England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE EATRF 95/1563/B

Royal Courts of Justice

Strand

London WC2

Wednesday, 11 December 1996

B e f o r e:

LORD JUSTICE MCCOWAN

LORD JUSTICE WAITE

LORD JUSTICE POTTER

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ALAN JOHN MCMEECHAN

Appellant/Respondent

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SECRETARY OF STATE FOR EMPLOYMENT

Respondent/Appellant

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(Handed Down Transcript of

Smith Bernal Reporting Limited, 180 Fleet Street,

London EC4A 2HD

Tel: 0171 831 3183

Official Shorthand Writers to the Court)

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LORD MESTON QC (Instructed by Treasury Solicitor, London, SW1H 9JS) appeared on behalf of the Appellant

The Respondent appeared in person

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J U D G M E N T

(As approved by the Court )

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©Crown Copyright

LORD JUSTICE WAITE:

The Respondent to this appeal is a temporary worker whose name was on the books of an employment agency for almost one year, during which he had a series of engagements supplied to him by the agency. When the agency became insolvent, he sought to recover from the Redundancy Fund, under S 122 of the Employment Protection (Consolidation) Act 1978, the unpaid earnings due to him in respect of his last engagement. The Department of Employment refused his claim on the ground that he was an independent contractor and not an employee. That objection was upheld by an Industrial Tribunal but over-turned on appeal by the Employment Appeal Tribunal, from whose decision the Secretary of State now appeals to this court. The amount in this one instance is small (£105.17), but there are said to be many similar cases which would be affected by the outcome.

The proceedings have had an unusual history, in that the claimant, who has at all times represented himself, pursued his claim to employee status before the tribunals below on the basis of his general relationship with the agency. At the level of this court he was allowed to advance an alternative basis for the same claim: namely that he was entitled to be treated as an employee of the agency in respect of the single stint served with the particular client in respect of whom the monies claimed had been earned.

THE FACTS

The contractor (Noel Employment Limited) traded under the description of an employment agency. It was required, as such, by Regulation 9 (6) (a) of the Conduct of Employment Agencies and Employment Business Regulations 1976 (enacted under S 5 of the Employment Agencies Act 1973) to give each worker on its books a written statement containing full details of the terms and conditions of the worker including a statement:

"whether the worker is employed by the contractor under a contract of service or as a self-employed worker".

It will be convenient to refer to that requirement as "the statutory particulars".

Founded in 1978, the contractor's business operated from 61 locations, supplying to clients the skills of workers in fields described as office and secretarial, industrial and catering, accountancy, and nursing and technical. Temporary as well as permanent workers were on its books. It was common ground in this court (and before the tribunals below) that there was no master agreement regulating the general terms of engagement between the contractor and the temporary workers. Every temporary worker was required, however, to complete in respect of each job worked for a particular client of the contractor a form in standard format, to which it will be convenient to refer as "the job sheet". It was a form which, as will be seen in a moment, supplied - or purported to supply (it is unnecessary for the purposes of this appeal to decide whether there was a strict compliance with Regulation 9 (6) (a) or not) - the statutory particulars.

In March 1993 the contractor went into a creditors' voluntary liquidation. Mr McMeechan had by that date been carrying out work for clients of the contractor in the capacity of a temporary catering assistant. In respect of one such job - for a client called Sutcliffe Catering in Swindon - he had not been paid. The £105 due to him in that regard was the subject of the claim already described.

Mr McMeechan's brief evidence to the Industrial Tribunal, as noted by the chairman, was to the effect that he had signed on as a catering assistant at the company's agency in April 1992; that within a week he was offered work at Renault UK; that he worked at various places for specific periods (up to five weeks or two months); that he was given a bundle of blank forms (it is common ground that this is to be understood as a reference to the job sheets) and told to take one to each job; that there were breaks at holiday and Christmas time; that he was treated as an employee by the Inland Revenue for income tax purposes; and that the contractor had held his Form P45. He produced in support of his claim the particular job sheet which had been completed in respect of the work for which he was claiming payment. He was not cross-examined.

The job sheet produced by Mr McMeechan to the Industrial Tribunal (which is accepted - as I have already indicated - to have been in a format in universal use for all the contractor's temporary employees) must now be described in detail.

It was headed with the name of the contractor and began with a series of boxes in which the temporary worker was required to enter his or her name and payroll number, the end date of the week concerned, the nature of the booking, the place of booking, the invoice address, the client account and order number, the person to whom the worker was to report, and the starting day and time. The relevant boxes had been completed by Mr McMeechan on the copy job sheet he produced to the Industrial Tribunal by inserting 15 January 1993 as the week-ending date and 12 January as the starting date. The nature and place of booking were described respectively as general catering assistant and Sutcliffe Catering (Swindon). Beneath those boxes appeared the following statement of the statutory particulars:

Below that were set out the following conditions:

There was then the following paragraph:

There followed an illustrative box showing how hours and overtime were to be calculated and set out in a time sheet of standard format which contained a space for confirmation by the client that the hours had been worked and also contained a reproduction of the following note which also appeared on the face of the job sheet:

Immediately below that note was a space designated for "Signature of Temp" headed by these words:

It will be convenient hereafter to use the term "the Conditions" as a compendious description covering the notes and statements on the job sheet as well as the conditions expressly so described.

THE LAW

This appeal involves a familiar but elusive question - what marks the difference between a contract of service and a contract for services? Many attempts have been made to provide criteria which will simplify the task of the Industrial Tribunals as they wrestle with it in particular instances. The distinction of stating, in a concise form, the balanced approach which the law requires to be adopted in all these cases belongs to the Chairman of the Industrial Tribunal whose direction was approved by the majority of this court in O'Kelly v Trusthouse Forte [1984] 1 QB 90 at page 124. The direction was to:

"consider all aspects of the relationship, no single factor being in itself decisive and each of which may vary in weight and direction, and having given such balance to the factors as seems appropriate, to determine whether the person was carrying on business on his own account."

The empiricism of that approach does not preclude recourse to familiar touchstones which have been found useful over the years. Harvey on Industrial Relations gives a useful summary of them at paragraphs 10 to 53. I do not need in this judgment to mention more than one of them. It is usually referred to as the criterion of mutual obligation. The principle which it enshrines is that if there be an absence on the one side of any obligation to provide work and an absence on the other side of any obligation to do such work as may voluntarily be provided, then that provides a powerful pointer against the contract (assuming that in such circumstances any contract has arisen at all) being one of service.

Temporary or casual workers pose a particular problem of their own, in that in their case there will frequently be two engagements (to use a neutral term) which the tribunal may be called upon to analyse. There is the general engagement, on the one hand, under which sporadic tasks are performed by the one party at the behest of the other; and the specific engagement on the other hand which begins and ends with the performance of any one task. Each engagement is capable, according to its context, of giving rise to a contract of employment. That was acknowledged by this court in Nethermere (St Neots) Ltd v Gardiner and Taverna [1984] IRLR 240 and accepted by the majority in O'Kelly's case (see Fox LJ at page 122 and Sir John Donaldson MR at page 123). It will be convenient at this point to say a word about both categories of engagement.

This is the type of arrangement most frequently found in the authorities. The reason, no doubt, is that the temporary worker's single stints will seldom have been of sufficient length to found an independent claim in their own right for redundancy or unfair dismissal. Nethermere's case (involving outworkers in the garment industry) and McLeod v Hellyer Brothers Ltd and Wilson v Boston Deep Sea Fisheries Ltd [1987] ICR 526 (involving trawlermen performing a succession of single-voyage contracts for the same fleet owner) provide illustrations of how an Industrial Tribunal may be willing in some cases, and may refuse in others, to infer a generalised contract of service from a sustained course of dealing. Those cases also illustrate how the course of dealing relied on for that purpose may in some cases involve a series of single engagements to which the law will, in some instances but not in others, attribute independent contractual effect.

Wickens v Champion Employment [1984] ICR 366 was a case which, like the present, concerned an employment agency, but in a rather different context. The dismissed applicant had indisputably been an employee of the agency's permanent staff, but in order to found her claim to unfair dismissal she had to establish that the employer's workforce of employees was above the minimum limit of 20. Her colleagues on the permanent staff were below that number, and she could accordingly only establish jurisdiction in the tribunal by including the temporary workers on the books of the agency within the category of employees. The judgment given by Nolan J on behalf of the appeal tribunal makes it clear that the applicant was basing her claim on the status of the agency's temporary workers generally (as opposed to making any assertion that at the date of dismissal there were specified temporaries working that day on stints which individually amounted to contracts of employment). It was thus a general engagement case in the fullest sense, and the Industrial Tribunal heard and accepted evidence from the agency's proprietor as to the nature of that general engagement. She said that she was not bound to find work for a temporary; nor, conversely, was the temporary bound to accept a booking made on his behalf. If no work was offered or if work was not accepted by the temporary, then there would be no pay. Nor was there anything to stop a temporary from being on the books of any number of agencies. On the basis of that evidence the Industrial Tribunal found that there was a "minimum of control" over the temporaries and dismissed the application.

The Employment Appeal Tribunal, though expressing reservations as to whether the Industrial Tribunal might have over-emphasised the "control" test in their reasoning, upheld that conclusion. In so doing, it took into account the terms of the standard contract signed by each temporary for each engagement. Those terms, although referring to the contract as one of service (it is accepted that there must be a misprint in the report when the word "services" is used in the plural on page 371 at C to D), included a provision exonerating the contractor from any obligation to provide work for the temporary. There were other provisions which the appeal tribunal regarded as tending to negative an employment relationship. The Employment Appeal Tribunal accordingly held that when the terms of the individual contracts were read against the background of the evidence heard by the tribunal as to the absence of any obligation to provide work or (if offered) to accept it:

".....the relationship between the employers and the temporaries seems to us wholly to lack the elements of continuity, and care of the employer for the employee, that one associates with a contract of service."

Less authority has been devoted to this topic - no doubt because there are normally fewer rights attaching to a single engagement, and because the unpaid temporary worker may be content to recover his claim against a solvent contractor through the ordinary processes of debt enforcement, with no particular motive to claim employee status. The specific engagement did however require consideration (in addition to the primary claim under the general engagement) in the O'Kelly case, for the reason that the Employment Appeal Tribunal had sought in that case to justify their overruling of the decision of the Industrial Tribunal by finding that the latter tribunal had failed to address its mind to the nature of the specific engagement. The majority in the Court of Appeal held that the Industrial Tribunal had been guilty of no such omission; but that its members, on the contrary, had considered the issue (contract of service versus contract for services) fully and independently in respect of both engagements and had reached a conclusion which, on the evidence before them they were entitled to reach, namely that in the particular circumstances neither the general nor the specific engagement gave rise to a contract of service - see Fox LJ at page 122 and Sir John Donaldson MR at page 125.

The nature of the specific engagement when the temporary worker is on the books of an agency was considered by the Employment Appeal Tribunal (Judge Hull presiding) in the unreported decision of Pertemps v Nixon [1 July 1993] (EAT/496/91). The terms of Mr Nixon's general engagement were stated in a contract which he signed with the contractors, and they contain many similarities to the Conditions in the present case. In July 1987 he was offered by the contractors, and accepted, a placement with a client of the contractors, the Metal Box Company, with whom he worked continuously for over three years, until he was told in November 1990 that his services were no longer required. He claimed a redundancy payment from the contractors on the footing that he had been their employee. The Industrial Tribunal rejected that claim so far as it rested on the terms of his general engagement because of the absence of mutuality of obligation. It held, however, that "This situation changed when he was offered and accepted work at the Metal Box Company. There was then a further contract on the terms he had previously signed". The Industrial Tribunal then proceeded to analyse the various indicators as to whether that specific contract between Mr Nixon and the contractors was one of service or for services and held that it had been a contract of service. Its reasoning (as paraphrased by the appeal tribunal at page 4 of the transcript) was as follows:

"It [the Industrial Tribunal] observed that [Mr Nixon] undertook personally to carry out work for remuneration, and was obliged to attend at Metal Box for the hours prescribed. It found that he was under the control, mainly, of the foreman at Metal Box; and it referred to clause 3 of the Contract "he owes the normal common law duties of an employee so far as they are reasonably applicable" and clause 5 (e) requiring Mr Nixon "to comply with all reasonable instructions and requests.....made either by [the contractors] or the client" as being [in the Industrial Tribunal's words] "a very strong indication of employment". Then the tribunal considered whether Mr Nixon was in employment on his own account and concluded that he was not and that, therefore, he was working under a contract of service while at Metal Box."

The Employment Appeal Tribunal found this holding to have been erroneous in law in two respects. The first was that the Industrial Tribunal had taken a wrong view of clause 3 (the importation of "normal common law duties"): far from providing a very strong indication of employment, it provided (so the appeal tribunal held) a strong indication to the contrary. The second was more fundamental: the attribution of employment status to the single engagement (as between the worker and the contractor) was not open to the tribunal as a matter of law. The appeal tribunal said:

"There is no evidence to support the "second contract" hypothesis and indeed it is destroyed by the very terms in which it is postulated by the Industrial Tribunal. There is no authority to support it as a matter of law and nothing in the surrounding circumstances to lead to the implication of such a contract. The inherent illogicality and inconvenience of the hypothesis are further grounds for refusing to make such an implication"

The judgment added that Construction Industry Training Board v Labour Force Ltd [1970] 3 AER 220, Wickens, and Ironmonger v Movefield [1988] IRLR 461 were authorities which fortified their holding. Although that was a case in which counsel was instructed as an amicus to assist the tribunal in the absence of professional representation for the claimant - and all relevant authorities were presumably drawn to the tribunal's attention - there is, surprisingly, no mention in the judgment of the decisions in O'Kelly and Nethermere.

It is common practice for employment agencies to have written conditions governing the specific assignments worked for clients by a temporary worker. There appears to be no consistent practice, however, in regard to stating the terms of the general relationship between an employment agency and its temporary workers so far as they apply to the general retainer on the one hand and the specific stints to be worked thereunder on the other hand. Sometimes, as in the present case, the terms of the general engagement are unregulated by any express written agreement at all. The tribunal is then left to deduce those from oral evidence as to the general course of dealing between the contractor and the temporaries, or from the standard terms applied to specific engagements, or (as in Wickens case) from a mixture of the two. On other occasions the terms of the general engagement and of the particular engagements are set out together in one document - as appears to have been done in Pertemps v Nixon.

THE PROCEEDINGS IN THE INDUSTRIAL TRIBUNAL

Mr McMeechan's Originating Application was made (as such applications are encouraged to be made) without professional assistance. It claimed that he had been employed by the contractor from April 1992 to February 1993. That was clearly a plea that a contract of service had arisen under his general engagement. When he came to give evidence, he produced, in aid of his claimed figure of £105.17, the job sheet relating to his single stint of four days with Sutcliffe Catering. That was not viewed by the Industrial Tribunal as in any way limiting the generality of his claim to employment status, which the tribunal continued to regard as being founded on the terms of the general engagement. The claim of his co-applicant and fellow-temporary Mrs Bond was similarly treated, notwithstanding that in her case she had been working a long-term stint with a single client. The Industrial Tribunal did not enter into any detailed consideration of the terms of the general engagement, but dismissed the claims on the ground that they were concluded by case law. The reasons read:

"4. On 13 August 1993 in Royal v (1) Noel Employment Ltd (2) Secretary of State for Employment [11730/93] another Tribunal sitting in Bristol decided that the applicant was not employed by Noel Employment Ltd under a contract of employment. This is one of the requirements for recovering the money from the Secretary of State and therefore Mrs. Royal's claim against the Secretary of State failed. These applications are pursued by these applicants despite that decision.

5. The facts of these cases are really similar to that in the Royal (above) case. Both these applicants worked for Noel Employment Ltd on a series of temporary contracts. The terms of these contracts stated that the employees were self-employed, but they contained many factors which would indicate a contract of employment, in particular stating:

"You are under no obligation to accept any offer made under paragraph 3 but if you do so you are required to fulfill the normal common law duties which an employee would owe to an employer as far as applicable".

In short, whilst these applicants were working for the agency they were under the control of the companies to which they were sent, and in the case of Mrs Bond it was a long term engagement with Parcelforce.

6. Like the Tribunal on 13 August, we have been referred to Wickens v Champion Employment [1984] ICR 365 which was a claim under S 64 A(1) of the Employment Protection (Consolidation) Act 1978 (as it then was). It was necessary in that case to consider whether temporaries on the books of an employment agency were employed. It was found by the Employment Appeal Tribunal that:

"The contracts between the employers and the temporaries did not create a relationship that had the elements of continuity and care associated with the relationship created by a contract of employment."

If we were meeting this matter anew without any authority we might well take the view that these temporary contracts were temporary contracts of employment. This Tribunal sees no reason why a contract of employment should not be temporary and why it should not be subject to be terminated without any period of notice. It seems to us that it would simplify the law greatly if temporary employees, casual workers and any people who were not self-employed and who were not carrying business on their own account in a true sense, were treated as employees under a contract of employment. However, like the Tribunal on 13 August 1993 we consider we are bound by the decision of the Employment Appeal Tribunal in Wickens v Champion Employment (above).

7. On the basis of that decision we have to find that the applicants were not employed. If they were not employed then they are not entitled to pursue their claim against the Secretary of State for Employment. We reach that conclusion with regret but it is one from which we can see no way out."

THE PROCEEDINGS IN THE EMPLOYMENT APPEAL TRIBUNAL

When Mr McMeechan appealed from that decision to the Employment Appeal Tribunal, his claim appears similarly to have been treated as a claim to have his general engagement treated as a contract of service. That is implicit in the judgment given on behalf of the appeal tribunal by Mummery J (now reported in [1995] ICR 444), where there is no independent reference to any specific engagement. Lord Meston QC, who also appeared before the appeal tribunal, has not sought to contend that their decision should be viewed in any other light. Indeed (as will appear) it is central to his submissions that in circumstances such as those of the present case employee status vis-a-vis the contractor is incapable of being achieved at all by reference to a single engagement undertaken by the temporary worker for a client of the agency.

The Employment Appeal Tribunal's first holding was that the Industrial Tribunal had misunderstood the law when they regarded the issue as to whether or not the general engagement amounted to a contract of service as being wholly concluded by authority. Wickens was not authority for the sweeping proposition that the Industrial Tribunal sought to derive from it, and that tribunal ought not to have reached any conclusion without a careful analysis of the general engagement with such assistance as the authorities may provide in regard to the weight to be attached to any particular feature of that engagement. The result of finding such a misdirection would normally, of course, have been a remission to the Industrial Tribunal with a direction to reconsider the issue on a correct approach in law, but the appeal tribunal felt it inappropriate to take that course in the present case, because the terms of the (general) engagement were fully set out in the Conditions on the face of the job sheet, and their true construction, in their factual matrix, was a matter with which the appeal tribunal held that it could properly deal itself.

When considering that question of construction the Employment Appeal Tribunal drew up a balance sheet of the pros and cons regarding the finding of a contract of service. Among the cons were the express denial of a contract of service (condition 1), the reservation to the contractor (condition 3) of the right to place work elsewhere, the absence of any obligation by the temporary worker to accept any offered assignment (condition 5), and the acknowledgment (condition 9) that there might be periods between specific assignments when no work would be available. Among the pros were the agreement (condition 4) to pay weekly wages subject to statutory deductions, the reference (in the "Notes to Temporary") to the sanction of "instant dismissal", the power reserved to the contractor (condition 10) to end an assignment with a client on summary notice without reasons given, and the review and grievance procedures afforded to the worker (conditions 11 and 12). Note was taken of the remaining provisions of condition 5 (importing many of the conventional incidents of a contract of service into the terms of engagement once an offer of an assignment had been accepted) and although there was no specific finding as to the side of the line on which it should be placed, the appeal tribunal appears to have regarded it as qualifying the implications to be derived from the absence of mutual obligations. The appeal tribunal then concluded, standing back and regarding the terms and conditions as a whole, that their overall effect was to give rise to a contract of service.

One minor matter that should be mentioned at this point is that Mr McMeechan had come to the appeal tribunal hearing equipped with a letter from the Inland Revenue which he hoped would conclude the issue. It confirmed that he was treated as an employed person for income tax purposes. The appeal tribunal did not however regard that as carrying the matter any further, and was clearly right to do so. S 134 Income and Corporation Taxes Act 1988 treats workers supplied by agencies as if they were employees for income tax purposes, a deeming provision which cannot affect the use of the term employee in other contexts. The same is true (as the Secretary of State conceded at this hearing) of statutory sick pay, which is likewise the subject of a specific legislative context, with the result that no significance - one way or the other - can be attached to Condition 13.

THE ARGUMENT IN THE COURT OF APPEAL

Lord Meston did not challenge the first holding of the Employment Appeal Tribunal (that the Industrial Tribunal had been wrong to treat the question as concluded by authority). That concession was in my view properly made. The answering of the question whether any particular engagement involves a contract of service or for services is not a task to be discharged by rule of thumb, but by a careful weighing and balancing of the various indicia as interpreted according to the particular context. Nor did Lord Meston criticise the appeal tribunal for dealing itself with the interpretation to be accorded to the general engagement instead of ordering a remission.

Lord Meston submitted, however, that the Employment Appeal Tribunal had itself erred in law in the following respects:

(1) The effect of Conditions 3, 6 and 9, and the first sentence of Condition 5, was to eliminate altogether from the general engagement any possibility of mutual obligation in regard to the provision and execution of work. That alone ought to have led the Employment Appeal Tribunal to find that there was no possibility of treating the general engagement as a contract of service. Alternatively

(2) Although the authorities say that labels are never conclusive, the fact that the temporary workers are described throughout the Conditions (including the statement of statutory particulars) as self-employed becomes irrefutable when taken in conjunction with the absence of mutuality. In the further alternative

(3) The Employment Appeal Tribunal ought to have followed its own decision in Pertemps Group v Nixon in treating the latter part of condition 5, so far as it imported into the general engagement "the normal common law duties of an employee," as militating against, rather than for, a contract of service.

Mr McMeechan's response to these submissions on the general engagement was to repeat, with the good natured persistence that he has maintained throughout his long wait for a very small sum of money, what I suspect he has said to both the tribunals below: "I am only here for the wages I earned for the hours I worked but was never paid for."

As the argument proceeded, it appeared to the members of this court that the relief for which Mr McMeechan was really and primarily asking was to be treated as an employee of the contractor in respect of the stint he served with their client Sutcliffe Catering. Lord Meston, who has been at pains throughout to ensure that Mr McMeechan suffers no disadvantage through his lack of professional representation, did not oppose an alternative case to that effect being advanced at the hearing of this appeal. He strenuously resists it on the merits, however, on the following grounds:

(1) the specific engagement cannot, as a matter of law, be severed, in the way that is proposed, from the general engagement. If the latter is incapable (as he submits it is) of providing the basis of a contract of service, so also must be the former. It would be productive of chaos to allow temporary workers on the books of an employment agency to be treated on the one hand as independent contractors for the purposes of their general engagement with the contractor, and on the other hand as employees of the contractor for the purposes of their individual working stints.

(2) Even if (1) is not a proposition applicable to all cases, it must apply to a case like the present, where the Conditions govern both the general and the specific engagement. It would involve an impossible inconsistency, making the Conditions unworkable in practice, to allow them (or some of them) to be given a different interpretation or effect, according to whether they are applied to a general or to a specific engagement.

(3) If (contrary to (1) and (2)) the individual stint is capable of giving rise at all to an independent contract of employment between the temporary worker and the contractor, the absence of mutual obligation to provide work or to do it is still relevant (and fatally so) for the purpose of construing the terms applicable to it. The importation of "normal common law duties" is as effective in negativing a contract of service in the specific context as it is in the general.

All three of those submissions derive support, he submits, from Pertemps v Nixon.

THE APPROACH TO BE FOLLOWED IN THIS COURT

This is an unusual case procedurally, in that we are faced with a decision by the appeal tribunal based on the nature of the general engagement, and a claim by the worker (which was not raised before either tribunal below) based upon the specific engagement from which the claimed sum was earned. The text-book solution would be to remit the proceedings to the Industrial Tribunal in order that the alternative claim could be dealt with by the tribunal of fact which has not yet had any opportunity of giving it independent consideration. That is not a course, however, which has been urged on us by either side, and this long outstanding claim clearly needs to be resolved as soon as possible. The relevant facts are not in dispute. No industrial expertise is required to resolve the issues, largely of documentary construction, to which it gives rise. and I am satisfied, for my part, that there is no risk of injustice to either side if we were to deal with the alternative claim ourselves.

It is logical to take that claim first, because if it were to be resolved in Mr McMeechan's favour so that he achieves employee status by that route, the issue (raised by the original decision of the Employment Appeal Tribunal and the Secretary of State's appeal from it) as to whether or not he was also entitled to be regarded as an employee under the terms of his general engagement would become academic.

THE SINGLE ENGAGEMENT CLAIM

A. Is it maintainable at all ?

Lord Meston's fundamental submission that no claim to single-stint employee status as between the temporary worker and the contractor is maintainable in law has already been stated. I would reject it for the following reasons:

(1) In a case like the present where the money claimed is related to a single stint served for one individual client, it is logical to relate the claim to employment status to the particular job of work in respect of which payment is being sought. I note that the editors of Harvey appear to take a similar view, where they suggest (at para A [53]):

".....the better view is not whether the casual worker is obliged to turn up for, or do, the work but rather if he turns up for, and does the work, whether he does so under a contract of service or for services."

(2) There is nothing inherently repugnant, whether to good relations in the workplace or in law, about a state of affairs under which, in an employment agency case, the status of employee of the agency is allocated to a temporary worker in respect of each assignment actually worked - notwithstanding that the same worker may not be entitled to employee status under his general terms of engagement. In O'Kelly's case the Industrial Tribunal reached, fortuitously, a decision that both the general and the specific engagement failed to give rise to a contract of service. The importance of the case, however, is that the tribunal did give independent consideration to both heads of engagement, and was held to have been right to do so. Indeed it seems to me to be an irresistible inference from the remarks of Sir John Donaldson at page 125 that the tribunal was regarded as being under a positive duty so to do. Whether or not employee status should, or should not, be so allocated in any particular case will of course need to be resolved as a question of fact according to the particular circumstances of each case.

(3) The force of (2) is not lost in cases where - following what appears to be a common (though potentially confusing) practice - the agency and the temporary worker have committed themselves to standard terms and conditions which are intended to apply both to the general engagement and to the individual stints worked under it. The only result of that fusion is that the same conditions will have to be interpreted from a different perspective, according to whether they are being considered in the context of the general engagement or in the context of a single assignment. That does not make the task of the tribunals any easier, and is liable to lead to the unsatisfactory consequence that the same condition may need to be given a different significance in the one context from that accorded to it in the other. Those disadvantages do not, however, supply any valid reason for denying the temporary worker or the contractor the right to have the issue of contractual status judged separately in the two contexts.

In so far as Pertemps Group v Nixon purported to lay down any principle contrary to those propositions, it should not, in my judgment, be followed. The holding that there was no authority to support the competence of an Industrial Tribunal to spell a contract of service out of a single engagement cannot be maintained in the face of O'Kelly and Nethermere. Nor is any support to be found for it in the authorities on which the judgment in Pertemps purported to rely. Wickens, being a decision on a general engagement, had no application. The obiter dicta of Cooke J in Construction Industry Training Board v Labour Force Ltd [1970] 3 AER 220 at 225 may have provided some justification for the decision of the Employment Appeal Tribunal in Ironmonger v Movefield Ltd [1988] IRLR 461 that, on the special facts there considered, the unusual concept of a contract sui generis that was neither of service nor for services had been called into play. They provide no justification at all, however, for holding that an Industrial Tribunal in entirely different circumstances was excluded, as a matter of law, from finding that a single engagement had given rise to a contract of employment.

B The Merits of the Single Engagement Claim

The issue is whether the individual assignment worked by Mr McMeechan for Sutcliffe Caterers for a period of four days during January 1992, in respect of which he claims his unpaid remuneration, did or did not amount to a contract of service in its own right. That is a question which, though it remains essentially one of fact and degree (O'Kelly's case at page 124 and Lee v Chung [1990] IRLR 236) is one which largely falls to be determined on the interpretation of the Conditions.

Those must, however, be construed according to the context afforded by a specific, as opposed to a general, engagement. That requires them to be interpreted, in my judgment, as follows:

(1) The importation of common law duties by the latter part of condition 5 favours the inference of a contract of service, because even though the notional importation of a master servant relationship is expressed to apply in the first instance only as between the temporary worker and the client, the sub-paragraphs of the condition contain a number of instances where there is a duality of duty owed both to the client and to the contractor. If Pertemps v Nixon purports to decide anything to the contrary, it should, again, not be followed.

(2) The conditions (3, 6, 9 and the first sentence of 5) excluding mutuality of obligation are irrelevant in this context. That is not to say that in the different context of a general engagement they would be without effect. They might there turn out to be of crucial - even decisive - importance. In the circumstances of a specific engagement, however, there is nothing on which they can operate. When it comes to considering the terms of an individual, self-contained, engagement, the fact that the parties are not be obliged in future to offer - or to accept - another engagement with the same, or a different, client must be neither here nor there.

(3) Weighing the Conditions in the way that the law requires, there is to be set on the one side (contract for services) the express statement that the worker is to be regarded as self-employed and not to be working under a contract of service; and the liberty reserved to the worker of being able to work on a self-employed basis for a particular client. On the other (contract of service) side are to be set the reservation of a power of dismissal for misconduct; the power of the contractor to bring any assignment to an end; the provision of a review procedure if such termination takes place; the establishment of a grievance procedure; the importation referred to in (1) above; and the stipulation of an hourly pay rate, which is subject to deductions for unsatisfactory time-keeping, work, attitude, or misconduct.

(4) When those indications are set against each other, and the specific engagement is looked at as a whole in all its terms, the general impression which emerges is that the engagement involved in this single assignment gave rise - despite the label put on it by the parties - to a contract of service between the temporary worker and the contractor.

CONCLUSION

Mr McMeechan is entitled to be treated as an employee of the contractor for the purposes of the single contract governing the engagement which he worked with the client in respect of whom he claims payment.

That is sufficient to dispose of the appeal. The issue raised by the Secretary of State's appeal from the holding of employee status derived from the terms of the general engagement, does not therefore arise for direct consideration. It is an important issue, and the argument advanced on it is a formidable one. But it is not by any means an easy issue, and it is one which is liable to occur again if conditions of the kind that have been considered in this case (which seem to be in fairly general use among employment agencies) fall to be interpreted in the context of a general engagement. Those considerations lead me to think that although it may be tempting to state a view about it in courtesy to the full argument we have received from the Secretary of State, it would be more satisfactory to leave the issue to be decided in a case where it arises for direct decision - preferably between parties who both have the benefit of legal representation.

For those reasons, which differ (to the extent indicated) from those of the Employment Appeal Tribunal, I would dismiss the appeal.

LORD JUSTICE POTTER: I agree

LORD JUSTICE MCCOWAN: I also agree.

Order: appeal dismissed with costs; application for leave to appeal to the House of Lord's refused.