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: McVeigh & Anor v Livingstone [2009] UKEAT.

A link to the Practice Direction is here (pdf).

Apprenticeships are very important to the government’s plans. They are seen to benefit school leavers by providing a career structure and a route to qualification, and of huge benefit to industry for much the same reasons, since recruitment and training is supported by government at relatively little cost to the employer. The government plans to raise the school leaving age to 18, but will include vocational training programmes such as apprenticeships. Balls further states that this will necessitate the creation of a further 150,000 apprenticeships over the next five years, which will come on top of the already impressive£1bn in funding available for these programmes.

It is difficult to argue with this policy. I always had a sense of unease over the goverment’s push in the late nineties to hugely increase the amount of students going on from school to do a degree, which had seemingly little focus on the resulting future career benefits, if indeed there were any for some. This new focus on apprenticeships, by comparison, can guide school leavers into their first job. Leaving school at 16 gives a school leaver sudden freedom of choice at a young age, and the stark difference between school and work means some of them inevitably don’t handle the change – to say that some unemployment, crime,and antisocial behaviour are possible consequences is not, I think, unreasonable. 

Download the press release here: Denham & Balls TUC Speech News Release

However, employers beware. I once dealt with an employer who had been delighted at the prospect of employing five workers for the price of one. But when they weren’t actually very productive, and required more supervision than this very small company had envisaged, the employer was shocked to be referred to the case of Flett v Matheson [2006] EWCA Civ 53. This case overturned previous authority, and held that a modern style tripartite apprenticeship was to be treated the same in law as a traditional common law apprenticeship, such as have existed for hundreds of years. The difference is important – if I wrongfully terminate an employee’s contract, I must pay him the balance of notice that I should have given him, subject to his duty to mitigate his loss by finding another job. If I wrongfully dismiss my apprentice, heads of damages bold and shocking to employment lawyers come to the fore. A contract of apprenticeship will not normally enable the employer to terminate it before its completion (save for gross misconduct, which of course is a contractual repudiation). In the Denning case of Dunk v George Waller & Son Ltd [1970] 2 All ER 630 (no link I’m afraid) it was held that damages can include diminution of future prospects, as well as loss of earnings and training for the remainder of the contract. This first head can be huge: see the operation of the principle in all its glory in this case, as an apprentice sacked three years into a four year apprenticeship was awarded £20,000 for wrongful dismissal.

It is a beautiful city and I recommend it to you. The trip was also my first to Eastern Europe – Prague, Krakow and their ilk may be old hat to most people but I didn’t quite know what to expect. Poland is interesting because of its relationship with the UK. Although it’s a bit OT, I thought I’d set down a few of my thoughts.

Everyone will tell you that the UK entered the war as a response to Hitler invading Poland, yet how we acquitted ourselves afterwards is far less noble. During the war over six million Poles lost their lives. When we look at our own experience of WWII with misty eyes, consider the experience of anyone unfortunate enough to be sandwiched between Nazi Germany on one side, and Joe Stalin on the other. In Germany’s possession for over a century before Hitler came to power, Wrocław under the Nazis underwent ethnic cleansing of almost all its Jews and and many of its ethnic Poles. In 1945 its German commanders refused to yield to the Red Army, turning the city into an all-too-easily-beaten fortress using forced labour by citizens who were shot as deserters if they refused to help with fortifications, or tried to evacuate the city. The fighting almost all took place from house to house, with both sides setting fire to whole districts. It’s not known precisely how many people died during the 82-day siege; estimates range from 40,000 to 170,000. What is known is that after 1945 the city’s population was at under a third of its pre-war level.

The view of many historians is that the UK and the USA, keen to secure agreement and peace with the Russian Army, let Poland down. The country had made the fourth-largest troop contribution to the Allied war effort, yet after the war Stalin was allowed to keep the parts of Poland he had seized in 1939, with the size of the country being “made up” by additions from subjugated Germany. This resulted in some of the largest movements of people seen in human history. Stalin was also given free rein over the post-war installation of government, producing a repressive Soviet-style communist society that wouldn’t finally crumble until 1990. Although the West can say that opposition to Stalin may have been impossible, it nonetheless had a hand in something deeply immoral.

Now Poland and the UK are affecting each other all over again – over half a million Poles have come to work here since their accession to the EU in 2004. This has been economically beneficial for Britain (oh yes it has, naysayers) and certainly beneficial for the workers themselves – the average salary in Poland is around £5,000 per annum, compared to a UK minimum wage of around £11,000 for full time work. If you live in a city I’ll bet you don’t live more than ten minutes drive from a Polish delicatessen, and certainly where I live huge old-fashioned analogue satellite dishes have appeared on the front of houses, with ‘PolSat’ emblazoned across the centre.

The economic consequences to Poland’s own infrastructure have been far less rosy – if a Wrocławian wants an operation he’ll have to wait a long time; around a fifth of the city’s doctors move away to work in other European health services. All over the city, a “brain drain” is occurring, with young Poles finding the wonderful Gothic architecture and beautiful cobbled streets a poor choice compared to quadrupling their pay packet and seeing the world. Britain’s economy has outperformed most other Western countries due largely to its Eastern European workers, but once again we’ve taken a lot away from those left behind.

Poles are now changing the UK employment law scene too. Were it not for the Polish pickers, packers, pluckers and plumbers the pool of potential agency workers would never have been there to force the evolution of this area of law. As I’ve previously said, rights for agency workers are a real political hot potato, with unions and employers’ federations dead set against one another on the importance of the flexibility that our agency-working Europeans provide. Now that many newspapers have revealed the influx of Poles has either decreased or that they’re even leaving, it may be that the Poles depart having made a lasting impression on even my obscure sphere of operation – employment law. So now I urge you to go and spend some of your hard-earned cash seeing beautiful Wrocław, you won’t regret it, and you’ll be paying them something back.

Oh, and if you were wondering, it’s pronounced Vrotswav. Roll the r.

The question of whether a claimant in an unfair dismissal case is or is not an employee within the meaning of the 1996 Act is increasingly litigated before employment tribunals in unfair dismissal cases, particularly those brought by workers on the books of employment agencies. This is not surprising in view of recent developments: the length of the qualifying period for protection has been reduced to 1 year making it possible for more “temporary workers” to qualify for protection; the maximum award of compensation for unfair dismissal has been substantially increased making it more worthwhile for claims to be brought and providing employers with an additional reason for resisting claims; and, most important of all, there has been an explosion of numbers in the workforce (estimated at 1.3m) engaged to work under arrangements with employment agencies.

This case in the Court of Appeal, James v London Borough of Greenwich, has caused no end of grumbling in employment law circles at the failure of the court to lay down specific guidelines as to when an agency worker will become an employee of the end user. God knows why, previous EAT cases had made it simple enough. The hysteria that followed Dacas never made any sense – a bit of obiter chucked in that it would be possible in some cases to imply an employment contract in those circumstances wasn’t controversial.

What was controversial, when you take a step back, was the idea that this possibility was ever going to upset the statutory restriction of unfair dismissal rights to employees (unlike, for example, discrimination law), and the normal rules of interpretation of contracts.

Rights for agency workers is a real political hot potato, and change is needed, but frequent finding of employment relationships in genuine agency arrangements could cause huge economic upheaval. The courts were never going to do it lightly: they haven’t the balls, and it doesn’t make sense anyway.