First Published at http://lexarbitri.blogspot.com/2011/07/are-arbitrators-employees.html
A question that arose for consideration before the UK Supreme Court inJivraj v. Hashwani
, was whether a contract exists between the parties and arbitrators, such that the arbitrators may be considered ’employees’ of the parties. This question was important to determine whether arbitrators are subject to the law prohibiting discrimination by employers and thus, whether a clause in the arbitration agreement requiring a particular religious belief for all arbitrators was discriminatory.
Whereas the English Commercial Court had held that the relationship between the parties and arbitrator was not a contract of employment, the Court of Appeal (CA), in 2010, held that such a contract does indeed exist, however, its precise nature is irrelevant. Arbitrators are ’employees’ since they act under “a contract personally to do any work”. The religion requirement was thus struck down as void.
This decision sparked off a debate
, not so much as regards the religion requirement, but as to whether nationality requirements in arbitration agreements could be struck down as void by English courts.
The Supreme Court, today, overturned the CA’s decision, holding that arbitrators are not employers within the meaning of the English anti-discrimination law. Since the statute defined employment as “employmentunder a contract of …”, the Court held that the role of an arbitrator is not naturally defined as one of employment. Arbitrators are independent providers of service, not subordinated to the person receiving the services, which is the case in employment.
Thus, arbitrators cannot be considered as employed by parties who appoint them, either directly, or through a designated arbitral institute.