The importance of mutual obligations

Carmichael and another v National Power, IRLR January 2000, House of Lords

• Two individuals worked as guides on a "casual as required
basis". There was an exchange of letters in relation to their appointment
but when the individuals applied to the tribunal for written particulars of
employment they were unsuccessful.

The tribunal held they were not employees as there was no "mutuality of
obligation". While the individuals’ appeal to the Employment Appeal
Tribunal was unsuccessful, their appeal to the Court of Appeal was allowed.
National Power then appealed successfully to the House of Lords where the
tribunal’s decision was re-instated.

The significance of the case is that it examines when it is appropriate to
decide an individual’s employment status solely by construing an exchange of
letters – as the Court of Appeal had done – and when other evidence should also
be taken into account.

The House of Lords held that it was open to the tribunal in this case to
find that the parties did not intend the exchange of letters to be the sole
record of their agreement.

PRP schemes and business transfers

Unicorn Consultancy Services v Westbrook, IRLB 632, EAT

• Westbrook was employed by Atkins Services and benefited from a
performance-related pay scheme, the profit year for which ran from 1 April to
31 March. On 1 April 1997, Unicorn took over Atkins’ works contract with a
local authority and this was a relevant transfer for Tupe purposes.

The tribunal held that Unicorn had a liability to pay the
performance-related pay to the transferred staff, even though the scheme was
entered into before the transfer and the employees were not Atkins employees when
payment was due to be made.

Unicorn’s appeal to the Employment Appeal Tribunal was unsuccessful. It held
that the scheme’s purpose was to give eligible staff an element of pay linked
to profit.

The employees transferred had earned their PRP because they had worked for
Atkins throughout its profit year and remained employed, even though not with
Atkins, at the time payment under the scheme was due. Unicorn was bound to pay
the PRP pursuant to the transferred contracts of employment.

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