Originally published March 2010
Over the last couple of years we have reported regularly on
cases looking at the employment status of workers provided through
an intermediary to provide services to an end user. In many of
these cases the contractual documentation has been structured with
the intention of making it clear that no employer/employee
relationship has been created but this has not stopped the EAT and
the Court of Appeal declaring many such arrangements to be
'shams'.
This was what the employment tribunal had decided in the recent
case of Alstom v Tilson. The facts were that the claimant
had spent over two years working for Alstom as a technician; he was
not party to any written contract (though there was a contract
between the end user and an intermediary stating that none of the
operatives had 'the rights or protections of an employee';
the claimant was paid by the hour; his services were supplied by
two intermediary companies; and he had twice refused invitations to
go on to the end user's pay roll.
The employment tribunal declared the contract between the end
user and the intermediary to be bogus and found it necessary to
imply a contract of employment between the claimant worker and the
end user.
The EAT now disagrees. It is not enough to say 'he looked like
an employee'. It is necessary to consider all the facts. The
parties' arrangements were consistent with the written
documents and also with the claimant's conduct. He did not want
to be an employee and the end user knew that he was not an employee
– otherwise it would not have asked him to become one.
The claimant was not an employee and so could not claim unfair
dismissal when the end user had no further need for his
services.
Point to note –
- The key in these cases is always – what is the reality of the relationship? The documentation alone will not decide the issue. However, where , as in this case, the documentation is consistent with the surrounding circumstances, it will not be possible to mount a claim later on the basis that the documentation was a 'sham'.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
