Who is the correct employer?


25 January 2021

In this case, the Employment Appeal Tribunal (EAT) provided guidance on how the correct employer should be determined when it is disputed between the parties.

Clark v Harney Westwood & Riegels and others UKEAT/0018/20

Facts

The claimant had been recruited following an approach by a headhunter, who advised her that his client was Harney Westwood & Riegals (HWR), an equity partnership based in the British Virgin Islands. She had various discussions with individuals described as partners or heads of department at HWR and attended a meeting at the firm’s London office.

The claimant’s contract of employment expressly stated that HWR was her employer, and her business cards stated that she was a partner of HWR. She was paid through a Cayman Islands bank account in the name of HWR.

Following termination of her employment, the claimant sought to pursue claims against HWR in the employment tribunal. Her claim raised various jurisdictional issues and was also found to be out of time.  In addition, the tribunal held that she was in fact employed by another entity (HG), which had applied for the necessary work permits allowing her to work in the Cayman Islands. The work permits named HG as the claimant’s employer. She appealed to the EAT.

Employment Appeal Tribunal decision

The EAT allowed the claimant’s appeal in relation to the identity of her employer (but rejected her claim on other grounds). It held that the tribunal was wrong to conclude that HG was her employer. It was clear from the written documentation that the correct employer was HWR.

In its judgment, the EAT sets out a number of factors to be considered when identifying the correct employer. Any written agreement drawn up at the outset of employment (the employment contract) will be the starting point, but the tribunal must consider whether the agreement reflects the intentions of the parties and consider all the relevant evidence.

Documents created separately from the written agreement, without the individual’s knowledge and purporting to show a different employer, should be treated with caution.

In this case, the tribunal’s reliance on the work permit documentation was misplaced. The EAT was satisfied that the claimant’s contract provided clear and unequivocal evidence as to the parties’ intention, and nothing else had happened to suggest that their intentions had changed. All interactions with the claimant were consistent with HWR being the employer.

Consequences

While in most cases the identity of an individual’s employer is clear, this decision will assist tribunals in the approach they should take in deciding the correct employer when it is in dispute. In this case, the vast majority of the evidence pointed to HWR being the claimant’s employer, and the existence of the work permits was insufficient in itself to reach a conclusion that her employer was different to the one named in her contract.

These articles are from the January 2021 issue of Employment and Immigration Law Update, our monthly newsletter for HR professionals. To download the latest issue, please visit the newsletter section of our website. For further information please contact Liz Stevens or another member of Birketts' Employment Law Team.

The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at January 2021.

Author

Liz Stevens

Professional Support Lawyer

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