provide his services within the UK to any competitor of the respondent.
10. Clause 4 required the claimant to raise invoices at the end of each calendar month in respect of the services provided. These were expressed to be exclusive of VAT if appropriate. The claimant was to be paid a fee calculated as a percentage rate of the procedures undertaken and the respondent had the right to amend the percentage rate on one month's notice. Under clause 13 the claimant was responsible for payment of his own expenses.
11. Under clause 5 the claimant agreed that he was an independent contractor and that he was liable for his own tortious acts and breaches of contract. He had to undertake to take out his own professional indemnity insurance. He was also required to carry out any post operative reviews and any remedial surgery at his own risk and without any additional fee being paid by the respondent.
12. Under clause 6 the claimant was required to notify the respondent if he was absent because of sickness. There were no provisions for payment during sickness but he was required to produce a doctor's certificate for each week of absence after more than seven days. There were no occasions upon which he did this. Apart from the absence of any sick pay, there were no provisions relating to holidays or holiday pay, and the claimant never claimed any. When the claimant wished to take holiday, he notified the respondent and the respondent arranged any necessary cove.
13. Clause 7 included restrictive covenants, preventing the claimant from providing services to any competitor of the respondent during the continuance of the Agreement, and also against soliciting patients of the respondent for the period of 12 months after termination of the Agreement. Clause 8 contained confidentiality provisions.
14. Under clause 9 the claimant was required to pay all tax and national insurance as a self-employed person and agreed to indemnify the respondent in respect of any claims or demands which might be made by the authorities. Under clause 10 the claimant gave a warranty and a representation that he was an independent contractor and agreed that he was to bear sole responsibility for payment of tax and National Insurance contributions.
15. For many years from 2006 the relationship worked well between the parties. The claimant was habitually available towards the end of each week. For instance, from the beginning of January 2010 until August 2010 the claimant attended on average on at least two sessions per week. However, he was not obliged to work at a set time or for a set number of hours. He was able if he wished not to accept any assignments given to...
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