The 3-d Z(2) lattice gauge-Higgs theory is cast in a partial axial gauge leaving a residual Z(2) symmetry, global in two directions and local in one. It is shown both analytically and numerically that this symmetry breaks spontaneously in the Higgs phase and is unbroken in the confinement phase. Therefore they must be separated everywhere by a phase transition, in contradiction to a theorem by Fradkin and Shenker. It relied on a fully fixed unitary gauge, which prohibits this phase transition explicitly. Thus the unfixed gauge theory is not, in this case, equivalent to the unitary-gauge version.