Dixon v. Viollet & Anor

An employment award must be made against the legal entity that employed the claimant. A director is not personally liable for the company’s employment obligations merely because he directed the claimant’s day-to-day work or was identified with the trading name. An undisclosed principal does not alter the contractual employment relationship. Where the wrong respondent has been named, the Employment Appeal Tribunal may correct the respondent’s name under section 35 of the Employment Tribunals Act 1996 and rule 10(2)(k), substituting the company that entered the proceedings.

The claimant succeeded before Employment Judge Burns in a claim for approximately seven weeks’ unpaid wages. The order required Mr Dixon and T.HQ to pay jointly and severally, subject to T.HQ being a separate legal entity.

Mr Dixon appealed, contending that he was only a director of Santiago Management Ltd, which traded as T.HQ, and was not the claimant’s employer. The claimant had contracted with T.HQ and believed that Mr Dixon owned or operated it. Santiago had submitted a response to the tribunal claim and was in liquidation. The central issues were the identity of the employer and whether the respondent could be corrected on appeal.

1. Appeal allowed. The order requiring Mr Dixon to pay the award, and the refusal of his review application, were set aside.
2. The contractual documents and evidence showed that the claimant dealt with T.HQ. T.HQ was the trading name of Santiago Management Ltd, which entered into the employment contract. Mr Dixon was a director and directed the claimant’s activities, but that did not make him personally liable for Santiago’s employment obligations.
3. The fact that Santiago was an undisclosed principal did not alter the employment relationship. The claimant’s belief that she was dealing with Mr Dixon, rather than a company, could not displace the legal effect of the contract or the company’s separate liability.
4. Under section 35 of the Employment Tribunals Act 1996 and Employment Tribunal rule 10(2)(k), the Tribunal corrected the respondent’s name by substituting Santiago Management Ltd. Santiago was the sole respondent that had formally entered the dispute and submitted a response.
5. The award therefore applied solely to Santiago Management Ltd in liquidation. The claimant could consider relying on the insolvency provisions in Part XII of the Employment Rights Act 1996 to seek payment through the Secretary of State.

• Employment Appeal Tribunal: allowed Mr Dixon’s appeal, set aside the order against him, and substituted Santiago Management Ltd as respondent.
• Employment Tribunal: Employment Judge Burns, in reasons registered on 26 March 2010, awarded the claimant £1,206.06 plus interest against Mr Dixon and T.HQ jointly and severally, subject to T.HQ being a separate legal entity. An application for review was refused.