Following reports that the Government was on the verge of reintroducing employment tribunal (ET) fees, the Justice Secretary and Deputy Prime Minister, David Lammy, has confirmed that this will not happen.
The government’s tribunal statistics revealed some key findings recently – including a significant rise in claims. This serves as yet another important reminder for HR to always be taking the right steps to avoid risk…
We have seen a couple of cases recently where a job applicant has brought a tribunal claim after their offer of employment has been withdrawn. Let’s take a closer look at what happened and what the tribunal said
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A tax accountant who spent a decade at an accounting firm has lost a claim for unfair dismissal despite ‘shambolic’ process of promoting him to partner
Christopher Watson joined accountancy firm Wallwork Nelson & Johnson (WNJ) in 2010 as a trainee tax consultant.
Watson worked for the firm for a decade until 2020 when he was dismissed after a dispute over a salary reduction during the covid pandemic when pay was cut for associate partners.
In an email on 30 April 2020, Watson, who had been an associate partner since 2018 but was still an employee, raised a formal grievance with WNJ citing what he characterised as a salary reduction, referring to having taken legal advice and to his view that he would be entitled to resign and, as an employee, to claim constructive dismissal and unauthorised deductions from wages.
Watson first went to the employment tribunal with an unfair dismissal claim in January 2022 where he lost, before appealing to the Employment Appeal Tribunal in June 2024.
At the first employment tribunal Watson lost over the question of whether he was an employee, worker or self employed, with the tribunal ruling that he was not an employee but a partner.
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The Employment Appeal Tribunal was told that Watson had been in the process of moving from a contract of employment to a contract of partnership which ‘raises a question of employment status’ as the partnership agreement was not agreed for over 11 months. Watson and the firm agreed that the appellant was an employee up until 31 March 2019.
WNJ issued a P45 for Watson on 23 April 2019 and he was removed from the PAYE system as he was technically becoming self-employed from that date until there was an agreement between Watson and the firm.
He had also applied to get affiliate status from ICAEW before becoming a partner, a process which had kicked off in April 2019.
But Watson disputed his remuneration as a partner, which WNJ set at £67,500, an increase from his £54,000 salary. However, he wanted £70,000.
There was a delay in this happening as the firm was ‘experiencing a difficult year’, which also affected the finalisation of the partnership agreement.
By January 2020 an agreement had still not been made, prompting Watson to contact WNJ for written confirmation by 24 January, otherwise he wanted to be put back on the payroll.
At this point, WNJ responded by sending a draft agreement to Watson by 14 January. However, Watson raised issues about the agreement the next day regarding his holiday entitlement, although he did not question the £69,500 salary offer.
After much back-and-forth, Watson contacted WNJ saying: ‘This is a rather odd and bemusing situation to find myself in. I was taken off the payroll without any agreement.
‘I seek to obtain an agreement. It isn’t forthcoming even after eleven months of request. The lack of any agreement and the resulting uncertainty causes me to be off work. I further seek to obtain an agreement and clarify my position so that I may continue working and, prima facie, it appears you are attempting to demote me.
‘I refuse to take unnecessary risk created by cutting corners. I would never allow a client to take this risk by not correctly documenting their transactions and being open to an easy attack by HMRC.
‘Without any partnership agreement, based on the facts (never seen the business accounts, no capital introduced, fixed profit, no partner meetings), my professional view, and personal opinion, is that I am still an employee.’
One of the factors in the dismissal was Watson’s issues with the firm.
The tribunal said that the ‘reason for the dismissal was the breakdown in relations between the claimant and the first respondent [WNJ] and it is therefore possible that the first respondent would have shown that the principal reason for the dismissal was a manifest and irreparable breakdown in trust and confidence, being some other substantial reason capable of justifying dismissal’.
In dismissing Watson’s appeal, tribunal judge Jennifer Eady noted that the employment tribunal did not find Watson a ‘credible witness’, saying he was ‘untruthful where he believed it was in his interests. He was somebody who admitted to lying when sending an email to the first respondent on 10 May 2019.
‘The claimant referred to that in evidence as a white lie. The process of agreeing all the terms of that partnership was somewhat shambolic and took place over a number of months.’
Accordingly, the appeal was dismissed.
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