Nethermere Ltd v Gardiner [1984] ICR 612

• Plaintiffs worked 5-7 hours a day at home for a factory (sewing) for 40 weeks a year, using machines provided by Defendant company.

• The amount they worked depended on employers’ needs and no obligation on them to accept work (zero hours arrangement).

• CA held that they were employees and therefore were entitled to make unfair dismissal claims. There was mutuality of obligation. 

Stephenson LJ

• It is not true that an obligation on the employer to provide work is a prerequisite to finding a contract of service.

• He endorsed what Mackenna J said in Ready Mixed Concrete and asserted that:

There must…be an irreducible minimum of obligation on each side to create a contract of service

• He held that there was an umbrella contract that did in fact provide some duty on the employers to provide work and a duty on the employees to accept it, though the quantities and timing could vary, e.g. workers had to notify company if they couldn’t work one week and the company had to distribute work evenly.

• These duties were implied, but nevertheless grounded mutuality of obligation. 

Dillon LJ

• An arrangement under which there was never any obligation on the outworkers to do work or on the company to provide work could not be a contract of service. 

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