A solicitor who unlawfully worked full-time for a law firm on a self-employed basis is entitled to the same legal protections as a salaried employee, the Employment Appeal Tribunal (EAT) has ruled.

The ruling overturned an earlier employment tribunal (ET) judgment that, because the contract between the solicitor and law firm was ‘tainted by illegality’ – it set out to mislead HM Revenue & Customs (HMRC) for financial gain – no claim could be pursued on it.

Solicitor Stephen Connolly worked for Lancashire firm Whitestones from September 2006 until July 2009, and was paid on a self-employed basis. He told the ET that his contract with Whitestones was initially for six months on this basis, and was then to be reviewed.

He said that over the ensuing period, he became concerned about his tax status and made ‘numerous requests’ for a review, but to no effect. In the meantime, the firm was treating him as an employee, paying for his practising certificate and CPD training.

When the firm ended the arrangement, Connolly – as an employee – brought proceedings before the ET for unfair dismissal, breach of contract and holiday pay. However, the ET, while accepting that Connolly was an employee, ruled that the contract between him and the firm was ‘illegal in its performance, from which it followed that (he) was unable to pursue his claims upon it, which were dismissed’.

Connolly appealed and the EAT’s Judge Richardson overturned the earlier judgment on the grounds that the contract could be found to be illegal ‘if and only if’ the ET ‘positively found that Connolly claimed self-employed status to HMRC knowing that it was unsustainable to do so’.

Richardson said that the employment tribunal had not addressed Connolly’s argument that he had repeatedly tried to regularise his employment status with the firm. He said the tribunal also failed to ensure that it was put to Connolly ‘squarely’ that he knew that his claim to self-employed status was not genuine.

Richardson upheld Connolly’s appeal and remitted the case for rehearing.