Muschett v HM Prison Service (2010)

Muschett v HM Prison Service (2010)

Mr Muschett was providing services for four months to HM Prison Services through the Agency Brook Street UK Limited. This case was held in the Court of Appeal where Mr Muschett argued that he was an employee of his end client HM Prison Services. The purpose of his employment claim was in order to claim for unfair dismissal, wrongful dismissal and discrimination.

Important facts of the case are as followed: Brook Street had the responsibility of deducting the appropriate tax and national insurance contributions before payment was made; sickness absence was reported to Brook Street; a replacement would be provided by Brook Street in the event of a prolonged absence; Brook Street conducted CRB checks and there was no contract between Mr Muschett and the Prison suggesting no intention to employ him.

The Court of Appeal determined that this was not an employment relationship upon viewing the state of affairs.

In order for a contract of employment to exist the following needed to be present:

  • The obligation on Mr Muschett to provide a personal service

Mr Mushett did not have a fundamental right to substitute the performance of his services. Therefore, the requirement of a personal service was evident. This is reinforced by the fact Mr Mushett did not attempt to provide a substitute in practice.

  • The right for the Prison to control Mr Muschett in the delivery of the services

Both the Employment Tribunal and Employment Appeal Tribunal determined that the Prison controlled Mr Muschett’s services. Mr Muschett was not autonomous as the prison dictated all daily tasks in relation to when and how they were to be performed. Additionally, no financial risk was present as the Prison provided all equipment for Mr Muschett.

  • An obligation on the Prison to offer work and an obligation for Mr Muschett to accept this work (this is frequently referred to as ‘mutuality of obligations’).

The lack of mutuality of obligations was the clearest indication that the existence of an employment relationship was not present. It was deemed highly significant that either party could terminate without any notice or liability. The fact that this was demonstrated in practice emphasised to the Court that the contract accurately reflected the working practices of the relationship. Furthermore, upon termination of the contract with the Prison, Brook Street had immediately found another client with similar terms to engage Mr Muschett with.

Other important factors

The Court of Appeal confirmed that the following factors were not sufficient enough to indicate a relationship of employment: being issued with a handbook similar to the one issued to permanent employees of the Prison and undertaking manual handling/induction courses.

The Court of Appeal clarified that a lengthy engagement with a client, on its own, would not automatically suggest that an employment relationship was present. This would also be applicable to arrangements that were expected to be short term but were extended to last longer.

This case reaffirms the position that contracts which accurately reflect the working relationship and are implemented in practice can carry significant weight and could win the day for contractors in demonstrating they are not disguised employees of a client.

Contractors should make it as hard as possible for anyone to consider the relationship is one of employment rather than an arms length commercial engagement of contractor and client by ensuring that a good contract is in place from the outset and is continually reviewed to ensure it reflects what happens in practice.

As ever, it is essential for contractors to seek professional advice to ensure that the contract and their working practices reflect each other and highlight inconsistencies which can be addressed early.

Pinsent Masons commented that; “Following the EAT’s decision in Alstom Transport v Tilson, the Court of Appeal’s decision in Muschett v HM Prison is another useful case when considering employment status issues.”

“Reinforcing the principles of the James v Greenwich case, the Muschett decision underlines the point that, where there is a clear intention between the parties, and the contractual documentation reflects that intention, there is no need to imply a contract of employment between an agency worker and an end user. This is the latest in a line of cases to reinforce that fact and should give additional comfort, and certainty, to contract workers and employment agencies”.