Williams v. Hewlett Packard Ltd & Anor

Factual and Procedural Background

The appeal concerns a dispute involving the Appellant and two Respondents, Company A as First Respondent and Company B as Second Respondent. The Appellant initially filed a claim alleging unfair dismissal by Company A, asserting employment between November 1996 and October 2000. Company B, an IT Recruitment Agency, denied employment relationships, asserting the Appellant was engaged via a personal service company and contractual agreements that excluded employment status. Company A also denied employing the Appellant, stating he was either employed by his own company, self-employed, or employed by Company B.

A preliminary issue was directed to determine whether the Appellant was employed by either Respondent or neither. A tribunal hearing took place over two days, resulting in a unanimous decision that the Appellant was not employed by Company A under the relevant employment legislation, and the claim against Company A failed. Company B was dismissed from the claim by consent.

The tribunal made detailed findings that the Appellant was an experienced computer engineer operating through his private company, which contracted with Company B to supply services to Company A. Payments were routed through Company B to the Appellant's company, which then paid the Appellant a salary. The tribunal accepted that Company A had lawfully terminated the contract and found that the Appellant appeared to have sought to maintain a self-employed status to avoid an employment finding by tax authorities.

The Appellant appealed, raising six specific points challenging the tribunal's findings, particularly concerning the nature of contracts, invoicing, personal engagement, substitution rights, attendance requirements, and control over movements. The appeal was allowed to proceed to a full hearing subject to conditions including production of all relevant contracts, chairman's notes, and written evidence.

Legal Issues Presented

1. Whether the Appellant was employed by Company A or Company B or neither, under the Employment Rights Act 1996.
2. Whether the contractual arrangements and conduct between the parties established an employment relationship.
3. The relevance of control, substitution rights, and invoicing practices to employment status.

Arguments of the Parties

Appellant's Arguments

• Contracts with Company B and Company A specified that services were to be provided personally by the Appellant.
• Invoices from Company B to Company A referenced the Appellant's personal services.
• The Appellant personally contracted with Company B, not only through his company.
• Company A accepted that no substitute other than the Appellant would be accepted for his role.
• The Appellant was required to attend 37 hours per week, indicating an employment-type obligation.
• Control over the Appellant’s movements was exercised by Company A without involvement or consent from Company B, suggesting direct control inconsistent with self-employment.

Respondents' Arguments

• Company B asserted it was an IT Recruitment Agency and that no employment contract existed between the Appellant, his company, and Company B.
• Company B contended the tribunal lacked jurisdiction over the claim.
• Company A denied employing the Appellant, stating he was either employed by his own company, self-employed, or employed by Company B.
• Company A maintained the Appellant's services were supplied through Company B under professional services agreements.
• Company A followed contractual procedures to terminate the Appellant’s engagement.

Table of Precedents Cited

Court's Reasoning and Analysis

The court recognized the complexity of the employment status issue, noting the contractual arrangements involved a personal service company and recruitment agency supplying services to Company A. The tribunal’s findings indicated the Appellant was not an employee of Company A but operated through his own company.

The court acknowledged the Appellant’s six points raised arguable legal issues warranting a full hearing. However, it emphasized the necessity of reviewing all contracts and evidence originally before the tribunal, as well as the chairman’s notes of oral evidence, to properly assess the employment status claims.

The court also considered the precedent involving Company A in a similar context, which supported the position that the Appellant might not be an employee, but differences in contractual forms meant the current case required further examination.

Consequently, the court permitted the appeal to proceed to a full hearing with conditions ensuring comprehensive evidence review and procedural fairness.

Holding and Implications

The court allowed the appeal to proceed to a full hearing on the issue of employment status, subject to conditions including the production of all relevant contracts, chairman's notes, and written evidence.

The direct effect is that the Appellant’s appeal is not dismissed at this preliminary stage, allowing the matter to be fully litigated. No new precedent was established by this decision, and the court cautioned against raising false hopes given the difficulties inherent in establishing employment status in such arrangements.