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In another decision on employment status the Court of Appeal has, in Halawi v WDFG Ltd  EWCA Civ 138, considered the definition of “employee” for the purposes of section 83(2) of the Equality Act 2010.
In Halawi the claimant sought to establish that she was an “employee” within the statutory definition in section 83(2) Equality Act 2010. If she was not, she would not be eligible to bring her claim for religious discrimination. “Employee” has an extended meaning within section 83(2). It includes not only someone engaged pursuant to a contract of employment, but also someone engaged pursuant to a “contract personally to do work”. The issue in Halawi was whether the claimant met this latter definition.
Ms Halawi worked as a beauty consultant. She sold Shiseido products in a duty-free outlet situated beyond the departure gates at Heathrow Terminal 3. In June 2011 WDFG, the company that operated the outlet, decided to withdraw her airside security pass (issued by the BAA). This effectively prevented her from being able to work there. Ms Halawi alleged (and this is, hitherto, yet to be adjudicated on) that the withdrawal was on religious grounds and hence discriminatory.
The ET found that Ms Halawi provided her services through a limited company (Nohad Ltd), incorporated by her for the purpose, to a second company (CSA). CSA effectively acted as an agency to supply workers to Shiseido, which operated in WDFG’s outlet. It further found that there was no contract between Ms Halawi and either WDFG or CSA. Nor was Ms Halawi required to carry out the work personally. Rather she could get another person to substitute for her (and on occasion had done so).
The ET therefore found that Ms Halawi was not an “employee” for these purposes since she had not agreed to personally perform services for, and was not subordinate to, WDFG. Ms Halawi appealed to the EAT, which dismissed her appeal. She then appealed to the Court of Appeal on the bases, inter alia, that: an employment relationship may exist if the putative employee is in a relationship of subordination, personal service notwithstanding; and that the requirement for subordination may be qualified and in some cases dispensed with.
The Court of Appeal dismissed the appeal. There was no doubt that section 83(2) must be interpreted so as to be compatible with EU law and that there was an autonomous meaning in EU law of the term “employee”, which domestic legislation could not diminish.
However, it was well established by authority that there was a requirement for personal work (paragraph ).
As to the question of substitution, the Court acknowledged that, following the Supreme Court decision in Bates van Winkelhof v Clyde & Co LLP  1 WLR 2047, subordination was not a “free-standing and universal” element in employment and that its absence may not, in some cases, mean that there is no relationship of employment. However, there was no need to water down, or “fine tune”, the requirement for subordination in this case. Independence was not a necessary feature of her work (as it would be, for example, in the case of an employed solicitor or barrister). Further, Ms Halawi's lack of subordination was consistent was her lack of integration into WDFG's business. This was “an important factor” in determining whether the employment relationship existed (paragraphs -).
The decision emphasises the need for careful analysis of a claimant's status. Both the EAT and the Court of Appeal expressed unease that the complex arrangements in the case had the effect that the claimant was shut out from bringing a claim for discrimination, regardless of its merits. Nevertheless, this conclusion was compelled by the factual findings and the legal framework.
Although this was not one of them, it is clear that there is likely to be marginal cases in the future where the requirement for, and relevance of, subordination in determining whether a claimant is an employee will be in issue.
As to the law on employment status more generally, the present law is complex. The rules also change rapidly. Recent months have seen reforms to TUPE, flexible working, and the national minimum wage, amongst others. There have also been a significant number of Supreme Court and Court of Appeal cases on the topic in recent times, including Bates van Winkelhof v Clyde & Co LLP, President of the Methodist Conference v Preston  UKSC 29, MoJ v O'Brien  UKSC 6, and Quashie v Stringfellows  IRLR 99, to name but 4.
In November 2014 the Government launched a wide-ranging review of the area designed, as the Press Release puts it, to determine “what the options are to extend some employment rights to more people and whether there is scope to streamline this very complex area of employment law.” Officials hope to submit recommendations by March 2015. Of course, such a review is likely to have to work within the parameters permitted by EU law. It will be of interest to see what, if any, concrete proposals the review comes up with and what types of case they touch upon.