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FL Memo Ltd © 2007 |
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Employment Memo 2007 Newsletter Issue 2 |
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RECENT CASES |
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Recent cases Types of employment relationship Employee or self-employed? 1. Casual worker on a series of short term contracts ¶37 When a casual worker has a series of specific contracts of employment, he is continuously employed for the duration of each contract and will be able to rely on the main statutory rights once the necessary qualifying periods of employment have been achieved. Unless it can be found that there is an umbrella or global contract, the worker will be forced to rely on the statutory rules concerning continuity of employment. Where the worker does rely on these rules, periods of non-employment will usually break his continuity of employment (¶1010+). In this case, an employee V was employed on a series of casual contracts. It was held that there was no umbrella or global contract because in the periods when V was not at work there were no mutual obligations which could keep the contract alive (¶38). Consequently V had to rely on the continuity of employment rules to obtain the necessary qualifying periods to bring his various claims, principally one for unfair dismissal. This he was able to do as he had worked for his employer for at least one day every week from the start of his employment in February 2003 to the end of his employment in June 2006. As such, he came within the rules regarding continuity of employment (gaps between contracts of less than one week will not break continuity of employment (¶1014)). The tricky issue was that he had taken a two week holiday in 2005. Under the continuity of employment rules in such circumstances the gap would break continuity unless V could be said to have been absent in circumstances where, by arrangement, his employment was regarded as continuing. This was held to be the case. V’s employer accepted that V was entitled to statutory annual leave and had provided for holiday pay by rolling it up in V’s ordinary pay. Consequently, continuity had been preserved as V must be deemed to be ‘on the books’ for that period even though there was no contract of employment in existence. Comment Note that “rolled up” annual leave is now unlawful (¶4014). This was not an issue in this case so the illegality of the arrangements were not discussed. Vernon v Event Management Catering Ltd [2007] EAT case 0161/07
2. Whether controlling shareholder employee ¶43 When deciding whether a controlling shareholder is an employee of a company the tribunal will consider: – whether there was a genuine contract of employment; – the degree of control that was exercisable over the shareholder as an employee; and – the actual conduct of the parties. In this case, a shareholder held 50.1 percent of the shares in a company. He set his own salary and determined the day-to-day running of the company. Although ostensibly the shareholder took advice from other directors, in practice, he was not subject to any disciplinary procedures. The EAT found that he was not an employee. Morrison v ODS Business Services Ltd and anor [2007] EAT case 0618/06 |
