The new world for IT Contractors since the Andrew Tilson Employment Law verdict


Andrew Tilson

The Tilson verdict could push more contractors into the nets of IR35 and make clients more wary of employing contractors.

Recently contractor Andrew Tilson went to an employment tribunal and claimed that he had been unfairly dismissed by rail infrastructure company Alstom.

He worked there from August 2004 to November 2006.

His contract was suddenly terminated with just a week‘s notice.


He fought that and recently an employment tribunal agreed that he was an employee of Alstom even though his contract was with the agency.

The Employment Tribunal ruled that this arrangement and the contract was a sham and that he was a de facto employee of the company .

He acted in just about all manners in the same way as the other employees acted.

He wasn‘t in business in his own account.

Box Open

It seems that this case could open a Pandora‘s Box and allow more contractors to claim unfair dismissal when their contracts are terminated.

Also, contractors have said for a long time that they were deemed for a long time to be disguised employees just for the sake of getting more taxes from them and they got none of the benefits or job security that came with being an employee.

Now, it seems that they have got those rights and can sue any company that they feel unfairly dismisses them.

New World

However, do contractors want those rights?

Some would, but one suspects that most wouldn‘t.

Think of the consequences of the ruling.

One of the reasons that clients hire contractors is for flexibility.

That‘s why they are taking contractors on now when they are not hiring permies.

They don‘t know what is going to happen to the economy next so they don‘t want to take any log term decisions as regards hiring long term staff.

That‘s why contractors are not being hit too badly in this downturn.

More Reticent

If companies could be sued for unfair dismissal when they give notice to a contractor and this practice became widespread they would get more reticent to hire them.

Also, why would they pay a contractor double or more what they pay a permanent person when the contractor has the same rights and the same job security?

Also, with the tribunal saying that the contract with the agency was a sham this risks putting more contractors inside IR35 as many of them would have similar contracts and conditions as Andrew had and also pretty similar working conditions and responsibilities.

This may be a victory for Andrew Tilson but surely it is not a victory for IT Contractors.