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HMRC internal manual

Employment Status Manual

Case Law: Secretary of State for Employment v McMeechan

[1997] IRLR 353

Point at issueMr McMeechan was on the books of an employment agency, Noel Employment Ltd, as a temporary catering assistant for about a year. When the agency became insolvent, he sought to recover from the Redundancy Fund, under S.122 of the Employment Protection (Consolidation) Act 1978, the unpaid earnings due to him in respect of his last engagement. This had been with a client, Sutcliffe Catering, and he was claiming the sum of £105. The underlying matter to be decided was whether Mr McMeechan had been an employee of the agency during the course of this particular engagement.

FactsMr McMeechan had worked for a number of clients of the agency for varying periods during the year to March 1993. He had produced a job sheet to the industrial tribunal which contained the terms and conditions of his service with Noel Employment Ltd for the period with Sutcliffe Catering.

DecisionThe Secretary of State for Employment refused Mr McMeechan’s claim on the grounds that he was not an employee. This refusal was upheld by an Industrial Tribunal but this was overturned by the EAT.

Finally, the Court of Appeal decided that, looking at all the terms of the single engagement, it gave rise to a contract of service.

CommentaryThe Court of Appeal concentrated on the criterion of mutual obligation and Waite L.J. stated:

“The principle which it enshrines is that if there be an absence on the one side of any obligation to provide work and an absence on the other side of any obligation to do such work…., then that provides a powerful pointer against the contract….being one of service.”However, he went on to say that temporary or casual workers pose a particular problem of their own in that there are often two engagements to consider. There is

  • the general engagement, under which sporadic tasks are performed, and
  • the specific engagement, which begins and ends with the performance of any one task. The judge stated that “each engagement is capable, according to its context, of giving rise to a contract of employment”.

In considering the single engagement claim by Mr McMeechan, Waite L.J. looked at the conditions in the written agreement and concluded:

“When it comes to considering the terms of an individual self-contained, engagement, the fact that the parties are not to be obliged in future to offer – or to accept – another engagement with the same, or a different, client must be neither here nor there.”He then went on to weigh the other conditions that applied, in relation to the single assignment with Sutcliffe Catering, and came to the conclusion that that assignment gave rise to a contract of service between Mr McMeechan and Noel Employment Ltd.

In this case the Court of Appeal confirmed the principle established in earlier cases that, as regards casual or temporary workers, there are often two engagements which employment tribunals have to look at. Firstly, the general engagement which involves a number of single engagements and, secondly, the specific engagements which make up the general engagement. The reason for doing so is that individual engagements may not be of sufficient duration to found a claim for unfair dismissal (there must one year (two years prior to 1 June 1999) of continuous service), redundancy etc.

In considering the existence of a general engagement, the courts will look to see whether there is a global or umbrella contract of service. They will therefore have regard to all the terms and conditions which apply whether written, oral or implied and also to the conduct of the parties. They will then step back and view the whole picture from a distance. One of the important factors they will look at in considering the general engagement is ‘mutuality of obligation’.

In a general engagement, there must be an obligation on the part of the engager to offer work, when it is available, and an obligation on the part of the worker to personally perform that work when it is offered.

However, in considering a single engagement, the mutual obligation, which must exist for there to be a contract of service, is that the engager agrees to provide the work offered and the worker agrees to perform the work personally. There is no need for there to be an obligation to offer and accept future work as there is only one engagement to consider.

The important point to bear in mind is that where you have a general engagement you consider the overall contract in determining employment status. Where there is a single engagement it is the contract for that specific engagement that forms the starting point.