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Case Law

Can a person be a “worker” even if she provides her services via a limited company?

Yes: A GP, who provided out of hours on-call cover, was a worker even though she was paid via her limited company.

In the case of Community Based Care Health Ltd v Narayan the Employment Appeal Tribunal, in September 2019, had little difficulty in explaining why the GP was on the facts a worker and entitled to holiday pay despite the use of her limited company.

Surely the GP was self-employed?

The employer argued that the GP was a self-employed contractor, arguing as you would expect, that the use of the limited company was pretty conclusive. However, the EAT’s essential findings of fact, about the GP’s employment status, provide another example of how difficult it can be to persuade an employment tribunal that an established working relationship is truly one of self-employment even where a limited company is used. Whilst the GP was not an employee because there was no mutuality of obligation, meaning the employer did not have to offer any shifts and the GP did not have to work any offered, she was a worker for employment law purposes. There was an established working relationship because the GP had provided her services for over 12 years working regular shifts.

The GP had to provide her services personally and, crucially, was not able to provide a substitute person to cover for her. In order to provide the NHS services, the GP had to be personally competent and be a qualified doctor – a status that her limited company could not satisfy. The EAT said that in any event the GP was a worker given the nature and duration of the work carried out personally by her.

Other factors that pointed towards self-employment such as the GP providing her own equipment and indemnity insurance and the fact she could work elsewhere without permission of this employer, still made her a worker given the personal nature of her work and registration requirements. The fact that she was paid via her limited company did not prevent her from being a worker who was providing personal service to the employer.

Is your organisation at risk?

Does this case report worry you? This EAT decision may have expensive consequences for all employers who may well find that an existing self-employed arrangement is actually a disguised “worker” relationship. Worst still, on the right facts, the individual may also be an employee with the benefit of full employment rights and protection.

This decision does not mean that every person providing personal service via a limited company is now going to be a worker – every case will depend on the true facts. However, if you are worried, contact Simon Quantrill to discuss your concerns and how he can review your current arrangements and highlight any concerns and recommendations. Simon has years of experience advising employers on employment status issues, including where the use of a limited company is intended to avoid all worker and employee risks. As this decision reminds us this is not always going to be case.

Case Details: Community Based Care Health Ltd v Narayan UKEAT/0162/18

Making sure you get the right advice

- for you and us, it's personal.

Simon Quantrill, Principal Solicitor

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01473 688 100

Making sure you get the right advice

- for you and us, it's personal.

Simon Quantrill, Principal Solicitor

Contact me on

01473 688 100