Alstom Transport (2010)

Alstom Transport (2010)

Brookson Legal Services firmly believe that the outcome of Alstom Transport v Tilson given by the Employment Appeal Tribunal is fair, equitable and restores justice. Thankfully, this ruling reversed the decision that Mr Tilson had the ability to claim employment rights (such as unfair dismissal) from his client, Alstom Transport.

The Employment Tribunal’s opinion, from 2009, deemed the contract between Mr Tilson’s personal service company (Silversun Solutions Limited) and the employment business (Morson International) to be a “sham”. This conclusion, which enabled Mr Tilson to claim the same rights as an employee, evolved from the issues surrounding the IR35 indicator control. One specific clause in the contract indicated that “the individual was not subject to Alstom’s direction, supervision or control”. Despite this agreement, it was evident that Mr Tilson’s day to day working practices were not reflective of this control clause.

Upon Alstom Transport’s dispute of the original decision, the Employment Appeal Tribunal adopted an alternative method to this case. It was rightly determined that one clause cannot render an entire contract to be null and void. Ultimately, the relationship between the parties must be considered as a whole. It was also noted that all parties had the intention for Mr Tilson to be an independent contractor. This is evidenced through Mr Tilson’s defence of his independent contractor status during his time with the client.

A Brookson spokesperson commented that; “The final ruling provided the correct result”. The original verdict given by the Employment Tribunal neglected to examine the relationship between the contractor and employer and failed to look at the bigger picture, despite there being a contract in place which clearly identified the individual as an independent contractor.

This ruling was correctly overturned. The original decision could have opened the floodgates to contractors being able to claim employment rights, preferential tax treatment and a significant degree of flexibility if the assignment was terminated early. As a result of changing employment status during the contracted period, it would also permit HMRC to request any unpaid tax and national insurance contributions from the contractor.