In a case of significance for schools that engage peripatetic staff on a self-employed basis, a visiting music teacher (VMT) has successfully argued that she should be considered a worker, as opposed to self-employed, despite her contract stating otherwise.
There are, in general terms, three types of employment status: an employee, a worker and a self-employed contractor.
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.
In the case of Scott v Chigwell School, Mrs Scott was engaged by the School to provide individual music tuition, ensembles, and other ad hoc work.
Her contract with the School stated that she was a self-employed contractor. The School would introduce pupils to her and, as is commonly the case, parents would pay Mrs Scott directly for the lessons taught. 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. 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.
In summary, the Employment Tribunal decided that, on balance, Mrs Scott fell within the category of a worker for her work as a VMT and was self-employed for her ensemble and ‘ad hoc’ work 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 set her own fee (tuition fees were set by the School) and she had pupils allocated to her 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.
- 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 Judge decided that Mrs Scott was more properly described as a worker in her role as 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.
On the face of it, this decision may be of concern to schools that engage VMTs on contracts that describe them as self-employed. Many of the arrangements applicable in this case are commonplace in independent schools and, on balance, the Judge felt those 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 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 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 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.
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, 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 are currently in the process of reviewing the template ISBA VMT Consultancy Agreement in the light of this decision. Any updated version will be publicised shortly.