Who is in control?

19 Feb 2013

In the case of White and Todd v Troutbeck SA, the Tribunal considered how control relates to the relationship between employer and employees and the definition of ‘in employment’.  The Tribunal was clear that the contractual level of control, rather than its day-to-day exercise, is the key consideration.

The Claimants were engaged by Troutbeck to manage the estate as the owners were absent and only visited once or twice a year. Mr White and Mrs Todd both had signed agreements with the owner of the property as ‘caretaker/manager’ and ‘caretaker’ respectively. The agreements stated the various duties and responsibilities of each of the Claimants and clearly stated "The owner shall employ the caretakers/managers as caretakers/managers of Starcross Farm" and there were various other references to ‘employment’.

A dispute arose when Mr White and Mrs Todd came to leave and they argued they were employees of Troutbeck.

In the initial Tribunal hearing, it was held that Mr White and Mrs Todd were not employees.  The Tribunal concluded that as it could not be said that the owners were in day-to-day control of the Claimants and they had never exercised their contractual control over them, they were not employed by Troutbeck.

At appeal, the Claimants submitted that the Tribunal should use a multifactor test.  It was argued specifically in relation to control that it was wrong to conclude that the control by the employer had to be substantial or significant, rather, all that was needed to establish that there was an employer/employee relationship was a contractual right to control.

In contrast, the Respondent contended that the Tribunal was not limited to simply considering the written agreement between the parties and that the Tribunal should consider the wider circumstances.

The Tribunal held in favour of the Claimants.  It was found that the key question was not whether, in practice, those carrying out their duties had day-to-day control over their own work, rather what was most significant was that there was a contractual right to control in place.  Based on this, the Tribunal held that Mr White and Mrs Todd were employees of Troutbeck.

Our view:

This case makes it clear that the starting point for Tribunals on deciding whether a Claimant is an employee will be any written agreement.  If a contractual right to control is evident in this agreement, then it will usually be conclusive proof that there is an employer/employee relationship between the parties.  If the ‘employer’ wished to argue that this was not the case they would have to be able to demonstrate that the agreement was a sham and not an accurate reflection of the relationship between the parties.