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‘Self Employed’ Woman can claim Unfair Dismissal says Employment Tribunal. The Glasgow Law Practice

A recent Glasgow Employment Tribunal decision has confirmed an apparently “self employed” person can claim unfair dismissal. Stephen Smith of The Glasgow Law Practice acted for the person.

HAVING cakes and eating them. Making beds but not wishing to lie in them. Making camels instead of horses.

All sorts of colourful metaphors have been used by Judges over the years in attempting to explain an unusual employment situation which has arisen again in a case where the Glasgow Law Practice advised.

The case involved a woman who worked as a shop manager in a well-known Glasgow outfitter. Before she began work, the owner of the shop told her she would be paid on the basis that she was self-employed. This meant, instead of a wage slip being provided, the woman was to hand over an invoice and would be paid cash. Instead of income tax being deducted at source, she was to hire an accountant fill out a tax return once a year.

This arrangement continued by mutual consent for four years until, after a series of disagreements, the owner of the shop informed the woman her services were no longer required.

At which stage, the woman went to the Employment Tribunal to claim she had been unfairly dismissed, and that she had not been paid the notice pay and holiday pay due to her.

The owner of the shop tried to have the case dismissed by pointing out that, when a self-employed contractor is hired, they normally cannot claim unfair dismissal, because they have never been, and never could be, an “employee.”

At a hearing at the Employment Tribunal in Glasgow earlier this month where we represented the woman, she confirmed in her evidence that she had agreed to the “self-employed” arrangement, and that she was paid in cash and submitted a tax return each year.

However, she also gave evidence that she was told which days to work, which times, and could not send someone else to work on her behalf. She was largely told what to do by the shop’s owner, and she was not allowed to take holidays or swap shifts without prior consent, in the same way as other people who worked there, who were paid as employees.

While the circumstances are unusual, there have been some precedents, and we argued that, on the basis of these, our client did have the right to be regarded as an “employee”, even though she might have been said to have had the benefit of being regarded as self-employed.

In one previous case, also decided at the Glasgow Employment Tribunal and upheld after an appeal, it was held that, even where the parties have agreed to call their relationship one thing, the true legal construction might turn out to be different.

“If parties agree to create a horse but instead create a camel, the fact that they were intending to create a horse and even call what they have created a horse is of little assistance in determining whether it is in fact a horse,” ruled Judge Serota QC, in Levy McCallum Ltd v Middleton.

Employment Judge Kearns has now decided that, because of the level of control the shop owner had, the true nature of the parties’ relationship was of employer and employee, even though that meant disregarding the “label” of self-employed status they had previously agreed.

Our client is now entitled to a hearing on the level of compensation she is due for unfair dismissal and breach of contract.

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