EAT finds partnership arrangement did not lead to contract of employment
The EAT has confirmed that an individual who provided services through a partnership could not bring a claim of unfair dismissal as he was not an employee.
Background
In the case of Anglian Windows Ltd v Webb, the Claimant entered into a contract with Anglian Windows Ltd as an Area Sales Leader on behalf of Webb Consultants - the pre-existing partnership he operated with his wife. When Anglian terminated the contract, the claimant brought unfair dismissal proceedings. The ET dismissed Anglian's application to strike out the claim as having no reasonable prospect of success. Anglian appealed to the EAT.
EAT decision
The EAT allowed the appeal. Case-law authority stated that where relevant work was being undertaken under an agreement with a partnership, this prevents the individual partners from being able to claim they were employees.
The Tribunal had sought to distinguish the Anglian case on the basis that:
- Anglian did not know it was contracting with a partnership
- the Claimant's wife did not work for Anglian
- only a minority of Anglian's area sales leaders preferred to trade as non-employees
The issue for the Tribunal was whether the arrangement between the Claimant and Anglian could lead to a contract of employment, which would mean that the unfair dismissal claim could proceed.
The statutory definition of 'employee' is an individual who has entered into or works under (or worked under) a contract of employment. The tribunal will always examine the reality of a working relationship if it is asked to determine employment status.
In this case, the factual findings precluded the existence of an employment relationship between the parties. Therefore, the Tribunal was bound by the existing case law in this area and should have struck out the claim as having no reasonable prospects of success.
Learning points
This decision contains some useful learning points for employers. As the Claimant had entered into a genuine contract on behalf of the partnership, the contract was not one of employment. The fact that Anglian was unaware that it had contracted with a partnership did not alter this fact. Having been found not to be an employee, the Claimant therefore did not benefit from protection against unfair dismissal.