…if you want your legal personality to be an express term.
Employers should note the cautionary tale of Mr & Mrs McVeigh, who appealed to the EAT on a tribunal’s determination that they personally were the employers of their dismissed employee Christine Livingstone. In the right circumstances bringing a claim against two real people can be preferable to proceeding against their small limited company. The question is one of assets available for enforcement, proprietors of businesses often have cars, houses, cottages in the Cotswolds and so on, whereas the limited company might own some desks and chairs.
Mr & Mrs McVeigh had incorporated their limited company, and no doubt their accountant, landlord and taxman respected the fact. However, they completely failed to identify it on any documentation, including the contract of employment, correspondence and payslips. The name of the company only finally surfaced on a P60 produced months late and after proceedings had started.
Lady Smith gives a good summary of whether the question of personality is fact, law, or both:
The question of whether or not a person is employed by A or B is essentially a question of law: who were the parties to the contract of employment? However, answering it will often involve the assessment and evaluation of fact. It is a matter of identifying what was agreed between whom at the commencement of the contract. There may be documentary evidence about that. There may be oral evidence about it. It may a matter of inference from documentary and/or oral evidence. If the parties’ relationship at the outset is recorded in a document then it will be a matter of construing that document (a question of law) and then considering whether there is any other evidence which shows that the parties’ intention at that time was not in fact as the document indicates it was. Thus, where there is evidence in addition to a documentary record of the initial contract, then it is a matter of considering the document and those other facts together (a mixed question of fact and law: Clifford) or it may, depending on the circumstances, be a pure question of fact.
Good HR practices can circumvent these problems, and by that I mean basic research and common sense rather than anything complicated or requiring specialist assistance. The full case can be found here:Â McVeigh & Anor v Livingstone  UKEAT.