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Mutuality of Obligation

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A new decision from the Employment Appeal Tribunal, providing an example of when mutuality of obligation can exist despite no express obligation on the 'employee' to do anything!

Mr Younis was engaged to generate sales for a three year period, terminable on 60 days' notice. He was paid a small daily/monthly retainer, plus a commission. He worked for other organisations, and there was no direct contractual obligation on him to actually do any work for the 'employer' during the three year period of the contract.

The EAT (HHJ Peter Clark presiding) overturned the employment tribunal's finding that there was no mutuality of obligation.

It recognised that the normal question is whether the employer is under an obligation to provide work, and the worker to do it when provided. However, the EAT considered (on the facts of the case) that the existence of an overriding contract of three years' duration - notwithstanding that there was no express obligation to do anything during those three years - was sufficient to create mutuality of obligation.

Younis v TransGlobal Projects