Case Study: Can a contractor be unfairly dismissed?

In determining whether the employer as identified in a contract of employment is, in fact, the employee’s employer, can a tribunal take into account subsequent events?

Yes, held the EAT in Dynasystems for Trade and General Consulting Ltd and Others v Moseley.

Facts: Mr Moseley, was employed as an electrician in the security industry working in conflict zones. His contract of employment was with the First Respondent, a Jordanian company and he signed the contract shortly after joining. The First Respondent paid his salary but his line manager, with whom he agreed his salary and day-to-day management terms, was a director of the Second Respondent, a UK company. When Mr Moseley brought a claim for unfair dismissal in the UK, the employment tribunal had to decide which of these companies was his employer and after considering whether the employment contract truly reflected the reality of the situation, it found the Second Respondent to be the employer. The Respondents appealed on the basis that the tribunal should have limited its consideration of extraneous matters to the circumstances that existed at the time the contract was entered into.

Held: The EAT dismissed the appeal, holding that when the parties enter an agreement in writing, subsequent contradictory behaviour to that written agreement may be evidential (though not conclusive) as to whether that was, in reality, the agreement.

Comment: This case illustrates that a written contract of employment will not necessarily be conclusive evidence as to what was agreed between the parties and that a tribunal will look beyond the written contract to what is the reality of the employment arrangement.

Signing a contract with one company and then working for another is not uncommon, such as where one group company supplies the employee’s services to another group company or sends them on secondment to a client. This case does not affect the lawfulness of such arrangements but it does mean that, in order to be able to rely upon a written contract, it should actually reflect the parties’ true agreement.