The Employment Status Roulette

Over recent years I have seen many cases where employers seek to avoid liability for claims such as Unfair Dismissal by arguing that the people who work for them are not “employees”.  A prime example would be an employer relying on a contract which for all other purposes looks like a contract of employment but which says “this is not a contract of employment and you are not an employee”.

In the above scenario, what would happen after say 2 years when the employer decides to terminate the contract in what would ordinarily be unfair circumstances.  Does the person working for them have any redress for a claim of Unfair Dismissal?   The answer is that it depends on the facts of each particular case and a number of tests which can be applied to answer the employment status question.

I have just successfully argued a case very similar to this in favour of the employee.  In this case, the employer dismissed a member of staff in what is alleged to be unfair circumstances and a claim for Unfair Dismissal was lodged.  As a preliminary issue, the employer argued that the member of staff was not an employee and so could not bring their claim.  They argued that their contractual documentation made clear that it was never the parties’ intention to create an employee contract and that there were other factors which indicated self employed status.

I argued recent Court of Appeal case law before the Employment Tribunal and made the point that the reality of this particular situation was that my client was an employee.  I drew to the Tribunal’s attention the following key facts:-

1. This employee had to provide a personal service and was not able to send a substitute.
2. This employee was under their employer’s control in terms of when, how and where the work should be carried out.
3. There was an obligation on this employee to do the work and an obligation on their employer to pay them for it at the material time.
4. This employee was heavily integrated into their employer’s business and was part of the team.
5. This employee was subject to their employer’s disciplinary and grievance policies.
6. This employee was paid via payroll and had access to their employer’s pension scheme.
7. That were other factors present that indicated employee status such as the fact that this employee took no financial risk, made no personal profit (other than wages), and was not required to provide her own tools.

The successful outcome of this hearing means my client is able to continue her Unfair Dismissal claim.  Whether you are an employer or employee the issue of employment status is massively important.  If you need specialist advice before, during or after the employment relationship we give you a straightforward, professional opinion, contact me on 01522 561020.