The Claimant brought claims of ordinary unfair dismissal, whistleblowing unfair dismissal and unpaid holiday pay. The ET found that he was a worker but not an employee, concluding there were three factors inconsistent with the contract being one of service; specifically: (i) the Claimant was only paid in respect of work done, (ii) there was no provision for paid holiday, and (iii) there was no provision for him to be paid subject to tax and National Insurance on a PAYE basis. The Claimant appealed.

The EAT allowed the appeal. The ET's conclusion was founded upon its approach to the three factors identified as being "inconsistent" with the existence of a contract of service. However, none of those factors were necessarily "inconsistent" with there being a contract of service, although they might be seen as pointing towards the relationship being that of worker rather than employee. Given that the ET's decision was founded upon this erroneous approach, the conclusion was rendered unsafe and could not stand.

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Appeal No. UKEAT/0236/16/JOJ

EMPLOYMENT APPEAL TRIBUNAL

FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8AE

At the Tribunal

On 31 January 2017

Before

HER HONOUR JUDGE EADY QC

(SITTING ALONE)

GUIMARAES (APPELLANT)

**

**

FINDLATER AND OTHERS (RESPONDENTS)

Transcript of Proceedings

JUDGMENT

For the Appellant
MR GUIMARAES (The Appellant in Person)

For the Respondents
MS OLIVIA-FAITH DOBBIE (of Counsel)
Instructed by:
Messrs Bolt Burdon Solicitors
Providence House
Providence Place
Islington
London
N1 0NT

JURISDICTIONAL POINTS - Worker, employee or neither

Employment status - section 230 Employment Rights Act 1996

The ET had found there was a contractual relationship between the Claimant and the Second Respondent (at least from 2011) and the first two questions laid down by MacKenna J in Ready Mixed Concrete (South East) Ltd v Minister of Pensions & National Insurance [1968] 1 All ER 433 were satisfied, such as to mean the Claimant was a "worker". Considering the third question identified in that case, however, the ET concluded there were three factors inconsistent with the contract being one of service; specifically: (i) the Claimant was only paid in respect of work done, (ii) there was no provision for paid holiday, and (iii) there was no provision for him to be paid subject to tax and National Insurance on a PAYE basis. Having so found, the ET held that the Claimant was not an employee for the purposes of the 1996 Act.

The Claimant appealed.

Held: allowing the appeal.

The ET's conclusion was founded upon its approach to the three factors identified as being "inconsistent" with the existence of a contract of service. As the Respondents acknowledged, however, none of those factors were necessarily "inconsistent" with there being a contract of service, although they might be seen as pointing towards the relationship being that of worker rather than employee. Given that the ET's decision was founded upon this erroneous approach, the conclusion was rendered unsafe and could not stand. Further difficulties arose in respect of the second and third factors. The ET's reasoning on the issue of paid holiday appeared to be founded upon a mistaken view that the Claimant had not been paid when on annual leave when it was common ground that he had enjoyed paid holiday at least since 2012; even if the ET had understood this, its reasoning on the issue was unclear. Similarly, the conclusion in respect of tax and National Insurance was apparently based on no more than a finding that the contractual relationship between the parties was informal and had not been reduced into writing. The ET was keen to avoid making a finding as to who might be responsible for the tax and National Insurance position, given that the issue of illegality had been raised for determination at any Full Merits Hearing, but that meant that the conclusion as to the relevance of this factor was inadequately explained.

1. In this Judgment I refer to the parties as the Claimant and Respondents, as below. This is the Full Hearing of the Claimant's appeal from a Judgment of the London (Central) Employment Tribunal (Employment Judge Glennie sitting alone, on 22 and 23 September 2015 and on 9 October in chambers; "the ET"), sent to the parties on 22 January 2016. Representation before the ET was as it has been at this hearing. By its Judgment, the ET relevantly held that, in respect of the Second Respondent, the Claimant was a worker but not an employee within the meaning of section 230 of the Employment Rights Act 1996 ("ERA") and in employment within the meaning of section 83(2)(a) of the Equality Act 2010 ("EqA"). It thus struck out his claims for ordinary unfair dismissal and whistleblowing unfair dismissal as well as striking out his claim for holiday pay for 2007 to 2011 as being made out of time.

1. The Claimant appealed the ET's findings adverse to him, but his proposed grounds of appeal were initially considered on the papers by Simler P to disclose no reasonable basis for the appeal to proceed. After a hearing under Rule 3(10) of the Employment Appeal Tribunal Rules 1993 before HHJ David Richardson, the appeal was permitted to proceed on amended grounds solely in respect of the ET's conclusion that the Claimant was a worker rather than an employee. The specific grounds of challenge thus permitted to proceed were set out by HHJ David Richardson in his Order seal dated 16 August 2016 as follows:

"2. There be leave to amend the Notice of Appeal to argue the following three grounds

(1) The EJ's finding at paragraph 47.1 that the Claimant was not paid when he did not work is not incompatible with a contract of employment.

(2) The EJ's finding at paragraph 47.2 and paragraph 40.5 that the Claimant did not receive holiday pay is perverse if it is intended to relate to the period after 2011. The Claimant received holiday pay while he worked at the Bounce Back Foundation.

(3) The EJ's finding at paragraph 47.3 does not address the Claimant's case - viz, that when first employed he did not understand the significance of tax, national insurance and PAYE; and later, when he did, he persistently asked for the matter to be dealt with."

1. The ET introduces the parties and their relationships, as follows:

"9. The background in summary is that when the Claimant and [the First Respondent] first became acquainted in 2007 the latter was the one of two principals of a marketing company, "Ricochet". She received a substantial unexpected legacy and set up the Second Respondent, which is a charity which aims to assist people leaving prison into employment. The Third and Fourth Respondents are associated companies and part of the "Bounce Back" organisation. The claim arises from the working relationship between the Claimant and the Respondents, which began in June 2007 and ended in November 2014."

1. The Claimant had originally been introduced to the First Respondent by a mutual friend and had initially started working for Ricochet as a paid intern on a trial basis. The ET's detailed findings of fact as to his work are then set out as follows:

"40.3. Initially it was agreed that the Claimant would be paid £1,000 per month, a figure that increased with the passage of time. [The First Respondent's] evidence was that the Claimant was not paid if he did not work, meaning in practice that he would be paid pro-rata against the current monthly figure if he did not work for the whole of the month. When asked about this, the Claimant at first said that it was "not completely true" that he was not paid if he was not present. In answer to my question on the point, he said that it "could be" that a week or a day would be deducted if he did not work. I concluded that the practice was not invariable, but that on the majority of occasions that arose, the Claimant would not be paid if he did not work.

40.4. The Claimant's tasks were wide-ranging. In his witness statement he mentioned answering the telephones, wide-ranging general office duties, marketing and design tasks (paragraph 7), helping with her stepmother and her deceased uncle's affairs (paragraph 54.10), helping with private shopping (paragraph 63) and looking after her house and art collection (paragraph 83), among others. [The First Respondent] identified office tasks such as answering calls (paragraph 15 of her witness statement), research (paragraph 24) and running errands (paragraph 27).

40.5. The Claimant did not receive any paid holiday: this was itself a subject of complaint to the Tribunal.

40.6. During 2008-9 the Claimant delivered invoices to Ricochet (ET1 paragraph 39 at page 14 and paragraph 21 of [the First Respondent's] statement).

40.7. It was a striking feature of the evidence that no tax or national insurance contributions were paid on the Claimant's earnings during the whole of the relationship with the Respondents. I have expressed this in impersonal terms since the Claimant contended that the Respondents were withholding the tax and NI that should have been sent to HMRC, while the Respondents contended that the Claimant should have been paying his own tax and NI as a self-employed person.

40.8. The Claimant did not, however, give evidence that it was ever expressly agreed that he would be taxed on a PAYE basis. He asserted on a number of occasions that this was what should have happened, or that the Respondents (or [the First Respondent] in particular) were unlawfully keeping the money for tax and NI that should have been passed to HMRC. Equally, [the First Respondent] stated that the Claimant "was aware that he received gross pay" (paragraph 68 of her witness statement). I found that there was no express agreement about the tax treatment of the Claimant's earnings.

40.9. The Claimant stated that by about 2011/2012 he had realised that he was in truth an employee and should be paying PAYE, and that tax and NI were being "withheld". He said that before that, it was a grey area and he did not know what was happening about tax.

40.10. In February 2014 the Claimant told [the First Respondent] that he wanted to work "standardised" hours of 9-5. [The First Respondent] referred to this request in an email of 19 February 2014 at page 514, expressing surprise about this request and its timing. She said that there would have to be a discussion about the tax position. The Claimant replied on the same day at page 513, stating among other things that it was now apparent to him that he was not self-employed or a consultant. He asked whether he should start invoicing. However, nothing more came of this and although [the First Respondent] asserted in paragraph 84 of her witness statement that "this was not an issue that was ignored", it appears that in fact this was what happened, or at least that no-one made further reference to it at that stage.

40.11. On 3 November 2014 the Claimant sent an email to [the First Respondent] headed "Resignation" (page 633) in which he stated that he was resigning from his employment with Bounce Back. He referred to the 19 February email and subsequent conversations. He said that he could not continue to work for an employer "that is asking me to invoice them for my services when it is clear that I have been employed by them for the past 7 years, and they are refusing to confirm my tax status as PAYE despite repeated requests". [The First Respondent] replied at page 635 expressing her regret at the Claimant's decision in emotional terms.

40.12. By this time, the Claimant had been paid by the Second Respondent since about 2011."

1. Noting that the issue of illegality was potentially a live issue for any subsequent hearing, the ET expressly did not reach any conclusions on the state of mind of any party regarding the tax and National Insurance arrangements.

1. Turning then to the existence of a contract between the Claimant and any Respondent, the ET concluded that any contractual relationship was with the Second Respondent. Although the First Respondent was the individual behind all of the entities for whom the Claimant worked, that did not mean she was the employer. Noting that the Second Respondent had been paying the Claimant and was seen as his employer in his resignation email, the ET considered that entity was the employer. Asking itself what the nature of that contractual relationship was, the ET noted that the Respondents did not seek to contest that the Claimant was a worker. It was also satisfied that the first two limbs of the Ready Mixed Concrete (South East) Ltd v Minister of Pensions & National Insurance [1968] 1 All ER 433 test were satisfied: the Claimant provided his work and skill in return for remuneration, and there was a sufficient degree of control. That said, the ET concluded that other terms of the contract were inconsistent with a contract of employment in the following respects:

"47.1. Substantially, the Claimant was paid when he worked and not paid when he did not. Although his remuneration was expressed as a monthly salary, in reality it was paid in a way that reflected the days worked.

47.2. There was no provision for holiday pay.

47.3. There was no provision for the deduction of tax and NI under the PAYE scheme."

1. The ET was concerned with the question of whether the Claimant was an employee for the purposes of the ERA, as to which section 230, relevantly, provides:

"230. Employees, workers etc.

(1) In this Act "employee" means an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment.

(2) In this Act "contract of employment" means a contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing.

(3) In this Act "worker" (except in the phrases "shop worker" and "betting worker") means an individual who has entered into or works under (or, where the employment has ceased, worked under) -

(a) a contract of employment, or

(b) any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of an client or customer of any profession or business undertaking carried on by the individual;

and any reference to a worker's contract shall be construed accordingly.

(4) In this Act "employer", in relation to an employee or a worker, means the person by whom the employee or worker is (or, where the employment has ceased, was) employed.

(5) In this Act "employment" -

(a) in relation to an employee, means (except for the purposes of section 171) employment under a contract of employment, and

(b) in relation to a worker, means employment under his contract;

and "employed" shall be construed accordingly.

…"

1. In Express & Echo Publications Ltd v Tanton [1999] ICR 693 CA, at page 697A-C, Peter Gibson LJ described the correct approach to determining questions of employment status as follows:

"(1) The tribunal should establish what were the terms of the agreement between the parties. That is a question of fact.

(2) The tribunal should then consider whether any of the terms of the contract are inherently inconsistent with the existence of a contract of employment. That is plainly a question of law, and although this court, as indeed the appeal tribunal before us, has no power to interfere with findings of fact (an appeal only lies on a point of law), if there were a term of the contract inherently inconsistent with a contract of employment and that has not been recognised by the tribunal's chairman, that would be a point of law on which this court, like the appeal tribunal before us, would be entitled to interfere with the conclusion of the chairman.

(3) If there are no such inherently inconsistent terms the tribunal should determine whether the contract is a contract of service or a contract for services, having regard to all the terms. That is a mixed question of law and fact."

And see the recent application of that approach by Kerr J in [Farmer v Heart of Birmingham Teaching Primary Care Trust]() [2016] ICR 1088 EAT.

1. In the present case, the ET had adopted the approach laid down in Ready Mixed Concrete, in which MacKenna J (from page 439H) stated that the key tests for determining that a contract of service existed were as follows:

"I must now consider what is meant by a contract of service. A contract of service exists if the following three conditions are fulfilled: (i) The servant agrees that in consideration of a wage or other remuneration he will provide his own work and skill in performance of some service for his master. (ii) He agrees, expressly or impliedly, that in the performance of that service he will be subject to the other's control in a sufficient degree to make that other master. (iii) The other provisions of the contract are consistent with its being a contract of service. …

… An obligation to do work subject to the other party's control is a necessary, though not always sufficient, condition of a contract of service. If the provisions of the contract as a whole are inconsistent with its being a contract of service, it will be some other kind of contract, and the person doing the work will not be a servant. The judge's task is to classify the contract (a task like that of distinguishing a contract of sale from one of work and labour). He may, in performing it, take into account other matters besides control."

1. Although there are a number of cases concerning the question of employment status, most will be highly focused on their own particular facts. The most useful approach to the question is, in my judgment, still likely to be that advised by Nolan LJ in Hall (HM Inspector of Taxes) v Lorimer [1994] IRLR 171 CA at paragraph 11 of that report, where the earlier guidance laid down by Mummery J (as he then was) in that case was approved:

"In order to decide whether a person carries on business on his own account it is necessary to consider many different aspects of that person's work activity. This is not a mechanical exercise of running through items on a check-list to see whether they are present in, or absent from, a given situation. The object of the exercise is to paint a picture from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and making an informed, considered, qualitative appreciation of the whole. It is a matter of evaluation of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details. Not all details are of equal weight or importance in any given situation. The details may also vary in importance from one situation to another."

The Claimant's Case

1. The Claimant first contends that the ET's finding that there was no obligation to pay him when he did not attend work, was not inconsistent with the existence of a contract of employment. Moreover, the evidence adduced from the Respondents' accountants (which had been approved at various levels, including by the trustees of the Respondents) showed that for a period of nearly two years he had the same monthly salary (there was only one month that showed a reduction, and there might have been an explanation for that). Although allowing that if he did not turn up to work at all he would not be paid (albeit he would still be paid if he was simply late for work), that was no different to the situation for any employee; it was certainly not inconsistent with there being a contract of employment. As for holiday pay, it was plain from the evidence that he was entitled to paid holiday leave; the second finding could not stand. As for tax and National Insurance, the ET had apparently found against the Claimant on the very point that had caused him to leave. The documentation provided by the Respondents showed that the Claimant had been described as an employee for a number of months - again on documentation that had been scrutinised by the Respondents' director and treasurer, their accountants, trustees and others - it was not the Claimant's fault that he had not been treated as such for tax and National Insurance purposes. It should not be a factor held against him in terms of the question of employment status.

The Respondents' Case

1. For the Respondents, it was accepted that being paid only in respect of work done (see the ET at paragraph 47.1) was not a factor that could negate a finding of employment status in and of itself if the accumulation of other factors revealed a picture depicting a contract of service. The ET had, however, recognised that it had to consider all aspects of the working relationship and that no single factor could be conclusive (see paragraph 36). The decision as to the Claimant's status was not based solely on the finding at paragraph 47.1, albeit that employees were more likely to be paid by way of fixed salary than workers (so this was a relevant factor). The ET also had before it other evidence, not all of which featured in its Reasons, on which the Respondent would rely. As for the documentation relied on by the Claimant, it had to be borne in mind that he had been the person who would draw up the records, which were then passed to the Respondent's accountants; in so doing, the Claimant had sometimes - but not always - referred to himself as an employee.

1. As for the finding (see paragraph 47.2) that the Claimant did not receive holiday pay after 2011, the Respondents did not dispute the assertion on which the appeal was premised in this respect: the Claimant had received holiday pay from 2011 onwards. The Claimant's case before the ET had been that he had begun to receive holiday pay in 2012. For the Respondent's part it was accepted he had received pay for periods spent on holiday from 2012 onwards but the ET's Reasons were not specific as to the time period in this respect (although the Second Respondent was not in any event registered until October 2011 so could not have been the Claimant's employer until then). The ET presumably recalled that the only issue regarding any entitlement for holiday pay related to an earlier period in the chronology and had that in mind. In any event, once the facts were properly understood, this was not a point of significance: it was part of the Claimant's role to compile spreadsheets of information for calculating pay for the Second Respondent's staff, and by 2012 it was part of his role to submit the information in respect of hours worked, time off et cetera to the payroll company for payment.

1. More generally, the ET's finding was that there was no provision for holiday pay, not that he was never paid such. The Claimant might have received pay in respect of days when he was absent on holiday, but that was because he paid himself during those periods - he was responsible for submitting the information regarding staff to the payroll company. He had never been issued with one of the Respondents' standard contracts and was not subject to the staff handbook, which expressly dealt with employees' holiday pay and leave arrangements; points that went further to the formality of the contractual arrangements between the parties as well as to integration, both factors relevant to the assessment of employment status.

1. As for the ET's finding in respect of tax and National Insurance (paragraph 47.3), it had addressed the relevant argument, having held that the Claimant realised the implications in respect of tax and PAYE in 2011/12 whereas prior to that it had been a "grey area" (see paragraph 40.9) but had only raised it with the First Respondent in February 2014 (see paragraph 40.10), and the matter was then left until the Claimant raised it when resigning in November 2014. This was a relevant factor, as it went to the parties' categorisation of their relationship and again highlighted the informality of the arrangements - also matters relevant to the determination of employment status.

1. The ET had given itself a correct self-direction as to the legal approach (see paragraph 36) and had very much had in mind the context of the particular case (see for instance paragraph 40.1). The definition of "worker" and "employer" shared a number of elements, and the ET had found that the Claimant's situation was consistent with his being a worker or an employee in the broader sense allowed under the EqA. It was therefore concerned with the other factors - those that distinguished between employee and worker - and had reached a permissible conclusion on those factors, which led it to conclude that this was not a contract of service. The ET was aware that it could have left these matters to be determined at the Full Merits Hearing - a course that it chose to adopt in respect of the time limit issue for some part, but not all, of the discrimination claims. The factors that the ET had relied on were sufficient to justify its conclusion, but there were a number of other points (see the Respondents' skeleton argument) that would have also supported its decision.

1. The ET (relevantly) had to determine whether the Claimant was an employee for the purposes of the ERA 1996. It had found that there was a contractual relationship between him and the Second Respondent, at least from in or around 2011 - when the Second Respondent started to pay him - and that this was for him to provide his own work or skill in the performance of service for the Second Respondent, in return for a wage and/or remuneration. It was further satisfied that, through the First Respondent, the Second Respondent exercised sufficient control over him for the relationship to be regarded as one of master and servant. The ET then turned to other factors and asked - per the third question in Ready Mixed Concrete - whether the other provisions of the contract were consistent with a contract of service. In approaching that question, the task for the ET was to make findings on the details and then to stand back and form a view as to the picture thus created (see Hall). If when doing so there were factors that were simply inconsistent with that picture being one of rather than for service (or in employment for the broader test allowed by the EqA), I can see why the ET would consider it would be bound to find that this was not a contract of employment. Otherwise, however, the ET's task was one of assessment, standing back and looking at all of the factors in the round to determine the correct way of describing the contractual relationship it had found.

1. In the present case, it is important to bear in mind that the ET's conclusion was founded upon its determination that specific other factors were inconsistent with the existence of a contract of employment. It did not explain its reasoning as one based upon an assessment of the picture in the round. On the contrary, it found it was simply inconsistent with the existence of a contract of employment for (1) the Claimant not to be paid when he was not working, (2) for there to be no provision for holiday pay, and (3) for there to be no provision for the deduction of tax and National Insurance under the PAYE scheme. That is significant because - as the Respondents have acknowledged - none of those factors would necessarily be inconsistent with a contract of employment; they might point towards a finding that this was a contract for rather than of service, but they would not, as a matter of law, be determinative of the point.

1. The Respondents seek to avoid the difficulty this presents for the ET's reasoning by reminding me that I must see these conclusions in context. Thus, on the question of pay, whilst it might not be inconsistent for the existence of a contract of employment for someone not to be paid unless they were actually at work, that can be a relevant factor: an employee is more likely to be paid a fixed wage; a worker is not.

1. I do not disagree with this analysis: to only be paid when actually performing work can be a relevant factor for an ET to take into account in its overview of the position. I remain, however, troubled by the statement in the ET's reasoning that this was inconsistent with the existence of a contract of employment. As the Respondents allow, an employee may find their pay deducted for failing to attend work - whether that is given the formal label of unpaid leave or not - but still be an employee. Whilst it is a factor that an ET might be entitled to rely on as pointing to the relationship looking more like that of worker rather than employee, in the present case the ET proceeded on the basis that it was inconsistent with being an employee, an approach the Respondents do not seek to uphold.

1. For the Claimant, it is noted that for almost the last two years of his working relationship with the Second Respondent there were no deductions. He was paid a consistent monthly sum. The Respondents say that does not represent a reliable picture (not least as the Claimant was responsible for the records) but, in any event, the ET had permissibly found that the contractual arrangement between the parties was such that he would not be paid if he did not attend work (paragraph 40.3).

1. It is not entirely clear to me for what period the ET was making that particular finding of fact, but, in any event, my concern is not abated. The contractual arrangement for pay in the event of an absence from work was a potentially relevant factor. There would be no difficulty if the ET had explained how this - weighed with and against other factors (a number of which the Respondents have listed in their skeleton argument) tilted it towards an assessment that the Claimant was properly to be described as a worker, not an employee. Baldly stating that it was inconsistent with a contract of employment does not, however, provide a safe foundation for the conclusion reached by the ET and, in my judgment, gives rise to an error of law.

1. I turn to consider whether that difficulty is overcome by virtue of the other factors identified by the ET as material to its conclusion.

1. As for the second factor cited - the lack of any provision for holiday pay - there are a number of difficulties, as the Respondents again acknowledge. First, if the ET was intending to state that the Claimant did not enjoy paid holiday leave, then that would have been wrong, at least from 2012 onwards (it being common ground he had been paid for holiday taken from then). It might be that the Respondents are correct - the ET's finding at paragraph 40.5 needs to be seen as relating to an earlier stage in the history, prior to 2011 - but, if so, that causes me to have some concern about the precise dates relevant for the earlier finding that if the Claimant did not work he would not be paid (see paragraph 40.3 and the discussion above). As for the contention that the fact that the Claimant was paid for holiday taken from at least 2012 could not be determinative in this context as it was the Claimant who was responsible for organising the pay during holiday leave, I consider there are two difficulties with this submission: (1) the ET did not find that the Claimant had wrongly put himself forward as entitled to holiday pay when that was not in fact the case, and (2) in any event, the ET specifically found that the lack of provision for holiday pay was inconsistent with the existence of a contract of employment - there is no suggestion that the ET did not see paid leave as a potentially relevant factor in this context. Further, although I also see the Respondents' additional point - at least in the context of this case - that the absence of a provision for paid holiday might not be the same as a finding that there was no pay for such leave, I do not think I can ignore the ET's earlier finding at paragraph 40.5 that the Claimant did not receive any paid holiday. There may be an issue about the time period to which the ET was referring, but that, at best, makes the reasoning unclear; at worst, the ET simply got the facts wrong.

1. As for the question whether the ET was intending to refer to the lack of express provision as relevant to its conclusion, I am again troubled by the fact that it saw this as simply inconsistent with this being a contract of employment. The context of this case would suggest that this was a point that could go either way: the lack of express provision for paid holiday might well suggest this was not a contract of employment, but it might equally be held to be entirely consistent with a contract of employment that was never reduced to writing and in respect of which there was a distinct lack of formality. So, while I can see it could be a relevant factor in the assessment of the Claimant's employment status, I can equally see it is a point that could go either way, and I am not confident that the ET's reasoning shows that it reached a definitive conclusion as to the contractual entitlement (as opposed to the rather less significant finding that there was no specific written provision for paid holiday, which the ET appears - although I cannot be sure of this - to have coupled with an erroneous finding that the Claimant was not paid for holiday leave when in fact he was).

1. The answer to the problem may lie in the ET's observation at paragraph 48, that it was expressing its conclusion in this respect with caution given that there were underlying issues that remained to be determined at a further hearing. If holiday pay is a relevant factor in determining employment status but also forms part of a standalone claim, it may be that the issues have to be left to be determined together. I am certainly not confident that the ET had sufficiently bottomed out the issues arising in this case to justify its conclusion that the position relating to paid holiday leave was inconsistent with the existence of a contract of employment.

1. That is also a point that arises in respect of the third factor, the absence of a provision for the deduction of tax and National Insurance under the PAYE scheme. It was the Claimant's case that this was the Respondents' choosing: he had raised the issue and was uncomfortable about it, but the Respondents had not confirmed his tax status, contrary to his request. The Respondents put the point differently: they had intimated that they would argue that any contract was tainted by illegality. The ET was understandably reluctant to make any clear finding as to any party's state of mind on this question (see paragraph 41), but that is, I think, what the Respondents are saying I must assume that it did: that the Claimant's continuing to work on this basis, when he knew that the tax and National Insurance position must be wrong, would simply be inconsistent with his being an employee.

1. I do not accept that is an assumption I can make; the ET's findings do not go that far. The best that can be said is that in this informal, unwritten contractual relationship - where there was no express provision concerning tax and where, as a matter of fact, it appears tax and National Insurance were not paid consistent with PAYE - there is no express finding as to why that did not happen. The parties were (and are) presenting conflicting cases, which remain unresolved. It may be argued that, even on the Claimant's case, the failure to pay him on a PAYE basis pointed against his being an employee, but it is not said that an ET would be bound to so hold: it might equally find that the Second Respondent was at fault in this respect and the Claimant had correctly identified he should be paying tax and National Insurance as an employee and was waiting for this issue to be resolved, not something that would necessarily be incompatible with there being a contract of employment.

1. For all of those reasons, I cannot be satisfied that there is a safe basis for the ET's conclusion adverse to the Claimant, and I duly allow the appeal.

1. I allowed the parties to address me further on the question of disposal. For his part, the Claimant says it should be to a different ET to determine the issue afresh. The Respondents, on the contrary, contend I should remit the matter to the same ET.

1. I have considered the factors set out in Sinclair Roche & Temperley v Heard and Anor [2004] IRLR 763 EAT and conclude that in the first instance this matter should go back to the same ET. This ET has already heard the evidence on the relevant points and has made some findings of fact on these matters, albeit not on all potential issues relevant to its assessment. There has been some delay, and it is unlikely that the evidence of the witnesses will be better than it was at the original hearing. It is proportionate to remit to the same ET, and I have no reason to doubt the professionalism of this Employment Judge in approaching this question afresh. It seems to me unlikely that ET would need to consider any further evidence at this stage, but it may well wish to receive representations on how best to proceed by way of an initial case management discussion. The ET might then take the view that it was best to simply put this question over to be determined - whether by the same or a different Employment Judge - at the Full Merits Hearing, when the substantive complaints will be addressed. At this stage, the existing ET would be best placed to determine whether that would be the appropriate course, depending on the significance of the factors such as paid holiday entitlement and tax and National Insurance arrangements and how those might be seen to interplay with the issues to be determined at the final hearing. For all those reasons, I direct that this matter be remitted for fresh consideration by the same ET, to the extent that remains practicable.