Staffordshire Sentinel Newspapers Limited v Potter
Employment status – the ability to substitute
The test to be applied in determining whether someone is employed or self-employed has been considered by the employment tribunal many times in recent years. Numerous tests and guidelines have been referred to in case law. This latest employment appeal tribunal case focuses on the right to substitute in a contract for the provision of services.
Potter was a home delivery agent for Staffordshire Sentinel Newspapers from 4 February 1999 until 31 March 2003, when his appointment was ended. Potter issued an unfair dismissal claim, arguing that he was an employee of the newspaper company. The respondent stated that Potter was a self-employed agent and referred to the terms of a delivery agency agreement. This included a right for Potter to provide a substitute.
Staffordshire Sentinel Newspapers relied on the Court of Appeal’s decision in Express & Echo Publications v Tanton , which confirmed that the need for personal service was key to an employment relationship and a right to substitute was not consistent with an employment relationship. Potter argued that there was an implied term that he personally would provide the service, and that the clause was a ‘sham’ – in reality there was no right to substitute.
The Court of Appeal concluded that the right to substitute did form part of the contract and consequently Potter was not an employee of the respondent. His claim for unfair dismissal failed.
This is a useful decision as it confirms that a right to substitute is not consistent with an employment relationship. However, care should be taken in relying on this decision when dealing with agents. This case focused on one particular element – namely the right to substitute.
Employment tribunals will, of course, consider a whole range of factors in deciding on employment status, and each case will ultimately be decided upon its own facts.
What you should do
- Take care when dealing with agents – consider whether in the circumstances an employment relationship may have developed.
- Ensure that all such agreements include a substitution clause.