Valerie Bond
Posted on 12 Jan 2021

Identifying the correct employer in tribunal claims

In the case of Clark v Harney Westwood & Riegels and others [UKEAT/0019/20], the Employment Appeal Tribunal (EAT) considered how the correct employer should be identified when its identity is in dispute between the parties.

The Facts

The Claimant was employed under an agreement which stated that Harney Westwood & Riegels (HWR) was her employer. She was recruited to work in the Cayman Islands and the contract of employment gave an address for HWR in the Cayman Islands. When working both in the Hong Kong and Cayman Island offices, the Claimant was given business cards naming her as a partner of HWR. Further, the Claimant was paid from a Cayman Islands bank account under the name of HWR.

Unknown to the Claimant, applications for temporary and full work permits were made for her to work in the Cayman Islands. These applications were made by Harneys Gill (HG), a partnership arising out of a merger between HWR and CS Gill & Co. This was due to Cayman law providing that permits can only be obtained by entities that are at least 60% Cayman-owned. Both temporary and full work permits were issued by the Cayman Islands Department of Immigration naming HG as the Claimant's employer.

The Claimant was dismissed by a letter on HWR headed paper. The Claimant made a claim in the Employment Tribunal against HWR, but failed to lodge her claim for breach of employment contract within three months of her dismissal. She also failed to obtain an early conciliation certificate.

The Employment Tribunal (ET) dismissed the claim for lack of jurisdiction. They held that the Claimant had been employed by HG, not HWR. As an aside, the ET also held that the claim should not have been accepted as the Claimant had not complied with early conciliation and was out of time. However, the point for discussion in this article is that regarding the correct identity of the employer.

Previous Cases

The Supreme Court held in Autonclenz Ltd v Belcher and others [2011] IRLR 820 that the starting point for ascertaining the intention of the parties is usually the contract. However, where the written contract does not reflect the true intentions of the parties or nature of the relationship, it may be necessary to look beyond the written contract.

Similarly, in Dynasystems for Trade and General Consulting Ltd and others v Moseley UKEAT/0091/17, the EAT held that it was entitled to consider events which had occurred after a contract had been written up. However, the EAT in Secretary of State for Education and Employment v Bearman and others [1998] IRLR 431 stressed that the contract of employment should be the starting point for determining the identity of an employer.

The Court of Appeal found in Clifford v Union of Democratic Mineworkers [1991] IRLR 518 that the identity of an individual's employer is a question of law where the only relevant evidence is documentary.

Held

The EAT allowed the Claimant's appeal in relation to the correct identity of her employer and the territorial jurisdiction of the Employment Tribunal. However, the claim was dismissed as the EAT found that the ET was right to hold that it did not have jurisdiction to hear the claim due to the Claimant's failure to comply with early conciliation and to present the claim in time.

In terms of the identity of the Claimant's employer, the EAT held that it was clear from the written documentation that HWR was the employer and the true relationship between the parties was consistent with that.

The EAT set out principles to be considered when identifying the correct employer. They are:

  • Where the only relevant material to be considered is documentary, the question as to whether A is employed by B or C is a question of law.
  • Where (as is likely to be the case in most disputes) there is a mixture of documents and facts to consider, the question is a mixed question of law and fact. This will require a consideration of all the relevant evidence.
  • Any written agreement drawn up at the inception of the relationship will be the starting point of any analysis of the question. The Tribunal will need to inquire as to whether that agreement truly reflects the intentions of the parties.
  • If the written agreement reflecting the true intentions of the parties points to B as the employer, then any assertion that C was the employer will require consideration of whether there was a change from B to C at any point and, if so, how. Was there, for example, a novation of the agreement resulting in C (or C and B) becoming the employer?
  • In determining whether B or C was the employer, it may be relevant to consider whether the parties seamlessly and consistently acted throughout the relationship as if the employer was B and not C, as this could amount to evidence of what was initially agreed.

The EAT also considered the fact that documents had been created without the Claimant's knowledge. In these circumstances, such documents and written agreements should be viewed with caution.

Points for Employers

It is important that all written contracts of employment truly reflect the arrangement between the parties. By ensuring that all contracts and subsequent documentation are consistent, there will be a reduced risk of uncertainty. If the identity of an employer does change at any stage, this must be clearly documented and the relevant employee(s) notified of such a change.

This article is for information purposes only and is not a substitute for legal advice and should not be relied upon as such. Please contact Valerie Bond to discuss any issues you are facing.