Mr J Nicholls v SD Civil Engineering Limited AT A HEARING — 2020

This was a remote preliminary hearing on the papers to decide the claimant’s employment status and continuity of employment. The tribunal recorded that the claimant started with KDH Publications Limited in October 2011, later submitted invoices to SD Civil Engineering Limited, and received payments in a fixed weekly amount. Although the respondent treated him as self-employed and later through the CIS scheme, the tribunal accepted that from September 2012 to May 2018 he was in fact an employee of the respondent, applying the factors relevant to employee status, including the approach in Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance.

The tribunal found that the claimant’s 11-month period with Vagbahn Limited between May 2018 and March 2019 broke any continuity of employment with the respondent. It held that Vagbahn was not an associated company of the respondent for the purposes of sections 218(6) and 231 of the Employment Rights Act 1996 because Mr Davis did not legally control Vagbahn: the claimant and Mr Davis were equal shareholders and co-directors, and there was no basis to treat the claimant as merely Mr Davis’s nominee. The tribunal also relied on the distinction between legal control and practical control, citing Secretary of State for Employment v Newbold, Tice v Cartwright, and Schwarzenbach and anor t/a Thames-side Court Estate v Jones.

After April 2019, the tribunal found that the claimant resumed work for the respondent under a new arrangement and was again an employee, and in any event a worker within section 230(3) of the Employment Rights Act 1996. That later period did not restore continuity for the earlier employment because the intervening Vagbahn employment was a separate and legally effective contract. On that basis, the claimant did not have the necessary continuity of service to bring an unfair dismissal claim, and that part of the claim was struck out. The only pleaded claim in relation to the April to August 2019 period was holiday pay, which the tribunal left to the parties to calculate or resolve, with directions to notify the tribunal whether it had been withdrawn or settled or whether any issues remained for final hearing.