Can an individual who is paid a quarterly 'exclusivity' payment be an employee?
Yes, held the EAT in Exmoor Ales Ltd & Another v Herriot.
The Claimant provided accountancy services for the brewery for 27 years. She submitted invoices in the name of her partnership (with her husband). The brewery then paid her a quarterly payment of £1,000 from 2011 onwards. She brought a number of claims including unfair dismissal and discrimination when the working relationship ended. The brewery denied that she was a worker or employee.
The tribunal held that the Claimant was an independent contractor until 2011 when she became an employee. It preferred her evidence that the quarterly payment required her to work exclusively for the brewery, and that she had no right to appoint a substitute in her absence.
The brewery appealed that decision on the basis that the tribunal had not looked at all the relevant factors on employment status, including her tax arrangements, and that she had prepared employment contracts for other staff but not herself, and was not a member of the employee share scheme. The EAT rejected the appeal. It held that Tribunal had been aware of the tax arrangements and the other factors but these had been overridden by other factors including mutuality of obligation, control and substitution. These factors, and the exclusivity obligation, were decisively in the Claimant's favour.
Thanks to James English of Ward Hadaway for preparing this case summary.