Employment or self-employment?

Posted: 20th February 2018

Unfair DismissalThe distinction between employment and self-employment is difficult to draw but, as one case concerning a senior property professional showed, tribunals are used to looking beneath the surface in order to ascertain where control in a relationship resides.

A project manager of major land deals had given in his notice and offered his services to a group that was investigating potential joint ventures with local authorities to develop. His relationship with the group’s boss broke down and his engagement was terminated. He lodged an unfair dismissal complaint with an Employment Tribunal (ET).

In dismissing his claim, the ET found that it had no jurisdiction to consider the matter on the basis that he had worked for the group as a self-employed consultant. It noted, amongst other things, that he had invoiced the group for work done and had taken responsibility for his own tax and VAT liabilities.

The claimant had described his boss as a control freak and the ET accepted that the work he did for the group could only be done by him, in that he could not arrange for someone else to do it. He had been provided with a mobile phone and laptop computer by the group, which also bore the cost of private medical insurance for him and his family.

However, the ET found that other provisions of his agreement with the group were wholly inconsistent with employment status. He was able to decide for himself how he went about his work and his role was not regulated to the extent that he could fairly and properly be described as an employee.

In upholding the claimant’s challenge to that ruling, the Employment Appeal Tribunal (EAT) found that the ET, whilst asking itself the right questions, had erred in its approach to answering them. In particular, the ET had over-emphasised the absence of control over how the project manager did his job. The issue was sent back to the ET for reconsideration in the light of the EAT’s ruling.

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