The UK Employment Appeal Tribunal ruled yesterday that a worker who was considered self-employed by his company was in fact an employee and had been denied worker rights such as holiday pay.

Unite, the UK union took the case on behalf of pipefitter Russ Blakely against the employment agency On-Site Recruitment Solutions Limited and payroll company Heritage Solutions City Ltd. 
The case was for the deduction of wages and employer’s national insurance contributions as well as the non-payment of holiday pay.

Unite stated that this is the first time that an employment appeal tribunal has considered a bogus self-employment appeal involving the use of a payroll company. The union had appealed the case to the tribunal after the Reading employment tribunal rejected the case stating that Blakely was not an employee.

The fact that the decision was made at the Employment Appeal Tribunal means that it is binding on all employment tribunals and must be applied in other cases. 
The employment appeal tribunal found the tribunal was wrong to decide that Blakely was not a worker. Furthermore, it found that when determining whether there was a contract (part of the test of whether someone is a worker) the tribunal must consider the intentions of the worker and all surrounding circumstances, not just the intentions of the employer 

Unite added that there was a contract between Blakely and On-Site and the use of a payroll company did not circumvent this relationship. Blakely (and therefore other agency workers being paid through payroll companies) could be a worker of the agency, the payroll company or both. They also suggested that the possibility of being a worker of more than one body provides the opportunity to dramatically reduce the amount of umbrella/payroll company rip offs. 

 “This is a ground-breaking victory secured by Unite’s Strategic Case Unit in the fight against bogus self-employment in construction and other sectors,” Unite assistant general secretary Howard Beckett said. “It blows a hole in the way that employment agencies hide behind payroll and umbrella companies and pretend that they are not responsible for the employment of the workers they recruit. The fact the EAT held that a worker could be jointly employed by two organisations is a game changer in the campaign against bogus self-employment. 
The case has now been returned to the employment tribunal, to determine who was Blakely’s employer, whether it was On-Site, Heritage or both. The tribunal will also decide on Blakely’s compensation, which is expected to be around £2,500.