The Appeal court has warned that people shouldn't assume that "because someone looks and acts like an employee, it follows that in law he must be employed". Graeme Bellenger, a partner specialising in employment law at Kidd Rapinet's London Office says: "This case shows that both workers and employers need to be careful: appearances can be deceptive - and costly."

The Court of Appeal were ruling in a case involving a train maintenance engineer, who later became a manager, who worked for Alstom Transport in North London and wanted to bring a claim against the company for unfair dismissal. The man had a line manager, and employees reporting to him, he was authorised to recruit full-time staff, and had to apply to his line manager before taking annual leave. Nevertheless the Court of Appeal, overturning an earlier tribunal decision, decided that the man's services were provided by a third-party contractor, he was on a significantly higher rate of pay than he would have been as an employee, and that he wasn’t in fact, an employee, and had no right to sue for unfair dismissal.

One of the judges, Lord Justice Elias, said the mere fact that there was a "significant degree of integration" of the worker into the organisation was not at all inconsistent with the existence of an agency relationship.

Graeme Bellenger comments: "Looked at from both sides, it's clear there is potential for things to go badly wrong, and in fairness to all concerned, clarity and certainty are called for - people need to know where they stand."

If you feel you may need advice, either as an employer or contractor, or worker,Graeme Bellenger can advise you on the true position. Call him on 020 7024 8064 for further information.