One of the reasons many of our clients seek to engage consultants rather than employee staff is that they believe that it is easier to terminate the relationship without repercussions. After all, consultants are, at best, workers and therefore do not have the statutory right to claim unfair dismissal. Surely the right to terminate is determined by the consultancy agreement and there are no other considerations? Well that’s not necessarily the case and certainly not to be relied on by companies that regularly employ people from outside Europe.
In this case the EAT held that an employer could not rely on a negative verification notice from the Home Office in response to an Employer Checking Service (ECS) right to work check request when deciding to withhold work and pay.
Mr Ibrahim had been engaged by HCA International Ltd, ostensibly as a consultant but the tribunal held that he was, in fact, an employee. HCA mistakenly believed that it required documentary evidence of a non-EEA national’s right to work. However, as a matter of fact, Mr Ibrahim had an automatic right to work in the UK as a family member of an EEA national. As a consequence, the ECS results should have come back positive but, instead, for some reason had come back as negative.
HIG had sought to rely on a clause in its consultancy contract which stated that Mr Ibrahim had to produce evidence of his eligibility to work in the UK, failing which he would not be allowed to work or receive pay. Mr Ibrahim brought claims for unlawful deduction from wages and indirect race discrimination. These have been remitted to the tribunal for reconsideration in light of the EAT’s findings. However, by treating Mr Ibrahim as a consultant and not an employee, HIG could not rely on a potentially fair reason defence (i.e. a reasonable belief that Mr Ibrahim was not entitled to work in the UK) to terminate the contract. This, therefore, limits their ability to defend his claims.