Badara v Pulse Healthcare Ltd

Where employment status is disputed, a tribunal must determine the parties’ real agreement from the full factual matrix. It must consider their relative bargaining positions and whether standard contractual terms reflect the true arrangement. Terms negating mutuality, control or personal service are relevant, but they do not end that inquiry.

A tribunal must give adequate reasons for a finding that a party has been dishonest. A pleaded loss from suspension without pay may be sufficiently particularised by a schedule of loss, even if the amount claimed is inaccurate. An appellate tribunal should remit where material factual findings remain necessary, rather than decide the merits itself.

The claimant had initially worked for the respondent under a contract of service. Later arrangements involved Titan Solutions and then Stallion Ventures Ltd, of which he became sole shareholder and director. He continued to provide care for the same client.

The Bristol Employment Tribunal held that he was neither an employee nor a worker for the purposes of section 230 of the Employment Rights Act 1996. It dismissed his unlawful-deduction claim, refused an amendment concerning holiday pay, and struck out race-discrimination claims.

On appeal, the respondent conceded that the claimant, as the husband of an EEA national, had a right to work during the relevant period. The central issue was whether the Tribunal had properly determined the claimant’s status and the consequential wage, holiday-pay and discrimination claims.

1. Appeal allowed. The Employment Tribunal’s decision could not stand. Its approach to employment status was legally flawed, some conclusions were perverse or unsupported by the evidence, and its reasons were inadequate.

2. The Tribunal had referred to Autoclenz Ltd v Belcher & Others [2011] UKSC 41, but did not properly apply its approach. The question was whether the written contractual documents represented the parties’ real and true agreement. That required a careful examination of the factual matrix, including the parties’ bargaining positions, the distinct Titan and Stallion arrangements, the remuneration arrangements, and the practical working relationship. Contractual clauses excluding mutuality, control and personal service were relevant but were a starting point, not a complete answer.

3. The Tribunal had not adequately investigated that factual material. Its findings that the claimant had proactively sought the arrangement, and its treatment of the relationship between the respondent and the intermediary companies, were not sufficiently supported or explained. Findings that a witness was dishonest require clear supporting material and adequate reasons, particularly where expressed in stark terms.

4. The unlawful-deduction claim had been wrongly treated as unparticularised. The ET1 alleged suspension without pay and resulting financial loss, and the schedule identified loss of earnings for the suspension period. The claimed amount need not be correct if the basis of claim is clear. The Tribunal also gave no adequate basis for treating the broader claim as abandoned.

5. The holiday-pay ruling was affected by an erroneous finding about the date of the amendment. A mistaken date supplied a false premise for the time-limit conclusion. Both that issue and employment status required reconsideration.

6. The respondent’s concession concerning the claimant’s right to work was accepted. The direct and indirect race-discrimination claims for 20 January to 29 April 2015 were therefore remitted.

7. Applying Jafri v Lincoln College [2014] EWCA Civ 449, the EAT could not decide the merits merely because the original Tribunal had erred. Under section 35(1) of the Employment Tribunals Act 1996, the appropriate course was a complete rehearing before a differently constituted Employment Tribunal.

• Employment Appeal Tribunal: Allowed the appeal and remitted the status, unlawful-deduction, holiday-pay and relevant discrimination issues for a complete rehearing before a differently constituted Tribunal.
• Employment Tribunal, Bristol: At a preliminary hearing on 12 October 2015, held that the claimant was neither an employee nor a worker, dismissed the unlawful-deduction claim, refused the holiday-pay amendment, and struck out the discrimination claims.