UNITE the union celebrated today a potentially groundbreaking legal victory against bogus self-employment at the employment appeal tribunal (EAT).

The union brought pipe-fitter Russ Blakely’s case against employment agency On-Site Recruitment Solutions Limited and payroll company Heritage Solutions City Ltd for the unlawful deduction of wages and national insurance contributions and unpaid holiday pay.

The Reading employment tribunal initially ruled against Mr Blakely, finding he was not a worker, but the EAT – whose decision is binding on all employment tribunals – overturned that decision on appeal.

The EAT ruled that he could be a worker of an employment agency, a payroll company or both.

Unite said the ruling that an individual could be a worker of more than one body “provides the opportunity to dramatically reduce the amount of umbrella/payroll company rip-offs” in future.

The EAT found that Mr Blakely was a worker and that a tribunal deciding whether there is a contract must consider the worker’s intentions and all surrounding circumstances, not just the employer's intentions.

It also found that there was a contract between Mr Blakely and agency On-Site, which was not circumvented by the use of a payroll company.

Unite said the case is the first time an EAT has considered a bogus self-employment appeal involving the use of a payroll company.

Mr Blakely’s case has now been returned to the employment tribunal, which will determine whether On-Site, Heritage or both of them were Mr Blakely’s employer.

The tribunal will also decide on Mr Blakely’s compensation, which is expected to be around £2,500.

Unite assistant general secretary Howard Beckett hailed the “groundbreaking victory … in the fight against bogus self-employment in construction and other sectors.”

He added: “It blows a hole in the way that employment agencies hide behind payroll and umbrella companies and pretend that they are not responsible for the employment of the workers they recruit.

“The fact the EAT held that a worker could be jointly employed by two organisations is a game changer in the campaign against bogus self-employment.

“This decision sends out an unequivocal message to all those involved in bogusly self-employing workers: Unite and our strategic case unit are on your case.”