Landmark ruling on sub-contractor employee status

July 28, 2009
Lizzie Syddall

The employment status of so-called sub-contractors working in the UK could be affected by a ruling in which a sub-contractor was deemed to be an employee.

At a hearing in Watford, an Employment Tribunal found that despite working through both a separate limited company wherein he billed on an hourly basis, as well as being paid through a designated separate payroll company, Andrew Tilson was, in fact, an employee of underground maintenance firm Alstom Transport under the meaning of the Employment Rights Act 1996 and, as such, could claim unfair dismissal against the company.

Alstom had argued that Tilson, who was working at the company’s Golders Green depot, was self-employed and provided his services via a limited company rather than under a contract of employment.

Represented by Harold Benjamin Solicitors, Tilson’s barrister, Mark Sahu of Mitre House Chambers, successfully argued that despite paying his own income tax and National Insurance contributions, the way in which his work was structured and the manner in which he worked for Alstom and the tasks he performed on the company’s behalf were the real indicator as to his employment status.

Finding for Tilson, the Tribunal Judge agreed that the close working proximity between Tilson and Alstom was the key factor in determining his employment status and, as an employee rather than a self-employed sub-contractor, he could claim unfair dismissal.

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