Should Your Visiting Music Teachers Be Considered Workers?

Why Is Worker Status So Important?

Workers do not benefit from the full range of protection afforded to employees, but they are entitled to paid holidays, whistleblowing protection, discrimination protection, as well as the national minimum wage.

What Does the Law Say?

• An 'employee' is defined under the Employment Rights Act 1996 as an individual who works under a contract of employment (defined as a contract of service).
  
  
• A 'worker' is defined under the same legislation as an individual who has entered into or works under a contract of employment, or any other contract whereby the individual undertakes to do or perform personally any work or services for another party to the contract, who is not a client or customer of the individual.

If a contract contains a genuine and unfettered right of substitution, there will be no 'personal service' under the second point of the test set out above. Without personal service, an individual cannot be a worker or an employee.

Scott v Chigwell School

The school engaged Mrs Scott as a VMT under their standard 'peripatetic contract' as a self-employed contractor.

Under the contract, Mrs Scott was required to obtain payment for lessons direct from the parents of pupils and was entirely responsible for her own financial arrangements including tax as a self-employed contractor. The Employment Tribunal (ET) held that the contract was not a "sham" and that Mrs Scott could provide a substitute. However, because the right to send a substitute was only used "when necessary" this was not inconsistent with personal service. 

The ET's conclusion was supported by the fact that the individual VMTs were identified by name in the school's published information to parents.

Employee Status V Worker Status

The good news is that the ET held that Mrs Scott did not satisfy the legal test to establish employment status. The following factors were considered inconsistent with employee status:

• She took the economic risk - if parents did not pay for the lessons, she lost out financially.
  
  
• There was no mutuality of obligation - the school had no obligation to allocate pupils to Mrs Scott and she had no obligation to take on pupils allocated.
  
  
• She was able to carry on her own private practice at the school alongside her school teaching.

However the ET set out four factors which it considered meant that Mrs Scott was more properly to be described as someone providing her services as part of the school's business, not independently from it (ie that she was a worker as opposed to a self-employed contractor):

• The contract put limits on her independence, such that she could not set her own fee level and she had pupils allocated to her.
  
  
• The contract established a level of control over her work with the school that reduced her independence - she could not choose lesson length and was limited in some ways as to the timetable she could arrange. She had to comply with strict absence and safeguarding procedures.
  
  
• She was fairly well integrated into the school, being listed as a member of staff, having a School email address, using its equipment and being insured by the school.
  
  
• Written information provided to parents used the wording "we offer" when describing music lessons. It provided that service using VMTs.

Best Practice for Schools

The arrangement in this case is common with that of many schools. It has highlighted that where a self-employed contractor has to provide their work personally or has limitations on their ability to provide a substitute, and where they are seen to be part of the service provided by the school, there is a real risk they may in fact be found to be a worker or an employee.

Whilst cases involving worker status will always turn on their particular facts, this case provides an insight into how far a tribunal may go to find against self-employed status. It is important to note that this is a first instance decision and is not binding on future tribunals. The case may be appealed and there will be further developments in case law.

Based on this case, it is still possible to maintain a position of self-employment but it is worth a critical review of documents and practices to ensure they are as far as possible on the right side of the line.

Alternatively, schools may decide that now is the time to review and move staff on to employment (or possibly worker) contracts. This would need to be handled carefully to minimise the risk of claims for arrears of holiday pay, other financial benefits and also potentially Teachers' Pension Scheme contributions.

To discuss the employment status of your staff, please contact Alice Reeve, in our Employment Law team, on 0117 314 5383 or complete the below form.