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UK – Union files appeal in effort to stop independent contractor misclassification

19 April 2017

Labour union Unite announced last week a legal appeal to the Employment Appeals Tribunal in a construction industry independent contractor misclassification case. The union said the appeal is part of a larger effort to combat independent contractor misclassification.

“The case is the first appeal launched by Unite’s new Strategic Case Unit which will focus much of its work on tackling bogus self-employment and sham contracts in all sectors,” according to a statement from the union. “The case is significant as the [Employment Appeals Tribunal] decision on the appeal will set a much needed legal precedent, which Employment Tribunals nationwide will be obliged to follow when dealing with claims involving agencies and employers that utilise sham payroll or umbrella companies.”

The case being appealed involves Russ Blakely, who worked on the National Health Trust-funded Broadmoor hospital redevelopment project in Berkshire from 19 January 2016 through to 20 May 2016, according to the union. Blakely was required to use an umbrella company, which charged him a weekly fee and the employers’ National insurance contribution. In March 2016, he was asked to sign a contract stating he was neither an employee nor worker. The contract also contained an indemnity clause dissuading him from raising a complaint with HM Revenue and Customs, according to the union. Blakely refused to sign and continued to work until 20 May 2016 when he took holidays and was told his services were no longer needed.

Blakely made a claim for unlawful deduction of wage deductions, but the Reading Employment Tribunal dismissed the claim. Unite lodged an appeal on 3 March of this year.

“We expect the [Employment Appeals Tribunal] will uphold our appeal and establish a legal precedent for employers and agencies operating these sham contracts, which bear no relationship to the actual employment relationship, and mean this exploitation loophole can be closed,” said Howard Beckett, Unite’s assistant general secretary for legal services.

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