Blakely v On-Site Recruitment Solutions Ltd & Heritage Solutions Ltd Appeal Tribunal Outcome

Trade union, Unite, has been successful in an appeal to the Employment Appeal Tribunal (“EAT”) in the case of Blakely v On-Site Recruitment Solutions Ltd and Heritage Solutions Ltd. Unite claim the outcome of this case as a ‘ground-breaking legal victory’. We would suggest that rather, it is a good example of how not to engage temporary labour!

The union took the case on behalf of Russ Blakely, a pipefitter who carried out work on the Broadmoor hospital redevelopment project from January 2016 until May 2016. The judgement concludes that the case should be remitted to a fresh Tribunal to establish who Mr Blakely’s employer was – On-Site Recruitment Solutions Limited (agency), Heritage Solutions City Ltd (payroll company) or conceivably, both.

Background (the original Tribunal)

Mr Blakely was contacted by an employment agency, On-Site Recruitment Solutions Limited (“On-Site”), who sourced the assignment and stated that he would need to contact an umbrella company, Heritage Solutions City Limited (“Heritage”), for payment. Critically, his engagement was arranged by text message!  The message gave the main contractor’s details.  A further text told him to contact Heritage for payment but at no stage did anyone explain the nature of the contractual arrangement to Mr Blakely before he began working on the assignment.

Whilst On-Site claimed to have written to Mr Blakely confirming that he had chosen to subcontract through Heritage, he denied ever receiving the letter. He did receive instruction from On-Site in regard to submitting timesheets and providing verification of his identity.  When he received draft terms from Heritage which he was unhappy with, he took the advice of his union.

Heritage attempted to engage Mr Blakely on a Contract for Services which stated that he was neither a worker nor an employee and so, he was not eligible for statutory rights such as auto-enrolment, holiday pay and sick pay. Mr Blakely made a claim for unlawful deduction of wages by the umbrella company and for unpaid accrued holiday pay which resulted in a total claim between £2,500 and £3,000. The Reading Tribunal dismissed the claim.

The Tribunal noted that there appeared to have been a lack of proper or full disclosure of several key documents pertaining to the relationships between the parties and between On-Site and their client, Fascel Group Ltd for whom the work was undertaken.

The Tribunal found that there was no contract between Mr Blakely and On-Site and therefore concluded that he was therefore not a worker with On-Site within the meaning of section 230 of the Employment Rights Act 1996 or regulation 2 of the Working Time Regulations.

Further to this, the Tribunal concluded that there was a contract between Mr Blakely and Heritage, however, they found he was not a worker because he was “not providing work for Heritage in any meaningful sense since they appear to have had no obligation to Fascel”.

Grounds of appeal

Mr Brittenden, who appeared on behalf of Mr Blakely, stated that there were four grounds of appeal;

1. The Tribunal made a mistake in relation to its conclusion that there had been no intention to enter into legal relations with Mr Blakely
2. The Tribunal made an error in finding that there was no undertaking to provide work or services personally to either On-Site or Heritage
3. The Tribunal made a mistake in its approach in failing to identify any business undertaking of Mr Blakely in respect of which either On-Site or Heritage were a customer or client
4. The Tribunal failed to apply the correct approach having regard to Autoclenz Ltd v Belcher & Others [2011] in assessing the reality of the situation as compared to the written terms

The EATs conclusions

Some of the EATs conclusions were as follows;

• The appeal has been successful primarily on the basis of the first ground of appeal
• The Tribunal was incorrect to determine that Mr Blakely was not a worker
• There was a contract between Mr Blakely and On-Site (the agency) - importantly, the use of a payroll company did not circumvent this relationship
• The Tribunal reached the decision that Mr Blakely was not a worker without any consideration to Mr Blakely’s intentions. Both parties (On-Site and Mr Blakely) would have needed to share the same intention in order to conclude the absence of intention to create legal relations
• Mr Blakely could be found to be a worker of On-Site, Heritage or conceivably of both

The case will be remitted to a fresh Tribunal.

Aspire will keep you updated on any further developments.

To read our previous news item on Blakely v On-Site Recruitment Solutions Ltd & Heritage Solutions Ltd, click here.

Aspire Comment

The outcome of the original case demonstrates a worrying misconception of the role of an umbrella company in the contractual chain, stating that the fact that the umbrella company did not have a direct contractual arrangement with the end hirer indicated that the worker was not ‘providing work … in any meaningful sense…”

Accordingly, it seems entirely appropriate that the claim be referred for reconsideration in the employment tribunal.

The case does raise a number of apparent shortcomings in the manner in which Mr Blakely was provided with work finding services and also engaged by the umbrella company.  These demonstrate the importance of clarity in the supply chain which the current government consultation “Increasing Transparency in the Labour Market” seeks to address.  Whilst we all appreciate the pressure to fill vacancies - it’s good to talk and sometimes a text is a shortcut too far!

The outcome of this appeal is that the case will be reconsidered.  We consider that Unite’s claim that this presents a “ground-breaking legal victory against bogus self-employment” at this stage is somewhat premature.

If you have concerns about your engagement of self-employed individuals or your contractual terms, please get in touch with the Aspire team to discuss how we can help.

Phone: 0121 445 6178

Email: enquire@aspirepartnership.co.uk