ESM0545 | Guide to determining status: part and parcel of the organisation

Another factor to be considered in determining status is whether a worker is ‘part and parcel of the organisation’.

Whether an individual was regarded as part and parcel of the organisation was put forward by the courts in the 1950’s as an overall test of employment. However, the courts later played down its significance as an overall test and, where present, it is seen now as only a factor pointing to employment.

Denning LJ has said

The test of being a servant does not rest nowadays on submission to orders. It depends on whether the person is part and parcel of the organisation.’

[Bank voor Handel en Scheepvaart NV v the Administrator of Hungarian Property 35TC311, page 333.]

However, the courts have in later cases moved away from it being considered as an overall test of employment. For example, in Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2QB at p.524, MacKenna J referred to the above quote and stated:

This raises more questions than I know how to answer. What is meant by being ‘part and parcel of an organisation’? Are all persons who answer this description servants? If only some are servants, what distinguishes them from others if it is not their submission to orders.’

The Judicial Committee of the Privy Council also distanced itself from it as an overall test in the case of Lee Ting Sang v Chung Chi-Keung [1990] IRLR236. More recently, Mummery J. stated when giving examples of factors, which may be relevant in determining employment status:

‘It may also be relevant to ask whether the person performing the services is accessory to the business of the person to whom the services are provided or is “part and parcel” of the latter’s organisation.’

[Hall v Lorimer 66TC at p.367]

And in the case of Future Online Ltd v Foulds [2004] EWHC 2597 (Ch), Sir Donald Rattee confirms this view at paragraph 28 of his judgment.

In some cases it will be obvious that the person is carrying on a business outside and separate from the organisation. One example might be a marketing expert who provided advice from time to time on specific problems in return for a fee.

Another example might be a mechanic, with a contract to maintain a firm’s office equipment, who was called in by the firm from a base elsewhere when repairs were needed. In both cases those concerned provide services for the firm yet they are not an integral part of it.

Although it can be very difficult to decide whether a person works as an integral part of an organisation, the comments of the Presiding Special Commissioner, Stephen Oliver QC, in the case of Future Online Ltd v Foulds (SpC406) are a useful guide. At paragraph 31 of his decision he says:

‘Finally, I am satisfied that Mr Roberts, throughout the time he worked for EDS, was part and parcel of the organization. In the particular circumstances of the present arrangements Mr Roberts was well integrated into EDS’s structure assembled to carry through the CSR project. He had a manager to whom he was accountable. Mr Roberts in turn worked as part of a team managing other people. He was involved in discussions as to work allocation with EDS’s project line manager. He was expected to be available to advise and assist other members of the team. He attended meetings with interested parties alongside other EDS managers. Although Mr Roberts’ role in the organization will not necessarily be determinative, it is clear that in the present circumstances he was an integral part of the EDS organization dedicated to the CSR project.’

However, a distinction has to be made between being part of a team and being an integral part of an organisation. A musician for example may be part and parcel of an orchestra but it does not follow that he/she is an integral part of the organisation that runs the orchestra.