The Employment Appeal Tribunal (EAT) has confirmed in Ter-Berg v Simply Smile Manor House Ltd and others that written terms, including clauses seeking to exclude an employment relationship, are not always irrelevant to a tribunal's analysis of employment status.
Dr Ter-Berg was a dentist and principal of a group of three dental practices. He sold the business to Simply Smile Manor House Ltd and subsequently entered an agreement with Simply Smile to provide dental services at specified premises. The agreement contained a clause stating that nothing in it created an employment relationship. If Dr Ter-Berg failed to utilise the dental facilities "through ill health or other cause" for a continuous period of more than 20 days, he was required to use his best endeavours to find a locum to provide services in his place. Dr Ter-Berg later brought an employment tribunal claim for automatic unfair dismissal.
The tribunal rejected his claim on the basis that Dr Ter-Berg was not an employee. Dr Ter-Berg appealed, arguing that, following the decision in Uber, the tribunal had erred in using the agreement as a starting point for determining whether he was an employee. The EAT disagreed holding that the reference in Uber to it being wrong to treat the contract as a starting point does not mean that the written terms are irrelevant or could not ever accurately convey the true agreement of the parties. It means that where the true intent of the parties is in dispute it is necessary to consider all the circumstances of the case which may cast light on whether these terms truly reflect their agreement.
Dr Ter-Berg also complained that the tribunal had failed to interpret the substitution clause correctly in that it had concluded that he had a free choice to nominate a substitute for any reason which was inconsistent with an employment contract. The EAT reasoned that the clause was triggered by a failure to use the dental facilities "through ill health or other cause" for a period of more than 20 days. It couldn't be involved in any situation where he merely wished not to use the facilities due to, for example, a desire to take holiday. It concluded that the tribunal's conclusion that the personal service requirement of an employment contract was not satisfied could not stand and the case was remitted to a new tribunal for fresh consideration of the correct construction of the substitution clause and whether Dr Ter-Berg was an employee of Simply Smile.
Take note: The decision in Ter-Berg emphasises that the written terms of a contract will be relevant to a consideration of the relationship which exists between the parties. It is only where the intention of the parties is in dispute that it will be necessary to consider all the circumstances of the case to see whether the terms reflect the practicalities of the agreement.
