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Employment Law: Employee status and ‘umbrella’ contracts

Can an individual employed as ‘bank staff’, with no guaranteed hours, be an ’employee’? Ms Lane-Angell worked for Hafal assisting vulnerable adults in police detention. Her contract said there were ‘no guaranteed hours’ and Hafal would use her services ‘as and when they are required, if you are available’. Ms Lane-Angell would communicate her availability which was put into a rota. When on the rota she was expected to work if required. There was a poorly enforced ‘three strikes and off’ rule where staff were taken off the rota if they missed calls whilst on duty. Ms Lane-Angell missed calls and stopped receiving work. She then claimed unfair dismissal as an employee. But was she an employee?

The employment tribunal said yes. When work was offered to Ms Lane-Angell, she had to accept it or there were potential sanctions. There was an ‘umbrella’ contract which existed between her and Hafal. An umbrella contract is an overarching contract of employment which spans a series of individual contracts (in this case, the shifts she worked) and links them together. Hafal appealed to the Employment Appeal Tribunal.

The EAT agreed with the employer and said she was not an employee. The tribunal had not properly considered the original contract. The terms were clear that there was no obligation to provide or accept work. The facts showed that the ‘three strikes’ rule only applied when Ms Lane-Angell was on the rota. The tribunal was wrong to say there was mutuality of obligation during the periods in between shifts when there was no obligation to provide or accept work. Accordingly each break reset the ‘continuity of service’ clock to zero. There was no umbrella contract and she was not an employee.

This is a good result for the employer, and highlights the importance of having clear terms of engagement with workers.

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