This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Employment Status Manual

Case Law: Clark v Oxfordshire Health Authority

[1998] IRLR 125

Point at issueThe Oxfordshire Health Authority administered a “nurse bank” and supplied the services of bank nurses to a number of hospitals within its area. Mrs Clark joined the nurse bank as a staff nurse in January 1991. Her employment ended in January 1994 and she then claimed unfair dismissal and race discrimination. For her case to succeed she had to establish that she had been engaged under a contract of service.

FactsOn commencement Mrs Clark had received a document entitled “Statement of Employment” which set out some of the terms and conditions of her service and which indicated she was also subject to the “Whitley Council Agreement”. The conditions of service included the following:

  • pay at the rate of £10,700 p.a.
  • maximum hours – 37.5 per week
  • employment on a day-to-day basis with no guarantee of work
  • bank nurses are “casual staff working irregularly at the request of the Authority”
  • no entitlement to emergency duty payments
  • employment subject to policies and procedures of the Health Authority
  • membership of the NHS superannuation scheme
  • an express grievance procedure with specific provisions on dismissal
  • encouragement to join a trade unionIncluded in the additional facts found by the Industrial Tribunal chairman were the following:

  • bank nurses would be offered work as and when a temporary vacancy occurred and could be asked to fill any vacancy for which they were qualified
  • no entitlement to any pay when she did not work
  • no entitlement to holiday pay or sick leave
  • no obligation on Mrs Clark to accept work and no obligation on the Authority to offer her work.

DecisionThe Industrial Tribunal dismissed Mrs Clark’s appeal on the basis that there was no “global” contract of service due to lack of mutuality of obligation. The EAT overturned this decision but the Court of Appeal upheld the Authority’s appeal on the basis that the original tribunal was correct in determining that there was no global contract of service. Sir Christopher Slade said he could find no mutuality subsisting during the periods when the applicant was not occupied in a single engagement.

The case was remitted to the Industrial Tribunal to consider whether at the relevant time there existed a specific engagement, which amounted to a contract of service.

CommentaryThis is another case concerned with the concept of mutuality of obligation.

It reinforces the view taken by earlier courts [Airfix (see ESM7060), Nethermere (see ESM7110), McMeechan (see ESM7180)] that it may be necessary to consider the nature of the contracts in the single engagements and also whether an “umbrella” or “global” contract exists in relation to the general engagement.

Sir Christopher Slade came to the conclusion that there was no mutuality subsisting during the periods when the applicant was not occupied in a single engagement. However, this mutuality could have been created by the payment of a retainer during the gaps. He stated:

“I would, for my part, accept that the mutual obligations required to found a global contract of employment need not necessarily and in every case consist of obligations to provide and perform work. To take one obvious example, an obligation by the one party to accept and do work if offered and an obligation on the other party to pay a retainer during such periods as work was not offered would in my opinion, be likely to suffice.”We are of course interested if there is sufficient mutuality of obligation to create an “umbrella” contract of service but, if there is not, we still have to consider the nature of the contracts for each single engagement. In many instances, the single engagement contract will be a contract of service.

It does not follow that, because there is no mutuality of obligation in relation to the general engagement, single engagement contracts are not contracts of service.