Tribunal: Solicitor was an independent contractor
A solicitor who accepted a redundancy package and then became a consultant to work on a specified list of files has failed to convince an employment tribunal that he was an employee throughout.
Nicholas Mills sued Wolverhampton firm Stephensons (not to be confused with the North-West practice of the same name), claiming unfair dismissal, breach of contract/wrongful dismissal and unpaid holiday pay.
The tribunal held a preliminary hearing to consider the effective date of termination and his employment status after 14 February 2022, when he signed a redundancy agreement.
Mr Mills, a personal injury and employment solicitor, worked at the firm for just under 13 years before accepting a redundancy package that included payment in lieu of notice, accrued holiday pay, and £10,608 in statutory redundancy pay.
On the same day, Mr Mills signed a consultancy agreement, starting three days later.
The consultancy role was clearly defined; Mr Mills was to complete “a finite and exhaustive list of personal injury and related matters”.
The tribunal recorded that he determined when, where and how the work was performed and was under “minimal supervision”. Mr Mills stayed in this role for two years until the final file on the list had been completed, invoicing consultancy fees totalling nearly £85,000.
Employment Judge Hussain held: “The work was project-based, outcome-linked, and commercially structured in a manner consistent with an independent contractor relationship.
“Although elements of the arrangement (such as personal service and limited integration) resemble employment, the overall agreement was directed towards the completion of a specific, exhaustively listed body of work, and was not characteristic of an ongoing employment relationship.
“The claimant was not an employee or worker during the consultancy period.”
Mr Mills claimed that his redundancy was “a sham” and that he felt “pressured to sign” the February 2022 agreement.
But while “he may have experienced commercial pressure”, the tribunal did not accept that Mr Mills “failed to understand the effect of signing the redundancy letter”.
“That conclusion is based on the claimant’s conduct: he negotiated additional terms for the consultancy arrangement, accepted redundancy and notice payments without protest, and thereafter worked under materially different terms for over two years without raising any contemporaneous challenge to the termination of his employment.”
The tribunal accepted the evidence of the firm’s practice manager that Mr Mills proposed the consultancy role himself.
The judge went on: “The claimant is a solicitor that advises on employment law matters and from this it can be inferred that the claimant had an understanding of the implications of signing a document which makes clear that his employment is being terminated by reason of redundancy.”
Mr Mills tried to convince the tribunal that his consultancy agreement was part of his continuing contract of employment. Judge Hussain said: “This is not borne out by the evidence.”
Documents presented to the tribunal showed a steep decline in the amount of personal injury work that Stephensons had between 2019 and 2022. The department was described as “increasingly unviable”, with new instructions falling from “dozens” to only three by 2021.
“There is no reliable contemporaneous evidence supporting the claimant’s assertion that redundancy was engineered to remove him for personal reasons,” Judge Hussain held.
There were “overwhelming indicators of independent contractor status” thereafter.
“The claimant bore substantial financial risk, receiving no salary, pension, holiday pay, or benefits. Payments depended entirely on successful recovery in individual cases, and ledger entries confirm that remuneration was sporadic and wholly outcome-dependent and his caseload was finite and diminishing.
“He was not integrated into the respondent’s organisational structure in any meaningful sense, he had no designated office, worked predominantly from home, was not included in payroll or HR procedures, and operated without supervision or accountability mechanisms.”
Facilities such as APIL membership and occasional office access did not displace his contractor status.
While there was a non‑competition clause in the consultancy agreement, the tribunal found it did not in practice preclude Mr Mills from pursuing other work or to bind him into an exclusive economic relationship with Stephensons.
As a result, the effective date of termination was 14 February 2022 and the claims of unfair dismissal and notice pay were time-barred, while Mr Mills was not a worker within the meaning of section 230(3)(b) of the Employment Rights Act 1996 and so his claim for holiday pay was also not well founded.