News and Events

Employment Status

  • Posted

Is the parties’ intention as to employment status determinative of the question?

No, held the EAT in Richards v Waterfield Homes Ltd and Unity Build & Repairs Ltd.

The tribunal concluded that the Claimant was self-employed, that being the true intention of the parties.

The tribunal relied on the fact that the parties chose to engage under the CIS scheme, a construction workers tax scheme, “under which registrants know they will be treated as self-employed”. The judgment only alluded to other factors such as control and right of substitution, all of which pointed to employment status, without making any findings. Instead the tribunal simply noted that “the relationship was close to an employment one”. The Claimant appealed.

The EAT found that the tribunal placed too much emphasis on the parties’ apparent intention, being just one factor to be considered. The EAT found the case was not a finely balanced one in which the parties’ intention could be regarded as a ‘tipping point’ and therefore determinative. Instead, the EAT found that on the brief facts set out by the tribunal, the label adopted by the parties was ‘manifestly’ false. The EAT substituted the tribunal finding and determined the Claimant was an employee. The case was remitted for the substantive hearing.

Thanks to Olivia Selley of Harcus Parker for preparing this case summary.