Mutuality of obligation

There will be “mutuality of obligation” wherever there is a legal obligation on an individual to carry out some work, and an obligation on the employer to pay for it.

Without mutuality of obligation, there can be no “contract” at all, so this concept only takes us so far. Its presence cannot be used to differentiate between employees and workers, because in both cases there must be mutuality of obligation — a legal agreement to do some work in return for payment (usually money). This explains why a genuine volunteer is neither an employee nor a worker (X (Appellant) v Mid Sussex Citizens Advice Bureau [2012] UKSC 59). See Volunteers, pages 55 and 160.

The obligation on the worker/employee is only to do some work. The 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 on an individual to work and some obligation on the other party to provide or pay for that work (Cotswold Developments Construction Ltd v Williams [2006] IRLR 181). However, if someone is genuinely free to refuse to work at all, this indicates a lack of mutuality of obligation, and that person can be neither a worker nor an employee. The fact that someone is forced to work long hours out of economic necessity does not make them a worker if they are not legally obliged to work (Knight v Fairway & Kenwood Car Service Limited UKEAT/0075/12/LA).