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Unfair dismissal claim through Limited Company

11 July, 2009

A sub-contractor, Andrew Tilson, who works through his own limited company recently took Alstom Transport to an employment tribunal claiming unfair dismissal. The employment tribunal found in favour of the sub-contractor, as he was deemed to be an employee in the unfair dismissal claim.

Alstom Transport, an underground train service in the capital, claimed that Andrew Tilson could not claim for unfair dismissal as he was not an employee and was working via his own Limited Company -  it was then argued by Tilson’s barrister that in spite of paying his own income tax and NICs, the manner in which Tilson interacted with Alstom Transport at the Golder Green Depot was the indicator of Tilson’s employment status.

The employment tribunal judge then said that the working relationship between the two parties had demonstrated that Tilson had been an employee, and he could claim for unfair dismissal under the terms of the Employment Rights Act 1996.

The ramifications of this hearing could therefore affect sub-contractors in many other industries apart from IT.  The hearing has shown that the employment status of contactors is based on the working practices they are following, against the wording of their contracts or any company structure they may work under.

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