Employment Law Speed Read – 29/05/18
29th May, 2018
This week we look at a case which centred around determining the identity of the Claimant's actual employer.
Dynasystems for Trade and General Consulting Ltd and Others v Moseley
In Dynasystems for Trade and General Consulting Ltd and Others v Moseley the Employment Appeal Tribunal (EAT) held that the Jordanian company named in the Claimant’s contract of employment was not, in fact, his employer. Instead, his employer was an associated UK company.
Mr Moseley was an electrician who applied for a job at a firm that dealt with providing services to the security industry, which included providing services in conflict zones and hostile environments.
Mr Mosely was offered the job and subsequently entered into a contract that stated his employer was the Jordanian company (the First Respondent).
At the same time that Mr Mosely signed his contract, he was given a letter from the Head of Legal at the UK Company (the Second Respondent). This enabled him to present to the passport office so that he could obtain a second passport necessary for his work in the Middle East.
Some time later, Mr Mosely brought claims for unfair dismissal and wrongful dismissal against both companies to the Employment Tribunal (ET).
The ET judge found that Mr Mosely had been both wrongfully and unfairly dismissed.
However, it was clear that there was a dispute as to which party should be treated as the employer. The Respondents argued that the Jordanian company was the proper employer, as stipulated in Mr Mosely’s contract of employment, and not the UK company.
The issue for the Judge therefore was whether the express term identifying the Jordanian company as the employer was a sham, because it was not an accurate reflection of the reality.
The Judge took into account multiple factors, including the letter from the Head of Legal and the fact that in the course of his four and half years’ service, Mr Mosely had not done any work on behalf of the Jordanian company. Further, all of Mr Mosely’s instructions came from the UK company and his line manager was a Director of the UK Company, and not the Jordanian company.
The Judge concluded that the express term stipulating the Jordanian company was the employer, did not reflect the actual agreement between the parties. He went on to say, it was understood from the outset that in reality Mr Mosely would be employed by the UK company.
The Judge noted that this was not a case where the UK company had carried out some of the functions of an employer, as they had carried out all of the functions of the employer. Therefore in reality they were the employer.
Employment Appeal Tribunal
The Respondents did not appeal the finding that Mr Mosely was unfairly and wrongful dismissed but did appeal the ET’s decision as to the identity of the proper employer.
One of the Respondents’ grounds of appeal was that the ET Judge was wrong to consider the subsequent events after the contract was signed. They argued that the ET Judge should have established the true agreement at the outset made between the parties.
The Employment Appeal Tribunal (EAT) dismissed the appeal. In doing so, it noted that the ET Judge was looking at the initial agreement. Further, they held that the actions after an agreement has been made may help as evidence of that agreement (albeit not conclusive evidence) and therefore could be considered.
The EAT noted that the weight of any subsequent evidence should be examined with care, but subsequent behaviour could be evidence of what was agreed.
This case reiterates the fact that Tribunals will not just take an express term about the identity of an employer at face value, if the reality of the situation is different.
Therefore, businesses should take care where they have associated companies to ensure that their employment contracts reflect what was actually agreed and that their subsequent actions do not evidence a contrary agreement.
If you have any questions on the above and how it will affect you, please do not hesitate to get in touch with a member of our employment team.