The ongoing issue of visiting music teachers and their status in schools

This article first appeared in the summer edition of the ISBA’s The Bursar’s Review.

In early 2016 we wrote an article for The Bursar’s Review titled ‘The Perennial Question of Visiting Music Teachers’ (VMTs). The issues discussed in that article primarily focused on the difference between a VMT being employed or self- employed. The article is still relevant today but due to a number of gig economy cases there has been a shift in focus to the issue of whether an individual is a worker; i.e. neither an employee or self-employed.

In a case of significance for schools that engage peripatetic staff on a self-employed basis, a VMT has successfully argued that she should be considered a worker, as opposed to self-employed, despite her contract stating otherwise.

 

Employment Status

Employment status is the legal relationship between the individual and an organisation. There are, in general terms, three types of employment status: an employee, a worker and a self-employed contractor. Why is it important? It matters because it determines the extent of any statutory rights and protections that apply to an individual.

Employment status, and in particular the distinction between a worker and a self-employed contractor, has been a hot topic in the Employment Tribunal over recent years. This has been driven, in part, by the rise of the gig economy and high profile cases involving the likes of Uber and Pimlico Plumbers, in which individuals engaged as self-employed have been found, in reality, to be workers.

The distinction is significant as workers are afforded certain rights that are not applicable to those who are genuinely self-employed, in particular, statutory holiday pay and the national minimum wage. Employees have the greatest protection in terms of employment rights. Genuinely self-employed contractors benefit from very few rights; they have a higher risk usually in return for a higher reward. The consequences of getting employment status wrong could be fairly significant and could expose a school to the risk of challenge and potential liability.

 

Facts

In the case of Scott v Chigwell School, singing instructor Mrs Scott was engaged by the school to provide individual music tuition, ensembles, and other ad hoc work such as coaching the boys’ choir and also leading the musical theatre group.

Mrs Scott originally applied for the job of music teacher at the school; she was offered the post not as an employee but as a self-employed VMT and she was given a contract which stated she was self-employed. Mrs Scott knew the school well and had been a parent there.

The school would introduce pupils to Mrs Scott and, as is commonly the case, parents would pay Mrs Scott directly for the lessons taught although the invoices were sent to the parents via the school office. She was responsible for her own financial arrangements and accounted for her own tax. She marketed her services as a freelance music teacher to the world at large and she could choose when to work and when not to work. There was also a qualified right for Mrs Scott to appoint a suitable substitute to provide the service in her place, if necessary.

Mrs Scott brought a number of claims against the school in the Employment Tribunal and, as a preliminary issue, it was necessary to determine her employment status.

 

The Employment Tribunal’s judgment

In considering the question of employment status, an employment tribunal will look at the arrangements in place between the parties, looking behind the wording of the relevant contract. A tribunal will look at what actually happens in practice on a day to day basis. The judgment in this case is lengthy and looks in detail at the questions of whether Mrs Scott was an employee, worker or self-employed.

First, it is important to note that the tribunal viewed her two different roles at the school very differently and in our experience this can be fairly common in a school. It decided that, on balance, Mrs Scott fell within the category of a worker for her work as a VMT (individual voice tuition) and was self-employed for her ensemble and other ‘ad hoc’ work (such as the boys choir) for the school. When considering whether an individual may fall within the category of a worker, a tribunal will, in particular, need to see that the individual works under a contract, is obliged to carry out work, and is required to carry out the work personally.

In reaching their conclusion that Mrs Scott was a worker for the purposes of her role as a VMT, the tribunal relied heavily on the following:

• The contract limited Mrs Scott’s independence, in particular she could not in reality set her own fee and she had pupils allocated to her by the school. The fee rate was said to be a ‘recommended rate’ set by the school.

What happened in practice was that the school suggested a rate to all of its VMTs, then heard proposals from the VMTs, and after that, the school then decided on the rate and informed the VMTs. The school also informed the parents of any increase and the rate.

In fact, no VMT negotiated a different rate with the parents and the Tribunal found it was inconceivable that they could have done so, given that the school advertised the rate to parents. The school exercised control in this way and therefore the rate was not a recommended rate, it was a rate set by the school.

• The contract established a level of control over her work that reduced her independence. In particular, she was required to teach 30 minute lessons, according to a fortnightly rota and to avoid timetable clashes; she was required to write progress reports and had to comply with the school’s strict absence and safeguarding procedures.

• Mrs Scott was fairly well integrated into the school. She was listed as a member of staff, had a school email address, was able to use the school’s equipment and was covered by the school’s insurance policy. Although Mrs Scott was not allowed access to all areas of the school site, she appears to have been fairly well integrated into school life. The school did remove all the VMTs from the ‘all staff’ email distribution list in 2016; in error, Mrs Scott was left on the list.

• Critically, the school held itself out as offering music tuition and VMTs were identified as being part of the music department’s ‘offer’ to parents.

Taking into account these factors, the tribunal decided that Mrs Scott was more properly described as a worker in her role as a VMT, as opposed to a self-employed contractor. This was despite the fact that Mrs Scott received no payment from the school for her VMT work, was not obliged to take on work outside each pupil allocation and, separately, ran her own private business as a music teacher.

 

Impact on schools

On the face of it, this decision may be of concern to schools that engage VMTs on contracts describing them as self-employed. Many of the arrangements applicable in this case are commonplace in independent schools and, on balance, the Judge felt the factors that pointed towards self-employed status were outweighed by those that pointed towards worker status.

The decision does not, however, represent any significant change in the way tribunals approach such matters and cases relating to worker status will always be very fact specific. The Judge noted that this case was very near the dividing line and the decision simply highlights the forensic (and very practical) approach tribunals will take to assessing employment status.

It is also worth noting that this is only a first instance decision and is not, as such, binding on future tribunals.

Taking this into account, we would not recommend, at this stage, that schools take drastic action as a result of this decision. We would, however, recommend that schools undertake a general review of their arrangements with self-employed VMTs in the light of the particular factors taken into account by the Judge. In our experience, status can also change over time, so an individual can commence life with a school on a self-employed basis, but is then absorbed into the school over time.

In particular, schools should:

• Consider reducing, as far as is practicable and appropriate, any limitations imposed on the extent to which a self-employed VMT can appoint a substitute to deputise for them.

The right for an individual to appoint a substitute to undertake the work is an important factor in pointing towards self-employed, as opposed to worker or employee status. Tribunals will, however, consider carefully how such a right operates in practice and the greater the limitations imposed on the right the less likely it is the individual will genuinely be self-employed.

This does, however, need to be balanced against the need to ensure that any substitute is suitably qualified and appropriately DBS checked. Such limitations will not impact the question of employment status and should be included to ensure regulatory compliance. It was, however, significant in this case that, in addition to these regulatory limitations, the right of substitution was limited to circumstances where its use was ‘necessary’, as opposed to giving the VMT the right to appoint a substitute at any stage of the relationship. This was seen as being unduly restrictive and, as such, more akin to worker status.

• Avoid integrating the VMT into the school.

The more it looks like the VMT is part of the school’s workforce and commercial offering, the more likely it is they will be considered a worker, or indeed an employee. Schools should avoid including VMTs on staff lists, giving VMTs school email addresses and describing their services in promotional material as being part of the school’s offering.

• Review the extent to which they exercise control over the way in which the VMT operates and provides the services.

It was significant in this case that Mrs Scott could not choose the lesson length, was limited in the timetable she could arrange and tuition fees were (in fact) set by the school. It was also noted that Mrs Scott was required to comply with the school’s absence and safeguarding procedures. The Judge acknowledged that this was important for regulatory compliance but still found it to be a feature of control pointing towards worker status.

There will again be a balance to be applied here. Clearly, there will be a need to ensure that the VMTs’ activities do not impinge on the effective running of the school and the timetable in general. Schools should, however, take care not to impose specific requirements on self-employed VMTs that may suggest a level of control akin to worker, or even employee status. In particular, schools should avoid exercising control over the tuition fees charged by a VMT engaged on a self-employed basis. If the school sets the rate or has a recommended rate for their VMTs, but still wishes them to be self- employed, there is a clear contradiction there and a clear element of control. A self-employed individual has control over how much they charge for their service.

The tribunal’s decision in this case further increases the risk of VMTs, and other peripatetic staff, engaged on a self-employed basis, arguing they should in fact be workers and entitled to the relevant statutory rights.

Schools must balance having an arrangement that reflects reality and, as far as is possible, self-employed contractor status and ensuring that it works practically for the school and, importantly, that it ensures regulatory compliance.

If a VMT is engaged to provide services personally, with a significantly limited right of substitution, it is likely that they will fall into the category of a worker. Schools should ensure that the contracts they have in place with VMTs accurately reflect the reality of the situation and the individual’s employment status. Legal advice should be sought to reduce any associated risk.

We have just updated the template ISBA VMT Consultancy Agreement, available in the ISBA reference library, in the light of this decision. Please get in touch with Kristine Scott or Oliver Daniels for further information.