GP locums may be eligible for holiday pay – Narayan v Community Based Care Health Limited

The Employment Appeal Tribunal (EAT) has upheld an Employment Tribunal decision that a GP locum was a “worker” and was entitled to holiday pay.

Facts

Community Based Care Health Limited (“CBCH”) is a “not for profit” company delivering out of hours GP services to patients in Gateshead using GPs from an approved list.

Dr Reshma Narayan was one of those GPs.  From 2005 until 2017 she worked for CBCH.  She worked regular shifts on a 12 week rota normally following a set shift pattern.  She was not obliged to accept work and CBCH was not obliged to give her any.  She could take holidays when she wanted as long as she had informed CBCH in advance.

From 2015, following advice from her accountant, Dr Narayan set up her own limited company.  She did not inform CBCH of its existence, but she did provide its bank details and payments from CBCH were made to it from October 2015 onwards.  She accounted for tax and national insurance through her company.

In 2014, with the introduction of a new standard contract for providers of out of hours services, CBCH were required to ensure doctors providing the service were competent and appropriately qualified.  To comply with this requirement CBCH audited Dr Narayan’s work which led to their decision not to offer her any more work from February 2017.

Dr Narayan brought Employment Tribunal proceedings in June 2017 claiming unfair dismissal, race discrimination, sex discrimination, breach of contract (in relation to notice) and unpaid holiday pay.

Dr Narayan was ordered to pay a deposit in respect of the sex and race discrimination claims but she failed to pay it and so these claims were struck out.

At a preliminary hearing the Employment Tribunal considered whether Dr Narayan was genuinely self-employed (as CBCH argued), an “employee” or a “worker”.

The Law – Employment Status

 There are several statutory definitions of “employee” though none of them are particularly helpful.  For the purposes of the Employment Rights Act 1996 an “employee” is someone who “works under a contract of employment”.  That does not take the definition very far.

In the absence of a clear and useful definition the courts have laid down the factors and tests to be considered when determining whether someone is an employee.  The application of these tests/factors has been difficult in some of the recent “gig economy” cases (e.g. Pimlico Plumbers Ltd v Smith, Addison Lee Ltd v Lange, Uber BV v Aslam).

A “worker” is a more recent statutory creation and was designed to create a category between genuinely self-employed and employee.

In many of the gig economy cases individuals have been successful in obtaining “worker” status but not “employee” status.

“Workers” have statutory rights including the right to the national minimum wage and paid annual leave.

The Narayan Case

 By the time it went to the EAT the only issue for consideration was whether Dr Narayan was a “worker” and was, therefore, entitled to annual leave.

The Employment Tribunal had found that she was a worker and CBCH had appealed to the EAT.

The EAT agreed with the Tribunal that Dr Narayan was a worker and was entitled to paid annual leave.

In reaching its decision the EAT accepted the findings of fact made by the Tribunal.  In particular the tribunal had found that Dr Narayan was required to work personally for CBCH and had the right to substitute another for her shifts but only where they were from a list already approved by CBCH.

CBCH argued that, although they had not been aware of it at the time, from 2015 Dr Narayan was providing her services through her own company which was incompatible with her being a “worker”.  They argued that it was the company providing the services, not Dr Narayan personally.

As this point had not been raised before the Tribunal the EAT determined that it could not form part of the appeal before it, but it went on to say that, even if it had been allowed, it would not have succeeded.  It was Dr Narayan who was seeing patients and providing the services personally.

The EAT also considered a similar case (Suhail v Herts Urgent Care (2013)) where a GP locum had not been able to establish “worker” status.  CBCH said that Dr Narayan’s case was indistinguishable from this the Suhail case.

The EAT disagreed.  In the Suhail case the doctor had actively marketed his services to a range of service providers and had entered into a “service level agreement” with Herts Urgent Care.  The cases were factually different.

Implications and What to Do Now

This case highlights the risk that seemingly self-employed GP locums could be considered “workers” and could be entitled to paid holiday and other worker rights.  This could create a significant liability for those providing GP services.

It is important to remember that all these cases are considered on their specific facts and, despite one recent news headline on this case, it does not mean that all GP locums will have these entitlements.  The Sunail case had a different outcome and other such challenges may well fail on their facts.

We advise our clients, where they have such locum arrangements in place, to take advice on the potential for their locums to claim “worker” status to understand the risk in each case.