Back in July we reported the news that contractor Andrew Tilson had been taken to an employment tribunal by Alstom Transport and the tribunal had determined that his relationship with the company was tantamount to an employer-employee relationship. This ruling was based on a clause within his contract which stated that “the individual was not subject to Alstom’s direction, supervision or control” even though this was somewhat different to the day-to-day working practices. The tribunal decision meant that Tilson was able to claim employee rights.
However, unhappy with the decision, Alstom has since taken the case to an Employment Appeal Tribunal (EAT) and they have judged the case differently. According to the EAT it was wrong of the initial tribunal to nullify the original contract based on one clause. Tilson himself also strongly defended his position as a contractor rather than an employee.
Martin Hesketh of accountancy firm Brookson, in their newsletter stated: “The final ruling [by the EAT] provided the correct result. The original verdict given by the employment tribunal neglected to examine the relationship between the contractor and employer and failed to look at the bigger picture”.
If the first ruling had not been appealed it could have paved the way for contractors to gain certain tax benefits while working on a contract and then claim employment rights if the contract was terminated before the agreed end date. It would also have left the door wide open for HMRC to make tax demands based on the employment status of the contractor during that working period.