IT services company Lockheed Martin is facing an
employment tribunal after replacing a self-employed systems
administrator with five years’ service with a cheaper member of
staff.
Tim Tremaine, who was hired to provide round-the-clock network
support for secure government IT sites managed by Lockheed, is
claiming compensation for alleged unfair dismissal after the firm
failed to offer him redundancy or alternative work.
The case, which could set a legal precedent, highlights the
potential risk IT departments face from self-employed contractors
claiming the same rights as permanent employees.
Margaret Davis, head of employment law at Field Fisher
Waterhouse, said that although the law is still developing,
employers needed to be cautious.
"I would be very nervous if a client told me an individual
[contractor] had worked at an organisation for five years, albeit
on a contract that was continually renewed or through a personal
services company," she said.
Tremaine filed a complaint with the employment tribunal after
discovering an internal memo that appears to show that Lockheed did
not renew his contract so that it could replace him with another
contractor charging £10 an hour less.
In a memo shown to Computer Weekly, chief information officer
Tom Dixon said Lockheed had found a cheaper replacement for
Tremaine, called Dave.
The memo said, "Dave has quoted us an hourly rate approximately
£10 an hour less than Tim’s current rate. Based on my experience
with Dave’s work, which I rate as outstanding. I have given…
direction to bring Dave on as a contractor as soon as
possible."
Tremaine, who works through his one-man company, Yourlife,
claimed he should have been offered the opportunity to renegotiate
his rates or find alternative work within Lockheed Martin.
"I was shocked. I had been told every year, ‘Your contract will
be renewed, we are very happy with your services.’ I was more
shocked when I found out they had found someone cheaper," Tremaine
told Computer Weekly.
Lockheed Martin said Tremaine was never one of its employees,
but was employed by his own company Yourlife, under contract with
recruitment agency Advanced Resource Managers.
"Since he was not an employee of Lockheed Martin, it would be
inappropriate for us to comment pending litigation," said a company
spokeswoman.
Andrew Brown, employment partner at law firm Herbert Smith, said
it was important for firms to keep a sharp distinction between
contractors and permanent staff if they are to avoid contractors
claiming employment rights.
Tremaine said he had received letters from Advanced Resource
Managers, which has offices at Lockheed’s Hampshire headquarters,
attempting to persuade him to drop the case.
The company said, "We are dismayed by these allegations.
Advanced Resource Managers supplied a contract to Yourlife, which
clearly stated the contract end date. There has been no contractual
breach."