19 August 2011 #Employment
The EAT has held in Connolly v Whitestone Solicitors UKEAT/0445/10/ZT that the question the tribunal should have asked when considering if it was contrary to public policy to allow an unfair dismissal claim to proceed, was whether the Claimant had claimed self-employed status with Her Majesty`s Revenue and Customs (HMRC) knowing that he was not entitled to do so, thereby misrepresenting his employment status. The decision provides clarity as to what the Court of Appeal meant by ‘misrepresentation` in Enfield Technical Services v Payne  EWCA Civ 393.
The Claimant was offered employment as an assistant solicitor, but at his request, was treated as self-employed for tax-purposes and paid his gross remuneration. Following termination of his engagement, the Claimant claimed unfair dismissal. The question was whether he was entitled to claim the advantage of having been an employee required for an unfair dismissal claim, in these circumstances.
In the EAT`s view, when a tax-payer claims self-employed status to the HMRC, he represents that he honestly believes he is entitled to such status. If he knows that he is not entitled to do so, but still proceeds to do so anyway, he implicitly misrepresents his own belief and acts in bad faith. It will be contrary to public policy to support his claim for unfair dismissal.
The EAT stated that the tribunal judge should only have found performance of the contract illegal if she had found that the Claimant claimed self-employed status knowing it was unsustainable to do so. As the judge had not questioned this, the case was remitted to a fresh tribunal for a rehearing.