Mutuality of obligation



“Mutuality of obligation” simply means a legal obligation on someone to carry out some work in return for some (usually money) payment (Stack v Ajar-Tec Ltd [2012] EWCA Civ 543). There must be mutuality of obligation to have any contract at all, whether as an employee, a worker or a self-employed business. A genuine volunteer is neither an employee nor a worker, because there is no legal contract (X (Appellant) v Mid Sussex Citizens Advice Bureau [2012] UKSC 59). (See Volunteers, page 48). This also explains why interns who are genuine volunteers are neither workers nor employees (see: Interns, page 48). 




The obligation is only to do “some work”. Having a contractual right to refuse work or to choose to withhold work does not mean there is no mutuality of obligation, as long as there is some obligation to work and some obligation to provide or pay for that work (Cotswold Developments Construction Ltd v Williams [2006] IRLR 181). There can still be mutuality of obligation even if the contract says you are obliged to do work only if there is work available (Wilson v Circular Distributors [2006] IRLR 38).



Even if there are gaps in between each separate work assignment when there is no mutuality of obligation (no obligation to provide and to do work), you can still be a worker, or even an employee, during each separate assignment (James v Redcats [2007] IRLR 296). 


Whether or not someone is a worker or an employee always depends on an examination of the facts of each case. However, EU law requires tribunals to interpret the term “worker” broadly, to help workers to access their EU rights. Under EU law, the focus should be on the extent to which the individual is truly independent (Allonby v Accrington & Rossendale College, [2004] ICR 1328). 



Whatever any written documentation says, the tribunal must always look all the surrounding circumstances, including the parties’ bargaining power, to work out someone’s true employment status (Autoclenz v Belcher [2011] UKSC 41).