W v Highways England & Ors

For a contract to be implied between parties, it must be necessary to explain their relationship. Where a worker’s dealings with a third party are fully explained by the worker’s employment contract and the third party’s separate consultancy contract, no further contract is implied.

The extended definitions in Employment Rights Act 1996 section 43K may apply to a person who substantially determines the terms of engagement even though that person has no contract with the worker. Agency and knowing assistance claims under the statutory whistleblowing and equality provisions are highly fact-sensitive and should not ordinarily be struck out. By contrast, Equality Act 2010 section 111 is unavailable where the alleged influencer could not commit a basic contravention against the person influenced.

The appellant was employed by Highways England. Highways England separately retained KPMG to provide management consultancy services. The appellant brought whistleblowing, direct sex discrimination and victimisation complaints against KPMG.

At a preliminary hearing, the Employment Tribunal held that no implied contract existed between the appellant and KPMG. It then struck out all claims against KPMG on the ground that they had no reasonable prospect of success. The tribunal dismissed KPMG from the proceedings.

The appellant appealed against the implied-contract determination and the strike-out of potential liability under the extended whistleblowing definition of employer, agency provisions, and Equality Act 2010 sections 111 and 112. The central issue was whether those fact-sensitive routes to liability could properly be eliminated at the strike-out stage.

1. Appeal allowed in part. The Employment Tribunal’s judgment was set aside. A substituted determination was made that there was no implied contract between the appellant and KPMG at any material time.

2. The tribunal correctly rejected the alleged implied contract. The appellant’s employment and remuneration were governed by her contract with Highways England. KPMG’s consultancy contract with Highways England separately explained the appellant’s limited interactions with KPMG. It was therefore unnecessary to imply a third contract. Authorities concerning classification of an existing contract, implication of terms, or vicarious liability did not assist on the distinct question whether a contract existed at all.

3. The tribunal erred in treating the absence of a contract between the appellant and KPMG as decisive under Employment Rights Act 1996 section 43K. A contract between the worker and another person may suffice for the extended definition of employer to apply to a person who substantially determines the terms of engagement.

4. The possible agency routes under section 47B(1A)(b) and Equality Act 2010 sections 109 and 110 depended upon whether KPMG or its employees acted with Highways England’s authority on particular alleged occasions. That required a wider factual inquiry than the implied-contract issue. It could not fairly be resolved by an impromptu factual trial on a strike-out application.

5. The section 111 claim was properly struck out. Under section 111(7), KPMG had to be capable of committing a basic contravention against Highways England. Highways England could not possess a protected characteristic and so could not be discriminated against by KPMG. The section 112 claim was different: it contains no equivalent limitation, and whether KPMG knowingly helped a basic contravention was fact-sensitive.

6. The section 111 claim against KPMG was struck out. The remaining claims against KPMG were remitted to the Employment Tribunal.

• Employment Appeal Tribunal: Allowed the appeal in part and set aside the Employment Tribunal’s judgment: [2025] EAT 18.
• Employment Tribunal, Birmingham: At a preliminary hearing, held that no implied contract existed between the appellant and KPMG and struck out the claims against KPMG. Judgment dated 15 November 2022.