You are here: Home / News & Resources / Employment Tribunal Update (2)

Employment Tribunal Update: When the cost of choosing the wrong firm to deal with your subbies adds up to £70,000. . .

Ian Anfield | 6th February 2014

Many construction firms use contracts written – with the best of intentions – by accountants and/or HR firms to take care of their CIS tax and employment issues. But what happens when these contracts come under legal scrutiny?

Last year, I was asked to review a Tribunal Judgement for a construction company that had chosen one of the country’s largest HR firms to deal with his labour-only subbies. (I can’t tell you the HR company’s name as the case has not yet been completely settled, but you would probably recognise it if I did.)

The construction company had been taken to an Employment Tribunal by four UCATT-backed CIS subbies who were chasing holiday pay.

When the claim was made, the HR firm had appointed one of its in-house para-legal advisors (i.e. someone with fewer qualifications than either a solicitor or a barrister) to represent the construction company at the Tribunal.

The subbies won their case.

I could see from reading the Judgement that the hearing had been a disaster. In my opinion, the para-legal made a catalogue of errors: from choosing the wrong witnesses, to not disclosing all of the documents required, and failing to ask the most effective questions. The Judge awarded the four subbies holiday pay. And when full details of the subsequent remedy hearing were released in January, they made pretty grim reading: the four subbies were awarded a total of £70,000.

As you can imagine, the construction company that put its faith – and its business – into the HR firm feels devastated, and enormously let down.

It would never have happened to a Hudson Contract client.

If a claim like this had been made against one of our clients, the case would be dealt with and the outcome would have been very different.

For a start, the client would have been protected by our 100% Employment Guarantee – eliminating the risk of having to pay even a single penny to the claimants – but we can say with some certainty that our contract would have lived up to its purpose, because Hudson Contract has an unblemished record at Employment Tribunal.

Construction is not like any other industry. The issues surrounding CIS and employment status are unique to our industry, and this case illustrates why only a specialist in construction such as Hudson Contract, with people who come from a construction background, can really understand and deal with these cases with the respect and caution that they deserve.

If you’re a client: Please spread the word and recommend us to your industry contacts via the Hudson Contract Rewards Scheme

Not a client? Click here to discover how we can eliminate your employment and tax issues – guaranteed

We’ve designed the UK’s strongest, most secure self-employment contracts 

Honest advice underpinned by impeccable service with guaranteed results – that’s the Hudson Contract way. Our service is the blueprint that enables 2,200+ UK construction companies to use labour-only subbies with zero risk of HMRC status issues or employment tribunal challenges. We are fully up-to-speed with all the implications of the Onshore Intermediaries Legislation introduced in 2014.

Find out more

How safe are your current self-employment contracts?

Get an instant contract health check now

Do you make payments under CIS? If so, are you certain your self-employment contracts will withstand scrutiny under the latest HMRC rules? Take this quick, confidential quiz and see if you’re at risk.

Evaluate your risk now Contact us