Independent contractor or employee?: Potter started working for Sentinel in February 1999 as a home-delivery agent. The delivery agency agreement was stated to be an agreement for services, not a contract of employment and further, that Potter was an independent contractor. There was no express ‘substitution’ clause.
In November 2000, Potter signed another agreement, but this one contained the right to substitute ‘suitable people to ensure the obligations under the agreement are fully complied with’.
Last March, Sentinel terminated the agreement with four weeks’ notice. Potter brought an unfair dismissal claim and the tribunal had to decide whether it had jurisdiction to hear the claim. It found that while Potter exercised a high degree of control over his activities and could substitute a third party to cover absence, this was not an unfettered right. On one occasion, his substitute choice was not approved, and on another, Sentinel itself found a substitute.
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The tribunal held that Potter was engaged under a contract of service as there was a mutuality of obligation. Potter provided his own work in return for remuneration, so his claim could proceed.
Sentinel appealed. The EAT held the November 2000 agreement was clear. Potter wasn’t personally required to do his work, which was inconsistent with a contract of service. The tribunal made its conclusion on a material misunderstanding of the law, and had no jurisdiction to hear his claim.
