The difficult question of employment status

What happened?

The claimant (Ms Morrison) raised several claims against her employer (Aberdein Considine & Company). Some of these claims she made required her to have been an employee of the firm in order for the ET to have jurisdiction to deal with it. Therefore, the main arguments in the employment tribunal and on appeal related to her employment status, was she a partner of the firm or an employee?

Ms Morrison was a salaried partner of the firm but argued that she was an employee.

The ET confirmed that the label "salaried partner" has no particular status in law. As a result, the ET decided to take the partnership agreement as a starting point before examining all the facts and circumstances to assess the nature of the parties' relationship and the true agreement between them.

Ms Morrison argued on appeal that this approach taken by the ET was wrong, and that the result of it was that the ET did not give sufficient consideration to the other evidence relevant to employment status.

The ET looked at both the written and oral evidence, at the important issues of control, nature of remuneration, interaction with third parties and how the parties identified their relationship and reached a permissible conclusion.

The EAT disagreed with Ms Morrison’s argument and said that the ET was entitled to take this approach because:

  • The parties accepted that their relationship was governed by the partnership agreement;
  • It had only been used as a starting point against which to test consistent and inconsistent factors pointing towards employment status; and
  • The partner's claim that she was an employee was contradicted by formal documentation, which made it necessary to scrutinise aspects of the agreement to see if they reflected reality.

Why is this important?

As stated this is a decision of the Scottish EAT and the parties had acknowledged that it was generally accepted in Scottish law that an individual cannot be both a partner and an employee. This is not the case in English law where a person can be both.

You can read the case here.

Tags Employment, employment status, EAT, Employment tribunal, SME, Markel Law, ET, EAT