Is Illegality Enough to Prevent An Unfair Dismissal Claim?

An individual who is miscategorised as self-employed rather than employed is not necessarily barred from bringing an unfair dismissal claim; a key consideration is whether the individual knowingly misrepresented his employment status, the Employment Appeal Tribunal held in Connolly v Whitestone Solicitors UKEAT/2011/0045.   

Before accepting a position as an assistant solicitor at Whitestone Solicitors, Mr Connolly (C) discussed his employment status with his prospective employer with the result that he was treated as self-employed. This was financially favourable to C for tax reasons. When C's engagement was terminated, he claimed unfair dismissal. The Employment Tribunal held that C had deliberately miscategorised his employment status to benefit himself financially and so public policy prevented C from pursuing an unfair dismissal claim due to illegality as held in Enfield Technical Services v Payne [2008] EWCA Civ 393.

On appeal, the EAT remitted the unfair dismissal claim to a fresh Tribunal for a rehearing.  The EAT held that seeking to claim self-employed status for financial benefits was not of itself the significant factor in such cases.  What the Tribunal should have addressed in order to bar the claim for misrepresentation and illegality (but failed to) was whether or not C knew that he should have been considered an employee and had deliberately misrepresented his employment status.