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Umbrella Contracts/Continuity of Employment

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[Thanks to Dr John McMullen of Wrigleys Solicitors LLP for preparing this case summary]

When carers employed by a contractor were engaged under a zero hours contract, was it open to a tribunal to find they were employed under a global contract of employment, with continuity preserved throughout?

Yes, says the EAT in Pulse Healthcare v Carewatch Care.

In this case, the carers were employed by Carewatch Care Services Ltd, a company contracted to a PCT to provide care for a severely disabled individual. The contract was re-tendered and taken over by Pulse Healthcare. The carers asserted they had TUPE rights against the new contractor.

But as a preliminary point, it had to be established that the carers were employees and, for the purposes of any claims they might wish to make, whether they had continuous service.

The carers were given a zero hours contract. It stated there was no obligation to provide work and the employees were ostensibly free to work for another employer.

The employment tribunal found that the contract given to the carers did not reflect the true agreement between the parties. In practice they performed services, were obliged to carry out the work offered and had to do it personally. Finally, the argument that these were individual discrete contracts as opposed to a global umbrella arrangement did not stack up. Carewatch was providing a critical care package 'of a most challenging kind'. The employment tribunal described it as 'fanciful' to suppose that the employer relied only on ad hoc arrangements in the provision of such a service.

Therefore the employment judge was entitled to hold that the claimants were employed by Carewatch under global contracts of employment with full continuity. The issue of whether, as employees, they actually transferred to Pulse under TUPE was remitted to an employment tribunal for further deliberation.