Self-employed contractor via personal service company: no right to claim unfair dismissal
A self-employed contractor who provided services through his own limited company was not an employee and therefore could not bring an unfair dismissal claim. The tribunal dismissed the claim.
1 min read · Last updated 19 May 2026
Case details
- #personal-service-company
- #sham-contract-allegation
- #tripartite-arrangement
- #ir35
- #consultant-vs-employee
Key facts
- The claimant provided services through his company BIG Solutions under a written agreement.
- The agreement stated a fixed monthly fee of £10,000 plus VAT for two days per week.
- The claimant was not subject to the respondent's HR policies or disciplinary procedures.
- The claimant worked for other clients during the engagement.
- The respondent terminated the agreement on 30 days' notice due to dissatisfaction with services.
- The tribunal found the written agreement was genuine and not a sham.
Timeline
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Initial enquiry
Mr Mizhari enquired about the claimant's company through a third party.
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Meeting to discuss engagement
The claimant attended a meeting at the respondent's offices to discuss potential engagement of BIG Solutions for the Audley Square House project.
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Confidentiality agreement signed
The respondent and BIG Solutions signed a confidentiality agreement.
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Services agreement signed
The Short Form Appointment – Programme Manager Agreement was signed by both parties.
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First additional services letter
ASL1 expanded the scope of services and provided for additional fees.
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Second additional services letter
ASL2 further expanded services and increased the fee, based on 16 days per month.
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Third additional services letter
ASL3 provided for annual CPI increase and continued the 16-day per month basis.
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Termination meeting
The claimant was told the respondent would terminate the agreement due to dissatisfaction with services.
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Written termination notice
The respondent confirmed termination in writing, giving 30 days' notice.
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Claimant instructed to stop work
The respondent told the claimant to stop work immediately and collect his belongings.
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Claim presented to tribunal
The claimant filed a claim for unfair dismissal.
The legal issue
The tribunal had to decide whether the claimant was an employee of the respondent within the meaning of s.230(1) Employment Rights Act 1996, and therefore entitled to bring an unfair dismissal claim.
The outcome
The tribunal dismissed the claim for unfair dismissal because the claimant was not an employee.
The key reason was that the claimant provided services through his own limited company, BIG Solutions, under a written agreement that was genuine and not a sham. The agreement set a fixed monthly fee for two days per week, the claimant was not subject to the respondent's HR policies, and he worked for other clients during the engagement.
No compensation was awarded as the claim failed on jurisdictional grounds.
Lessons & takeaways
- If you provide services through your own limited company, you are unlikely to be an employee and cannot claim unfair dismissal, even if you work exclusively for one client for a period.
- A written agreement that reflects a genuine consultancy relationship will be respected by tribunals, especially if you have control over your work and work for other clients.
- Claiming unfair dismissal requires employee status – check your employment status before bringing a claim to avoid wasted time and costs.
- If you want employment rights, consider negotiating a direct employment contract rather than a consultancy arrangement through a personal service company.
This case shows how important employment status is for bringing an unfair dismissal claim. The claimant, a self-employed contractor, had provided project management services through his personal service company for nearly three years. When the respondent terminated the agreement due to dissatisfaction with services, the claimant argued he was really an employee and had been unfairly dismissed.
What the tribunal decided
The tribunal examined the written agreement and the working relationship. It found that the agreement was genuine and not a sham designed to avoid employment rights. The claimant was paid a fixed monthly fee, worked for other clients, and was not subject to the respondent's disciplinary procedures. The tribunal concluded he was not an employee under the Employment Rights Act 1996, so his unfair dismissal claim could not proceed.
What the respondent did right
The respondent had a clear written agreement that reflected a consultancy relationship. It treated the claimant as a contractor, not an employee, and the tribunal respected that. The respondent also had evidence that the claimant worked for other clients, which undermined his claim of employee status.
Why this matters
This case is a reminder that using a personal service company does not automatically make you an employee. If you want employment rights like protection from unfair dismissal, you need to be employed directly. Tribunals will look at the reality of the relationship, but a genuine consultancy agreement will usually be upheld.
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