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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Interlink Express Parcels Ltd v Night Trunkers Ltd & Anor [2001] EWCA Civ 360 (14 March 2001)
URL: http://www.bailii.org/ew/cases/EWCA/Civ/2001/360.html
Cite as: [2001] RTR 23, [2001] EWCA Civ 360
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF
JUSTICE CHANCERY DIVISION
THE HONOURABLE MR JUSTICE FERRIS
Strand, London, WC2A 2LL Wednesday 14th March 2001 |
||
B e f o r e :
LADY JUSTICE HALE
and
LADY JUSTICE ARDEN
____________________
| Interlink Express Parcels Ltd |
Respondent |
|
| - and - |
||
| Night Trunkers Ltd & Anr |
Appellant |
____________________
Smith Bernal Reporting Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
David Phillips Q.C., Mr Richard Serlin (instructed by Messrs Fenwick Elliott for the Appellant)
____________________
Crown Copyright ©
- This is an appeal from the order of Ferris J dated 3 May 2000 whereby it was declared that an agreement dated 1 May 1998 between the appellants, Night Trunkers Limited ("Night Trunkers"), and the respondent, Interlink Express Parcels Limited ("Interlink"), was void, unenforceable and of no effect. This question arose by way of preliminary issue. The nature of the illegality found by Ferris J was that the agreement could not be performed without the contravention by Night Trunkers of Section 2 of the Goods Vehicles (Licensing of Operators) Act 1995. That section prohibits the use of a goods vehicle on a road for the carriage of goods for hire or reward except under an operator's licence issued under the Act. By Section 2(5) a person who uses a vehicle in contravention of Section 2 is guilty of an offence. Section 58(2) contains a provision identifying the person who is to be treated as the person using the vehicle for the purposes of the Act. In effect, so far as material, it treats as the user the person whose servant or agent the driver is. Section 58(2) provides as follows:-
- In his judgment Ferris J set out the background as he found it to be:-
- Ferris J summarised the provisions of the agreement dated 1 May 1998:
- Ferris J heard evidence from a number of witnesses and made the following findings of fact:
- We have been shown Interlink's goods vehicles operator's licence, which was in evidence before Ferris J. It obliges Interlink to report certain matters such as changes in maintenance and inspection safety arrangements. It also contains undertakings by Interlink, in particular to make proper arrangements to ensure that the rules as drivers' hours and tachographs are maintained, that vehicles operate within speed limits and that drivers report vehicle defects promptly.
- The Judge approached the issue which he had to determine on the basis that (in the absence of a contract of service) the question whether a person is the "servant" of another should be determined on the basis of vicarious liability in tort. He referred to a number of authorities, starting with the leading case of Mersey Docks and Harbour Board v Coggins & Griffith [1947] AC 1.
- Having considered the authorities, Ferris J rejected a submission that the Night Trunkers drivers were in the temporary employment of Interlink:
- Ferris J also rejected the submission that the Night Trunkers drivers were agents of Interlink:
- Ferris J considered whether Section 58(2) could be purposively construed so that it was sufficient that Interlink had control over issues relating to public safety:
- The appellant does not contend that Night Trunkers drivers were actually in the employment of Interlink. Indeed the Court has not been invited by either party to examine the contractual arrangements between Night Trunkers drivers and Night Trunkers. The only issues argued by the appellant were:
- The Court has not heard argument on the effect of any breach of the 1995 Act on the agreement dated 1 May 1998.
- Mr Phillips QC for Night Trunkers submits as his core submission that Ferris J confused a temporary transfer of employment with the need for the attendant consents associated with an actual transfer of employment. He submits that at all material times the drivers were on the basis of a temporary transfer of employment servants of Interlink while remaining in the general employment of Night Trunkers.
- Mr Phillips submits that the appropriate test is the same as that for vicarious liability. In that connection it must be shown that the employer is entitled to control both the task and the way the employee performs it. He cites the well-known case of Mersey Docks and Harbour Board v Coggins & Griffith [1947] AC 1.
- Mr Phillips relies on the following passage from the speech of Lord Porter in the Mersey Docks case, above, at page 17, as showing that the critical question is who is entitled to control the way in which the employee performs his work:
- Mr Phillips also relies on Denham v Midland Employers Mutual Assurance Ltd [1955] 2 QB 437. In that case Denning LJ said this at page 443:
- Mr Phillips draws parallels between this case and the Scottish case of McGregor v Duthie (1966) SLT 133. The facts of this case were complex, and they were summarised by Lord Parker CJ in Ready Mixed Concrete (East Midlands) Ltd v Yorkshire Traffic Authority [1970] 1 AER 890 at 896 as follows:
- Mr Phillips particularly relies on this case because the Inner House of the Court of Session found that, notwithstanding the obvious difficulties of the temporary employer having control over the way the driver operates the vehicle, Duthies satisfied the requirement to have control over the general employer's driver, Mr Rothney, because they had delegated to him the authority to take decisions about the manner in which he carried out his duties:
- Mr Phillips submits that the Judge paid too much regard to the actual situation rather than the entitlement of Interlink to control what the driver did during the time he was a driver for Interlink. He points particularly to paragraphs 25 and 27 of the judgment set out above. On his submission, while Interlink delegated to drivers the choice of route until they were in the vicinity of Hartlebury, it was entitled to give directions if it wished to do so as to the route which the drivers took. He submits that the question who pays the employees is not helpful and further that the question of duration of the temporary employment is not one which, as the Judge suggested, he was driven to contend but one which is integral to his analysis.
- Mr Phillips also relies on O'Reilly v ICI Ltd [1955] 3 AER 382, 385. In that case, the Court of Appeal allowed an appeal against a finding that the defendant, to whom the plaintiff had delivered goods on behalf of his employer, became the employee of the plaintiff at the point of unloading. The point on which Mr Phillips relies is that the Court of Appeal thought that such a position could occur as a result of the application of the principles in Mersey Docks & Harbour Board v Coggins & Griffith [1947] AC 1. When one focuses on the driving done by the drivers in this case, the weight of the evidence is that the drivers were the servants of Interlink within the meaning of the 1995 Act. Mr Phillips further submits that the Court should construe the Act so that it can work in a sensible way. If there has to be an actual transfer of employment, the employee is disadvantaged because he has no continuity of employment with Night Trunkers. In addition self-employment would be encouraged.
- Mr Phillips supports his submissions by reference to the transcripts of the evidence given by Mr Christopher Ogg on behalf of Interlink and by Mr Mark Andrew Reddington on behalf of Night Trunkers. Mr Reddington formerly worked for Interlink and agreed the agreement on behalf of Interlink. Mr Ogg's evidence was that if Interlink had a complaint about the conduct of a Night Trunker driver it would refer to Mr Parker, a director of Night Trunkers, who would take the action he thought fit. Mr Phillips also referred to the evidence to show that Interlink was entitled to direct the routes which the drivers took. Again, Interlink would speak to Mr Parker. In addition the evidence showed that copies of the driving licences of Night Trunkers drivers were sent by Night Trunkers to Interlink and that Interlink caused the drivers to have appropriate training on the carriage of dangerous loads. This training was provided by third parties.
- Mr Phillips accepts that for the purpose of his proposition the consent of Night Trunkers drivers was not required. He summarised his submission by saying that a servant for the purposes of section 58(2) of the 1995 Act was a "person whom the owner of a vehicle had the right to direct in the manner in which the vehicle was being driven". He based this proposition on the Mersey Docks case. There would be a number of matters to which the Court would have to have regard in being satisfied that there was a requisite degree of control because of the difficulties of actually controlling a driver in a cab. In this connection (as noted) he relies on the McGregor case. On his submission, the essential question was who had the right to control the driver or the right to delegate the matters to the driver.
- Mr Phillips also relies on the fact that the schedule to the agreement contained the names of drivers as showing Interlink's right to control such persons. However Mr Maskrey points out that these names were only of drivers in Scotland as at the date on which the agreement was signed.
- Mr Phillips does not rely on any analogous statutory definition of servant on these lines.
- Mr Phillips submits that as regards the McGregor case the circumstances for determining a deemed transfer and an actual transfer were the same. As respects the construction of section 58(2), the purpose of the Act was to stop the use of unlicensed lorries and to regulate the use of heavy goods vehicles and keep improperly managed vehicles off the road. The policy is satisfied if a person whose servant or agent the driver is has sufficient control to ensure proper compliance with the Act. The vehicle has to be under the effective control of the licence holder where there is a result of temporary transfer of employment or an informal agency. It is not uncommon for matters to involve a degree of uncertainty. It may be that the courts have accepted vicarious liability in this context because as a matter of pragmatic reality the control test is satisfied. It is sufficient if there is an appropriate degree of control. Then the purpose of the Act is met. This particular agreement had been in operation for ten years before it was terminated so the control must have been fairly efficient. It is difficult to ensure that the policy of the Act is achieved unless the Court adopts a practical approach to determining who are servants and agents.
- Alternatively Mr Phillips submits that the drivers were agents of Interlink. There are two parts to this proposition. First the Night Trunkers drivers were using the vehicles for Interlink's purposes. Second in so doing they were acting under the delegation by Interlink of a task or duty. In this connection he refers to Hewitt v Bonvin [1940] 1 KB 188, 194 and Morgans v Launchbury [1973] AC 127, which establish that, in order to be vicariously liable for the acts of the driver of his car, the owner must have delegated a task or duty to the driver. He submits that the requisite test is satisfied. He further submits that in order for the Night Trunkers drivers to be agents there would be no need for a contract between Interlink and the Night Trunkers drivers. It is sufficient that there was a request by Interlink and an instruction by Night Trunkers.
- Mr Phillips seeks to distinguish Sykes v Millington [1953] 1 QB 770. In this case, a haulier lent vehicles and drivers to a customer. The haulier was prosecuted, because, although he had a licence for use in connection with his own business, the goods were being carried in connection with the customer's business outside the area permitted by the haulier's licence. Even though the customer had a licence which permitted it to hire vehicles, it was held that an offence was committed by the haulier. Lord Goddard CJ held that applying the tests in the Mersey Docks case the drivers were servants of the haulier. He continued:
- As respects the proposition that no man can be an agent of one man and the employee of another with respect to the same piece of work, Mr Phillips submits that the work was different since Night Trunkers' activity was that of supplying the driver whereas that of Interlink was that of driving the vehicles. Alternatively he submits that the proposition cited above was obiter dictum which went beyond what was necessary for the decision in the case. In any event he submits, correctly, that the proposition must be read in its entirety and in the context of the case.
- The second obstacle posed by the Judge was that Night Trunkers would be deemed to be the user of the vehicle as well as the Night Trunkers drivers. Mr Phillips submits that in the event of a prosecution the Court would make the appropriate choice between Night Trunkers or the driver. If the driver was indeed employed by Night Trunkers but an agent of Interlink the Court would construe the deeming provision so that the only user who was relevant was the person whose agent the driver was.
- Mr Phillips accepts that at common law a servant means a person under a contract of service.
- Mr Maskrey QC for the respondent submitted that the 1995 Act contained penal consequences and that the Court was bound to construe it so as to obtain clarity. The Court should avoid a construction under which a person could be subject to a penalty pursuant to a section which is uncertain. On his submission the appellant's argument comes closer to this because he submits the words "servant" and "agent" do not bear their normal meaning. Thus so far as "agent" is concerned, Mr Phillips' submission amounts to saying that agency for the purpose of section 58(2) does not mean a legally binding agency but a situation where there is a relationship or instruction from one to another. Even so, Mr Phillips does not supply a definition of what instructions will suffice. Thus for the last fifty years during which this legislation and its predecessors have been in force the Parliamentary draftsman has been using terms which he does not mean. In consequence Mr Phillips is driven to submit that it is up to the traffic commissioner to determine who should be prosecuted. Problems would arise particularly where a person employs a driver and retains some control over him but lends him to another. It cannot be right that the question who should be prosecuted depends on the unpublished discretion of the traffic commissioner.
- The intention of section 58(2) was that the person who can direct and control the driver should be the user. The clearest way of achieving this is if there is a legally binding agreement between the user and the driver. He submits that there has to be a legal entitlement to control the activities of the driver. This would be so whether the relationship was one of employment or agency. In his submission those terms mean what they say.
- Mr Maskrey draws attention to the fact that Interlink had no idea of the identities of drivers save for those on the original list which related only to Scotland. Accordingly drivers could set off from Interlink's depot without Interlink being aware of their identity. Accidents were reported by Night Trunkers drivers not to Interlink but to Night Trunkers' operations manager, who in fact was also a driver. Therefore and (this is really a forensic point) the operations manager was on Mr Phillips' case at one and the same time an operations manager for Night Trunkers and a temporary employee of Interlink. Temporary employment in this context was a device for the purpose of establishing vicarious liability and required one to assess the degree of control so that if that degree of control was sufficient the person became a deemed servant.
- Mr Maskrey points out that if a deemed temporary servant is a servant for the purposes of section 58(2) there is not one but two deeming provisions although the provision refers to a person whose servant of agent the driver "is" in contradistinction to a person who is deemed to be the user. If correct, Mr Phillips' argument would defeat the policy of the Act since in a case of deemed temporary employment some authority had to remain vested in the general authority. There would then be confusion as to who was able to exercise the authority. Suppose that a Night Trunkers driver receives conflicting instructions from Interlink and Night Trunkers. Since he has not given any consent to any transfer of employment he might well make the wrong choice as to which instructions to follow. This would defeat the purpose of the Act since the user is not then the person able to control a driver.
- The driver must consent and agree to be bound to become Interlink's servant. Even if it is possible for a person to become a servant without giving his consent, the requisite degree of control did not exist here because the evidence showed that Interlink generally exercised its control via Night Trunkers. Thus the control was not adequate to meet even Mr Phillips' test. When Interlink gave instructions direct they did so as a matter of practice not as a matter of legal entitlement. In addition the instructions would be given by Interlink not in its capacity as a user of the vehicle but as occupier of Hartlebury depot. The right to direct the driver at the point of delivery does not make the driver an employee. In this connection Mr Maskrey refers to the evidence of Mr Reddington in cross-examination. Mr Maskrey submits that the driver owed his obligations to Night Trunkers and performed them for Night Trunkers so that Night Trunkers could perform its obligations. That is the correct interpretation of the contractual arrangements and what they intended. As a matter of commercial reality Night Trunkers would have to accept it if Interlink said that they were not having a particular driver but the evidence does not show any legal entitlement in this regard. On disciplinary matters all Interlink could do was make a request. If Night Trunkers said that there should be no action, there would be no action.
- The fact that Interlink's control over discipline, checking references, training, health matters and qualifications was not complete is also relevant to the question of policy of whether a person in the position of Interlink should be able to regard the Night Trunkers drivers as the users.
- Mr Maskrey submits if a Night Trunkers driver only becomes a servant of Interlink when he gets into the driver's cab, that defeats the policy of the 1995 Act. Issues such as the driver's hours and whether he is driving other vehicles or has been drinking are all under the control of Night Trunkers.
- Mr Maskrey makes the following submissions on the authorities. He submits that no case has been cited to the Court which suggests that in the fifty years or so of the 1995 Act and its predecessors artificial transfers of employment will do. He submits that the Denham case deals with the imposition of liability for another's actions. Lord Denning was saying was that if a person gives sufficient instructions he will be responsible. In this context there is no need for a contract of employment. Lord Denning's judgment makes it clear that he is not treating the transfer of employment as a transfer for all purposes. The courts have made it clear that employment does not depend simply on control but on a variety of factors: see Howard v G T Jones & Co Ltd [1975] RTR 150, where the Divisional Court refused to interfere with the justices' decision that an agency driver was not on the facts a servant of the client of the agency. He distinguishes Ready Mixed Concrete (East Midlands) Ltd v Yorkshire Traffic Area Licensing Authority, above, on the basis that the issue in that case was whether there was an actual transfer of employment. Mr Maskrey relies on Alderton v Richard Burgon Associates Limited [1974] RTR 422 in which case also the Divisional Court refused to interfere with the decision of the justices that (on the facts) the driver supplied by an agency to a client was the employee of the client for the purposes of the predecessor of section 2 of the 1995 Act. He submits that it is clear from page 423 of the report that there is no suggestion of a deemed employment. Likewise in O'Reilly v ICI Ltd [1955] 3 AER 382, 387 (another case on vicarious liability) Parker LJ rejected the submission that a driver could become temporarily the employee of the person to whom he was delivering goods on behalf of his employer when he stepped out of his lorry cab and helped with unloading: his employers had not delegated to the client the right to give orders as to how the work was to be done. Jenkins LJ (at 388) also rejected the submission that the plaintiff had discharged the heavy onus of showing that there had been a deemed temporary transfer of employment for the purpose of establishing vicarious liability. So in this case Interlink does not become an employer simply because it could give instructions as to the route.
- Mr Maskrey makes the following submissions on the question whether the Night Trunkers drivers were agents of Interlink. According to Mr Maskrey, Mr Phillips has to submit that the relationship between the Night Trunkers driver and Interlink was not a relationship of real principal and agent because there was no contractual relationship between Interlink and Night Trunkers drivers. Accordingly the appellant has to submit that a relationship less than that of principal and agent is sufficient to create a person an agent for the purposes of section 58(2). On this basis any customer using a haulier's services would become the user. The same point that the traffic commissioners would have a choice whom to prosecute would apply. There would be confusion in legal terms and in the driver's mind. The customer could be prosecuted even though most of the instructions were given by the employer. This is contrary to the policy of the Act and is uncertain and confusing and fails to ensure that the person with the entitlement to control is the person prosecuted. The purpose of the additional words "or agent" is to allow a self employed contractor to act for the user. He does so under the direction of the user .
- Mr Maskrey submits as follows as regards the policy of the 1995 Act. The controlling person is the "user". This to achieve the object of ensuring road safety. The person who has control of a driver is to be the user. In order to establish who is the person with control the common law concepts of "agent" and "servant" are used. If the appellant's submissions are accepted, this would lead to uncertainty in a penal statute.
- Mr Maskrey submits that Sykes v Millington [1953] 1 QB 770 was correctly decided. If a Night Trunkers driver is an agent of Interlink, there will be doubt as to whether Night Trunkers or Interlink is the user and this is unacceptable. It may also involve the further commission of an offence. On Mr Maskrey's submission the driver is driving for Night Trunkers' purposes and he is not an agent for Interlink with whom he has no contractual relationship; he is an employee of Night Trunkers. Night Trunkers is the agent of Interlink. The conclusion of the Judge is unimpeachable. The dictum in Sykes v Millington [1953] 1QB 770, properly interpreted, is correct.
- As regards the McGregor case, Mr Maskrey points out that each case is to be determined on its facts (see page 134) and that the case was distinguished in the Ready Mixed case at page 896. In any event in that case it is clear that it was an actual and not a deemed transfer of employment (see page 142).
- The only statutory context within which the term "servant" has to be considered in this case is section 58(2) of the 1995 Act. Thus in my judgment the starting point is to examine the purpose which section 58(2) serves in the context of 1995 Act. An examination of the 1995 Act as a whole shows that that provision serves to identify the person who is to be treated as using a vehicle for the purpose of the 1995 Act. The identification of that person in turn principally serves to identify the person to whom criminal liability attaches under the following provisions:
- The other contexts in which section 58(2) applies are: (1) the grant of exemptions by a traffic commissioner (s.4), which clearly must correlate with the deemed user of the vehicle, and (2) the saving for liability in nuisance (s.54) which extends not just to the person deemed to be the user under section 58(2) but also to the driver or owner.
- Accordingly section 58(2) of the 1995 Act does not identify the "user" for the purpose of such matters as tachograph regulations, employment protection issues, drivers' hours or drivers' qualifications. Thus it is inappropriate to test the true meaning of section 58(2) against the purpose of regulation on those issues.
- It is in the context of the relevant provisions in the 1995 Act that one must examine the meaning of the term "servant" in s.58(2). The predominant purpose of those provisions is the attribution of responsibility for the actual use made of a vehicle by a person who is requested or directed to use the vehicle, and thus in relation to whom he is a servant or agent: see sections 2 and 3 above.
- Section 58(2) uses the term "servant", which is an archaic term (see the passage cited from Chitty below). But this should not cause the Court to construe the word anachronistically. In my judgment the Court should approach the construction of that term as it would if a more modern phrase, such as "employee", were used.
- It is possible for the word "servant" to bear a different meaning in section 58(2) from that which it would bear in another context. The following passages from Chitty on Contracts, Volume 2, 28 ed (1999), at 39, contributed by Professor M. R. Freedland, illustrate this and in addition that there is often difficulty in ascertaining whether a person is an employee:
- The passages also in my judgment provide the answer to one of Mr Maskrey's submissions. Mr Maskrey submits that the Court should reject Mr Phillips' interpretation of the word "servant" because the 1995 Act is a penal statute and the result of his construction is unclear. However, the fact is that it may well not be easy on the facts of a particular case to determine whether the relationship of employer and employee actually exists. The tests for showing that a person is liable for the acts of an employee on the tests laid down in Mersey Docks & Harbour v Coggins & Griffith involve similar questions of fact and degree. To construe the word "servant" as Mr Phillips submits it should be construed would not add any wholly novel dimension to the penumbra that already surrounds that word.
- Mr Maskrey does not pray in aid the more usual proposition that a penal statute must be strictly construed. It is in any event debatable whether that canon means more than that a penal statute must be given its true construction, not one that is either wider or narrower than that. In any event, that canon would not assist Mr Maskrey greatly as he would then have to submit that in the Ready Mixed case, above, the Divisional Court proceeded on the wrong basis. As respects that case there is no indication in the report that the driver agreed to become the employee of the haulier, and thus I read that case as being concerned not with an actual transfer of employment but a possible deemed transfer of employment on the basis of the principle in Mersey Docks & Harbour Board v Coggins & Griffith, above. I likewise reject Mr Maskrey's argument that the question of who is the user for the purposes of section 58(2) of the 1995 Act is left to the discretion of the traffic commissioner. The questions whether or not a person is a "servant" of another, and if so whom, may be difficult to answer on some facts and entail an assessment of the facts. However, there will generally be only one "employer" who has responsibility for the acts of the servant in relation to the relevant activity, namely the operation of the vehicle.
- I further reject Mr Maskrey's argument that Mr Phillips' argument must fail because there must be a legally binding agreement between the user and the driver. If a Night Trunkers driver agrees to drive one of Interlink's vehicles, and Interlink lends him a vehicle for that purpose, a contract of some kind results. Therefore Mr Maskrey's proposition has to be that there is a legally binding contract of service.
- There are as I see it two answers to that submission. First, the submission emphasises the contractual basis of employment, whereas it is clear from the passage cited from Chitty that a contract, which states that X is a servant, does not conclude that question. There are further questions to be considered (see for example Carmichael v National Power plc [2000] 1 IRLR 43). Second, Mr Maskrey's submission involves importing into section 58(2) a concept of the law of contract rather than a concept of the law of tort. Given that the predominant purpose of section 58(2) is to attribute responsibility for the actual operation of a vehicle to another person, it is in my judgment the terminology of tort that is relevant.
- I was initially attracted by Mr Maskrey's philological argument that if Mr Phillips' argument was right there was not just one "deeming" provision in section 58(2), but two. His argument is that there are two 'presumptions' in section 58 if "servant" means a person with whom the (putative) employer has a contract of service or a person whose employee he is deemed to be for the purposes of vicarious liability, and that, if Parliament had intended that result, it would have expressly said so. But, on reflection, it seems to me that in tort terminology the 'borrowed' servant is commonly, even if arguably inaccurately, referred to as a "servant": see for example the passages cited above from Mersey Docks & Harbour Board v Coggins & Griffith; and the Denham case. In the latter case, Denning LJ specifically referred to such a person 'a temporary servant'. A temporary servant, if properly so called, is nonetheless a "servant".
- I do not accept Mr Maskrey's submission that the inclusion of a temporary servant would defeat the policy of the Act. Section 58(2) applies principally for the very specific purpose of attributing liability under sections 2 and 3, which relates to the actual use of a vehicle without the appropriate licence. The test of who is a temporary employee focuses on control. Section 58(2) does not effectuate the policy of the legislature regarding drivers' hours and the other matters on which Mr Maskrey relied.
- The advantage of the construction of the 'servant' which I prefer is that it attributes responsibility to the person who has control over the relevant activity. In addition, it enables the 1995 Act to keep pace with the changes in the nature of employment, including the increasing use of agency workers to which Professor Freedland refers. The absence of any statutory definition in the 1995 Act of the term "servant" enables the Court to give it a dynamic meaning.
- Accordingly, I conclude that the word "servant" in section 58(2) of the 1995 Act includes a person for whom the putative employer is vicariously liable under the principle of Mersey Docks & Harbour Board v Coggins & Griffith.
- There is no authority which is binding on this the Court with respect to the meaning of servant in section 58(2). However, earlier authorities have proceeded on the basis that the term "servant" includes not only permanent employees but also deemed temporary employees under the principle set out in Mersey Docks and Harbour Board v Coggins Griffith above: see Ready Mixed Concrete (East Midlands) Ltd v Yorkshire Traffic Area Licensing Authority, above and Tribe v Burton (1956) 31 Traf Cas 1 (Transport Tribunal); and see Sykes v Millington, above, where the Divisional Court considered that the principle might have been applicable but that there was no evidence to support it. These cases therefore provide support for the conclusion to which I have come. The concept of temporary deemed employment was known to the law before section 1 of the Road and Rail Traffic Act 1933 from which section 58(2) appears to be derived, and Parliament must be taken to have been aware of it at all material times.
- The next question is whether the decision of the Judge, that Night Trunkers' drivers were not the temporary servants, is susceptible to review by this Court.
- In determining whether the Night Trunkers drivers were temporary servants of Interlink, the Judge identified as applicable the test of control laid down in Mersey Docks & Harbour Board v Coggins & Griffith, above. I agree that this is the applicable test. It is clear that the Judge kept in mind that the burden on the general employer to show that this test is satisfied was "a heavy one and can only be discharged in quite exceptional circumstances" (per Lord Simon in the Mersey Docks case, above, at 10) (see Judgment, para 28). In this area, cases depend on their own facts and are thus illustrative rather than determinative. In the Mersey Docks case, the stevedores to whom the port authority had hired a crane and driver were not liable for the negligence of the driver. They could tell the driver how he was to use "the crane so as to ...assist work, but could not tell him how he was to drive the crane."
- The Judge's conclusion was that it was Night Trunkers who remained the employer of its drivers. In reaching this conclusion the Judge accepted that Interlink could "to some extent at least" control the way to which the drivers drove Interlink's vehicle (Judgment, para. 27, first sentence) but took the view that these were minor matters in the context of the case, "particularly having regard to the degree to which the drivers are, in practice, left to choose their own routes" (Judgment, para. 27, second sentence). The Judge attached greater weight to the fact that Night Trunkers allocated particular drivers to particular routes and vehicles, and the fact that Night Trunkers dealt with such matters as remuneration and discipline (Judgment, para. 27, third and fifth sentence).
- In the context of actual employment, the effect of current jurispudence is that the Court has to take into account a wide range of factors (see for example Howard v G T Jones & Co Ltd, above). The right to control the supposed employee's method of work is one of these factors. However, in the context of temporary deemed employment, the paramount test is that of control (see generally Atiyah, Vicarious Liability in the Law of Torts (Butterworths) (1967), chapter 18, The Borrowed Servant, especially at pages 158-161). Issues as to payment of wages, engagement, dismissal and discipline, while relevant, are subsidiary to this. The Judge's conclusion that, in practice, control over the driver in his cab was not a major matter is unobjectionable, as long as it is borne in mind that control over the employee's method of work is the test which the law as laid down in the Mersey Docks case treats as of critical importance. Moreover, in the absence of actual control by anyone in practice, it is the right to control, not the absence of control, which matters.
- In the first sentence of paragraph 27 of his judgment the Judge acknowledges that the right to control how the driver drove the vehicle rested with Interlink, to some extent at least. His conclusion as to the right to control entirely accords with the evidence and with common sense. There was evidence that Interlink instructed Night Trunkers not to stop en route save in emergencies, as to when to deliver the vehicle for servicing, to complete daily vehicle defect reports, to clean the driver's cab, to comply with arrival and departure times, and to complete time sheets. Interlink was providing the vehicles, had detailed first hand knowledge of them and had an obvious economic interest in seeing that neither the vehicle nor any person suffered damage or injury as a result of improper use of the vehicle or that the vehicles were used to as to result in the loss of the operator's licence. In these circumstances, in my judgment a strong inference of fact arises that the hirer of the driver has the right to control how the driver operates the vehicle.
- As regards the route, Interlink gave the instructions to Night Trunkers drivers through Night Trunkers. It was said that changes of route would have to be done this way and that there was no contractual right to require compliance with Interlink's route instructions. However I do not think that this destroys Interlink's right to control the way Night Trunkers' drivers operated its vehicles. There is no suggestion in the evidence to which we have been directed that Night Trunkers could refuse to pass these instructions on. In my judgment, it can be inferred that a Night Trunkers driver would accept Interlink's instructions regarding the operation of an Interlink vehicle being used on Interlink's business. The evidence which we have been shown does not demonstrate that there was any confusion in the drivers' minds about this.
- I accept Mr Phillips' submission that it is immaterial that Interlink did not exercise its right to control the driver's operation of the vehicle by specifying his route, save in the vicinity of the Hartlebury depot. On the evidence, as accepted by the Judge, Interlink had the right to direct the route. (The evidence also shows that Interlink maintained a route book which all drivers were supposed to follow).
- As respects discipline, Interlink could not directly discipline Night Trunkers' drivers but the important fact is that it could institute action by Night Trunkers and that, so far as drivers were concerned, there was a sanction for failure to observe Interlink's instructions, express or implied.
- Another factor which supported the Judge's conclusion on the right to control the operation of Interlink's vehicles was that it was Interlink which specified the formal qualifications of the drivers and required them (at its own expense) to undertake any necessary additional training. With these qualifications, Interlink would need to give fewer on-the-spot instructions to the drivers as to how to drive its vehicles properly. Another factor which supported the Judge's conclusion was that Interlink tracked all its vehicles by satellite, and could contact the driver at any time by telephone.
- Mr Maskrey contends that Interlink would not know the identity of drivers before they took away vehicles. It seems to me that this is improbable and conflicts with the evidence (1) as to the issue of identity cards, (2) as to Interlink's ability in practice to refuse to give access to a vehicle and (3) Interlink's evident and obvious concern for the security of its vehicles.
- The evidence to which Mr Maskrey refers the Court as to the reporting of road accidents is also unsatisfactory. Clearly, at the scene of the accident the Night Trunkers driver would, if asked, have to give particulars of Interlink's insurance since it was Interlink which maintained road traffic insurance for vehicles driven by Night Trunkers drivers. Presumably, therefore, there was a system within Interlink for all drivers, including those provided by Night Trunkers, to report accidents to it.
- However, the Judge's ultimate conclusion is determined by factors which do not relate to control over the operation of the vehicle. In that respect it seems to me that he fell into error unless those factors did indeed undermine his conclusions on the right to control the employee's method of operating his vehicle. This Court must therefore consider whether or not that is the case.
- The Judge attached importance to the fact that Night Trunkers allocated particular drivers to particular routes and vehicles. It is not however clear why Night Trunkers was given this task and whether it amounted to anything more than an administrative convenience for filling up the "slots" where drivers were required. I agree with the Judge that it is a relevant factor to be weighed in the balance, but consider that there was nothing to show that this initial allocation extended into control over the drivers' method of work when driving Interlink's vehicles. Accordingly this factor should not in my judgment have been given greater weight than the control over the drivers' method of work as the Judge found it to be.
- The Judge was concerned that the conclusion for which Night Trunkers contended was improbable. For my own part, I doubt whether the situation is nowadays unusual. I anticipate that in many fields of work employment agencies lend staff to clients who need them in the expectation that the client will exercise full control over the staff's method of work while remaining the agency's employees. Moreover, if the function of the principle in the Mersey Docks case is to allocate responsibility for torts committed by the supposed employee, the question whether the result is satisfactory may be answered by asking whether the principle produces a fair allocation of responsibility. So far as the point matters, in my judgment, the principle produces a fair allocation of responsibility for the purposes of sections 2 and 3 of the 1995 Act on the facts of this case. It was Interlink not Night Trunkers which maintained the vehicles and checked the drivers' hours and speeds. We are told that in the decade in which the agreement was operated there were no complaints by the traffic commissioner.
- The other factors which persuaded the Judge that Night Trunkers drivers were not temporary deemed servants of Interlink were the facts that Night Trunkers was responsible for paying its drivers, and its power of discipline. However, the former (like powers of engagement and dismissal) cannot be a determining factor since otherwise there could never be a temporary deemed servant. Night Trunkers' powers of discipline stemmed from its own contractual relationship with the drivers and is consistent with the fact that it employed those drivers over and beyond their assignments for Interlink. The critical fact is that Interlink could trigger the disciplinary process. As I have said, this underscores its right to control the way Night Trunkers drivers worked for it, and the point is not abnegated by reason of the fact that the disciplinary process was (save for the first warning letter) handled by Night Trunkers. Night Trunkers had a discretion in disciplinary matters, but there is no suggestion that it could or did use that discretion capriciously rather than in support of Interlink's position. Nor do I consider that clause 17 of the agreement dated 1 May 1998 could affect the Judge's conclusion as regards control.
- In the circumstances I conclude that, while the Judge correctly identified the test to be applied is the facts, he did not in the event apply that test. Accordingly his conclusion in paragraph 28 of his Judgment cannot stand. In my judgment, the conclusions which he should have drawn from the facts were that Interlink had the right to control the way in which the Night Trunkers drivers operated their vehicles, and in all the circumstances that such drivers were properly to be regarded as temporary deemed servants of Interlink and accordingly as its servants for the purpose of section 58(2) of the 1995 Act.
- This question does not now arise and accordingly I express no final view on this point. Suffice it to say that, if my conclusion on the "servant" issue had been different, I am not satisfied that the Judge was in error on this issue. It seems to me that, if the Night Trunkers drivers remained employees of Night Trunkers while operating Interlink's vehicles, and were not temporary deemed servants of Interlink, it was in their capacity as such employees that they drove Interlink's vehicles and (provisionally) I do not consider that they, as opposed to Night Trunkers, can be taken to have assumed responsibility to act as agents of Interlink for the purpose of section 58(2) of the 1995 Act.
- In my judgment, the proposition that a man cannot be the servant of A and the agent of B in performing the same piece of work was not obiter dictum in Sykes v Millington. That decision is not binding in this Court. Even so, the proposition, properly understood in the context of that case, appears to me (again without it being necessary for me to express a final view) to be correct.
- In my judgment, for the reasons given above, the appeal should be allowed and a declaration made that the Night Trunkers drivers were servants of Interlink for the purposes of section 58(2) of the Goods Vehicles (Licensing of Operators) Act 1995 when operating Interlink's vehicles pursuant to the agreement dated 1 May 1998.
- I agree, for the reasons given by Lady Justice Arden, that Night Trunkers' drivers were while driving Interlink's vehicles, the servants of Interlink within the meaning of section 58(2) of the Goods Vehicles (Licensing of Operators) Act 1995. I would prefer to express no view on the difficult issue of whether, had they not been servants, they might nevertheless have been agents of Interlink for that purpose.
- I agree with both Judgments.
LADY JUSTICE ARDEN:
"(2) For the purposes of the Act, the driver of a vehicle, if it belongs to him or is in his possession under an agreement for hire, hire-purchase or loan, and in any other case the person whose servant or agent the driver is, shall be deemed to be the person using the vehicle; and references to using a vehicle shall be construed accordingly."
Background
"4. Interlink offers a service under which parcels and packages are delivered throughout the country, normally on a next day basis. The service operates in the following way. Interlink has a main depot at Hartlebury in the West Midlands. It licences franchisees up and down the country to operate sub-depots at various locations. Persons who want to have parcels delivered bring them to these sub-depots or arrange for their collection by the relevant franchisee who then takes them to his sub-depot. Every evening or night Interlink arranges for the parcels or packages from each sub-depot to be collected by an Interlink goods vehicle which then takes them to Hartlebury, where they are unloaded and sorted. The vehicle then loads up the packages and parcels at Hartlebury which are intended to be distributed from the sub-depot from which it made collections earlier in the night and takes them to that sub-depot. The same is done by other vehicles which have brought packages or parcels to Hartlebury from other sub-depots.5. The carriage of packages or parcels in this way to and from Hartlebury is known at "trunking". It is carried out in vehicles owned or held under hire-purchase agreements, leases or similar arrangements by Interlink itself. These vehicles are painted in Interlink's livery.
6. For the most part the drivers of Interlink's vehicles used on the trunking routes are employed by Interlink under contracts of service. However for a period in excess of ten years Interlink has also used drivers supplied by NT or by associated companies under the control of Mr Parker. The current arrangements under which drivers are supplied in this way are set out in the agreement dated 1st May 1998."
"(1) The agreement was to have effect for a five year period from 1st May 1998;(2) NT was to provide staff to operate certain trunking routes on five nights per week, from Monday to Friday, during every week in the year except Christmas week;
(3) The routes in question were eight routes from sub-depots in the London area and nine routes from sub-depots in Scotland;
(4) Under Clause 4 of the Agreement Interlink was responsible for the provision of the necessary vehicles and trailers, the payment of all operating costs of the vehicles including maintenance and insurance and the loading and unloading of the vehicles and trailers;
(5) Interlink agreed to procure that its insurers would waive all subrogation rights against NT and its staff;
(6) It was expressly provided that NT would not be responsible for any of the operational costs of running the vehicles and that all it would provide was staff and what is described as "the London site" (it is in fact a yard at Gerrards Cross in Buckinghamshire);
(7) Clause 6 provided that "The vehicles will be operated on Interlink's Operator's Licence in Hartlebury";
(8) Interlink was to issue free overalls and safety footwear to NT's staff at the same intervals as it issued them to its own staff;
(9) NT was to provide Interlink with a secure yard facility (that is to say the yard at Gerrards Cross) for the purpose of safe parking of the London vehicles when not in use;
(10) Interlink agreed that in the event of the agreement not being renewed it would reimburse NT in respect of the rent and other costs of the Gerrards Cross yard until the end of the lease (said to be for a 25 year term) under which the yard was held;
(11) By Clause 11 it was agreed that all staff would work within the requirements of the tachograph regulations, that no illegal operations would be undertaken and that, subject thereto, a normal working week of forty hours per driver would be required;
(12) Interlink was to reimburse to NT the costs of staff staying overnight at the Penrith Truck Stop (an overnight stop being necessary on the trunking routes to and from Scotland in order to comply with the regulations concerning drivers' hours);
(13) Interlink was to pay Night Trunkers London (Mr Parker's company which was to discharge NT's obligations in respect of the London area sub-depots) the sum of £40,738.40 per month plus VAT;
(14) Interlink was to pay Night Trunkers Scotland (Mr Parker's company responsible for the Scottish routes) £50,743.64 per month plus VAT and also the cost of the accommodation at the Penrith Truck Stop and also an additional sum of £120 per night plus VAT and accommodation costs for two further drivers;
(15) NT was to pay its staff increases in line with the annual increases given by Interlink to its own staff and the monthly charges to be paid by Interlink were to be increased by the same percentage;
(16) Clause 17 provides as follows:
"In the event of this agreement coming to an end its is agreed that [Interlink] will take on and assume responsibility for all [NT's] staff provided for under this agreement on the same terms and conditions (including without limitation as to redundancy, pensions, and service periods). [Interlink] agrees to reimburse to [NT] any payments to staff and costs (including without limitation redundancy and pensions payments) as a consequence of this agreement coming to an end or its failure to comply with the terms of this clause"
(17) NT was to ensure that the drivers provided by it had certain training and would comply with Interlink's requests for further training which was to be paid for by Interlink."
i) Night Trunkers selects and recruits drivers to be supplied to Interlink under the agreement.ii) Night Trunkers engages the drivers and issues them with a statement of terms of their employment which name Night Trunkers as employer.
iii) The drivers are paid by Night Trunkers and Night Trunkers keeps the relevant employee files and other records.
iv) Night Trunkers pays employers' National Insurance contributions and deducts and pays the employee's National Insurance and PAYE.
v) Night Trunkers disciplines or dismisses drivers in accordance with its own procedures. Indeed the Judge accepted the evidence of a Mr Reddington, formerly an employee of Interlink, that one of the purposes of the agreement was that employment responsibilities of these kinds should rest on Night Trunkers rather than on Interlink.
vi) Interlink provides the vehicles and trailers to be used.
vii) Interlink is responsible for the maintenance of the vehicles which is done at Hartlebury.
viii) Interlink holds a Goods Vehicle Operator's licence. Among other matters the licence includes a number of standard undertakings by Interlink including an undertaking to make proper arrangements so that rules on drivers' hours and tachographs are observed and proper records kept, motor vehicles and trailers are not overloaded, vehicles will operate within speed limits and motor vehicles and trailers are kept fit and serviceable.
ix) Generally each Night Trunkers driver drives the same vehicle each day and is responsible for the daily inspection of the vehicle and for such matters as keeping the cab clean.
x) Night Trunkers decides which of the routes serviced by it is driven by each driver. Normally a driver is given the same route each day but there is a certain amount of change as drivers leave and new drivers are engaged.
xi) Each driver arrives at the Gerrards Cross yard and drives his vehicle to the sub-depot from which he is to make a collection. The time at which he is to leave the sub-depot for the journey to Hartlebury is prescribed by Interlink. This is done so as to ensure that vehicles engaged in providing the Interlink service do not all arrive at Hartlebury at the same time. Each driver is free to select his own route except in the vicinity of Hartlebury when he is obliged to adopt a route specified by Interlink in accordance with conditions attached to its licence for environmental reasons.
xii) The vehicles and trailers which the Night Trunkers drivers use are painted in Interlink's livery.
xiii) While on duty Night Trunkers drivers wear Interlink's uniform, as do drivers directly employed by it.
xiv) All drivers have an identity card provided by Interlink. To the outsider there is no observable distinction between drivers supplied by Night Trunkers and drivers directly employed by Interlink.
xv) It is a driver's responsibility to ensure that tachograph records are maintained and they have to be produced to Interlink at intervals. Interlink subjects them to computer analysis and if there is an irregularity an appropriate warning letter is given to the driver concerned under the same procedure as applies to drivers directly employed by Interlink.
xvi) Interlink is entitled to give routine instructions to Night Trunkers drivers as well as its own drivers concerning such matters as the way they drive Interlink's vehicles and behave while at Hartlebury depot. If a Night Trunkers driver has to be disciplined this will be a matter for Interlink to report to Night Trunkers for it to take action.
xvii) If a Night Trunkers driver is unavailable Night Trunkers is expected to provide a replacement.
xviii) Generally Interlink is not concerned with the identities or qualifications of the drivers supplied to it by Night Trunkers so long as those drivers have minimum qualifications referred to in the agreement.
Reasons given by Ferris J
"25. In support of this contention Mr Phillips relied upon the fact that Interlink owns, maintains, insures and pays all the running costs of the vehicles; that the vehicles are painted in Interlink's livery and used exclusively in order to carry on Interlink's business by transporting goods from Interlink's franchisees to Interlink's depot at Hartlebury; that the drivers wear Interlink's uniform; that Interlink deals with such matters as the tachograph records and the reporting of vehicle defects; and that under the agreement Interlink accepts all liabilities arising from the carrying on of the business in exoneration of NT and its drivers. Mr Phillips also relied upon the fact that Interlink holds an operator's licence and has given the undertakings referred to in the licence, but I do not find these matters of assistance in deciding the issue which I have to determine. The other factors relied upon by Mr Phillips have some weight, particularly that concerning the ownership of the vehicles although, as the Ready Mixed Concrete case shows, this is not conclusive.26. Mr Phillips relied to a considerable extent on what Denning LJ said in Denham v Midland Employers Mutual Assurance Ltd. That passage showed, he said, that the absence of specific consent by the individual drivers to a change in their employment was not fatal. Further he relied upon the description of the concept of a temporary transfer of employment as a 'device', thus giving it the air of a legal fiction. He accepted, however, that in the end the question is whether the test of control propounded in the Mersey Docks case is satisfied.
27. As to this, I accept that Interlink can, to some extent at least, give instructions to NT's drivers, as well as to its own drivers, as to how they are to drive Interlink's vehicles, particularly in respect of such matters as route and speed. But these seem to me to be comparatively minor factors in the context of this case, particularly when regard is had to the degree to which drivers are, in practice, left to choose their own routes. Much more important, as it seems to me, is the fact that NT, not Interlink, decides which of the trunking routes allocated to NT is to be driven by an individual driver and which of Interlink's vehicles that driver is to use for the purpose. The fact that changes in these respects are infrequent does not alter the fact that the relevant decisions are made by NT. I also attach considerable significance to the fact that it is NT which deals with such matters as wages, deductions from wages, holiday entitlement and discipline. There is no suggestion that these matters are attended to by NT on behalf of Interlink. They are done on its own behalf. Mr Phillips was driven to contend that each NT driver is the employee of NT when he arrives for work at the Gerrards Cross yard, becomes a temporary employee of Interlink when he gets into the driving cab of an Interlink vehicle, remains an employee of Interlink throughout the journey to Hartlebury and back, but becomes an employee of NT once more when he get out of the Interlink vehicle on return to the Garrards Cross yard. It seems to me that this represents a highly improbable analysis of the relationship of the driver to NT and Interlink respectively. Moreover it is, in my view, an analysis which is difficult to reconcile with Clause 17 of the agreement, which, by providing that Interlink will employ NT's staff if the agreements comes to an end, seems to assume that until that time the staff will be the employees of NT alone.
28. Looking at the facts of this case as a whole and bearing in mind what was said in the Mersey Docks case and the Ready Mixed Concrete case about the presumption against there having been temporary transfer of employment, I conclude that the drivers supplied by NT to Interlink under the agreement remain the employees, or in the statutory language the 'servants', of NT."
"32. For some time I thought that the solution might be found in the contention that, while the drivers supplied by NT remain at all times the servants of NT, they are the agents of Interlink while they are driving Interlink's vehicles on Interlink's business. There are, however, two main difficulties in the way of such a contention. First it does not by itself lead to the result which is sought. It is necessary to go further and to say that where a driver is the servant of A but the agent of B, only B is to be identified as the 'user' of the vehicle which the driver drives or that if both A and B are the 'user' it will suffice if one of them holds an operator's licence but the other does not. I find that this further step is not one which it is possible to take as part of the process of construing the statute. The second difficulty is that, when the question is considered rather more deeply, it does not appear to be right to regard the drivers supplied by NT as the agents of Interlink. There is certainly no contract of agency between them and Interlink. Moreover, although they have authority to drive Interlink's vehicles when told to do so by NT, they do not have any authority to carry out anything more than ministerial acts on behalf of Interlink. I bear in mind the statement of Lord Goddard in Sykes v Millington that"[A] man cannot be the servant of A and the agent of B in performing the same piece of work"
The true analysis is, I think, that NT's drivers are, while they are driving Interlink's vehicles, the servants or agents of NT in enabling NT to perform its contractual obligations to Interlink."
"29. During the course of the hearing I did not conceal that fact that I find this conclusion, or rather the consequences which appear to flow from it, unattractive. One would have thought that the purpose of a definition such as that contained in Section 58(2) is to enable one to identify in relation to each vehicle which is being used for the carriage of goods for reward someone who can be identified as the operator who can be required to hold an operator's licence and thus subjected to the controls and discipline which the legislation provides for. If it had been possible to identify Interlink as the 'user' of the vehicles driven by the drivers supplied by NT the result would, I should have thought, be perfectly satisfactory from the point of view of the proper regulation of road haulage, notwithstanding that the user of the vehicles and the employer of the drivers were two different persons. If the statutory definition has the effect contended for by Interlink, the resulting illegality appears to me to be of an arbitrary and technical nature, not involving anything which is inherently wrong. Unfortunately it is not open to NT to escape from the difficulty by obtaining a licence itself, for it would not be granted a licence in respect of vehicles which are mentioned in Interlink's licence.30. The effect of the legislation, if Interlink is correct in this case, is that all the drivers used by an operator in the course of its road haulage business must be employed by that operator under a contract of service. While it is readily comprehensible that operators must be in a position to ensure that those persons whom they engage to drive their vehicles adhere to the regulations, it is not apparent to me why the engagement must be under a contract of employment. I would have thought it would be perfectly acceptable for the engagement to be under a contract for services made with, for example, a self-employed driver or an agency supplying drivers on a temporary basis without the drivers becoming employees of the operator. It would, of course, be necessary for the operator to be able to ensure that the driver complies with the regulations, but I see no reason why this result should not be achieved by a suitably framed contract for services just as well as by a contract of service. Further I do not see what is inherently objectionable in the control being exercised indirectly, through an independent contractor functioning in the same way as NT. Nevertheless none of these things is permissible if Interlink is right.
31. Prompted by thoughts of the kind described in the two preceding paragraphs I gave some encouragement to Mr Phillips to advance an argument that I should adopt a purposive construction of Section 58(2) in order to avoid these consequences. Mr Phillips, if I may say so, tried valiantly to develop these ideas. It is certainly not due to any want of effort or ingenuity on his part that I have to say that they come to nothing."
Submissions on this Appeal
(1) are the Night Trunkers drivers to be deemed to be employees of Interlink for the purposes of section 2 of the 1995 Act when interpreted in accordance with section 58(2) of that Act? and(2) In the alternative are Night Trunkers drivers agents of Interlink for the same purpose?
Appellant's submissions
Deemed employment
"Many factors have a bearing on the result. Who is pay-master, who can dismiss, how long the alternative service lasts, what machinery is employed, have all to be kept in mind. The expressions used in any individual case must always be considered in regard to the subject matter under discussion but amongst the many tests suggested I think that the most satisfactory, by which to ascertain who is the employer at any particular time, is to ask who is entitled to tell the employee the way in which he is to do the work upon which he is engaged. If someone other than his general employer is authorized to do this he will, as a rule, be the person liable for the employee's negligence. But it is not enough that the task to be performed should be under his control, he must also control the method of performing it. It is true that in most cases no orders as to how a job should be done are given or required: the man is left to do his own work in his own way. But the ultimate question is not what specific orders, or whether any specific orders, were given but who is entitled to give the orders as to how the work should be done. Where a man driving a mechanical device, such as a crane, is sent to perform a task, it is easier to infer that the general employer continues to control the method of performance since it is his crane and the driver remains responsible to him for its safe keeping. In the present case if the appellants' contention were to prevail, the crane driver would change his employer each time he embarked on the discharge of a fresh ship. Indeed, he might change it from day to day, without any say as to who his master should be and with all the concomitant disadvantages of uncertainty as to who should be responsible for his insurance in respect of health, unemployment and accident. . . ." (see also per Lord Simon at page 12, Lord Macmillan at page 13; Lord Simonds at page 18 and Lord Uttwatt at pages 21 to 23).
"Much of the difficulty which surrounds this subject arises out of the nineteenth century conception that a servant of a general employer may be transferred to a temporary employer so as to become for the time being the servant of the temporary employer. That conception is a very useful device to put liability on the shoulders of the one who should properly bear it, but it does not affect the contract of service itself. No contract of service can be transferred from one employer to another without the servant's consent: and this consent is not to be raised by operation of law but only by the real consent in fact of the man, express or implied: see Nokes v Doncaster Amalgamated Colleries Ltd. In none of the transfer cases which have been cited to us had the consent of the man been sought or obtained. The general employer has simply told him to go and do some particular work for the temporary employer and he has gone. The supposed transfer, when it takes place, is nothing more than a device – a very convenient and just device, mark you – to put liability on to the temporary employer; and even this device has in recent years been very much restricted in its operation. It only applies when the servant is transferred so completely that the temporary employer has the right to dictate, not only what the servant is to do, but also how he is to do it: see Mersey Docks and Harbour Board v. Coggins & Griffith (Liverpool) Ltd. Such a transfer rarely takes place, if ever, when a man is lent with a machine, such as a crane or a lorry: nor when a skilled man is lent so as to exercise his skill for the temporary employer. In such case the parties do not contemplate that the temporary employer shall tell the man how to manipulate his machine or to exercise his skill. But a transfer does sometimes take place in the case when an unskilled man is lent to help with labouring work: see Garrard v A.E. Southey & Co. The temporary employer can then no doubt tell the labourer how he is to do the job. The labourer becomes so much part of the organization to which he is seconded that the temporary employer is responsible for him and to him.Applying these principles to the facts found by the arbitrator, I have myself no doubt that if a third person had been injured by the negligence of Clegg in the course of his work, then Le Grands and not Eastwoods would be liable to the third person. So, also, when Clegg himself was killed Le Grands are liable to his widow on the same footing as if they were his masters and not merely as invitors. These results are achieved in law by holding that Clegg became for the time being the temporary servant of Le Grands. There is no harm in thus describing him so long as it is remembered that it is a device designed to cast liability on the temporary employer. The real basis of the liability is, however, simply this: if a temporary employer has the right to control the manner in which a labourer does his work, so as to be able to tell him the right way or the wrong way to do it, then he should be responsible when he does it in the wrong way as well as in the right way. The right of control carries with it the burden of responsibility."
"Duthies had a vehicle, they had not got a driver. A certain partnership who had a contract with Duthies had a driver and lent this driver to Duthies; there was an accident, and the curious feature of it is that one of the members of the partnership was in fact sitting in the cab with the man, his general servant, whom he had lent while the hirer of that servant, Duthies, was miles and miles away. In that case, the sheriff-substitute had held that the servant had become temporarily the servant of Duthies and the Court of Session held that they saw no reason to interfere with that decision."
"It is said, however, that Duthies did not have the right to control Rothney's method and manner of working – and that, in addition, before pro hac vice employment on their part can be established, they much be shown to have been in a position to exercise that control effectively. I am unable to agree with the latter part of that proposition and no authority to which we were referred seems to me to vouch it. In a case involving the driving of a vehicle, I have some difficulty in seeing how the effectiveness of the control which a person has a right to exercise over the driver's manner of driving can be regarded as an essential factor in deciding whether that person is the responsible employer. In many cases no such effective control exists. As Lord Simon put it in the Mersey Docks case (supra), at page 12: "I would prefer to make the test turn on where the authority lies to direct, or to delegate to, the workman, the manner in which the vehicle is driven. It is this authority which determines who is the driver's 'superior' ". The facts of the Mersey Docks case were, of course, considerably different from those in the present case inasmuch as the general employers there owned the vehicle (crane) which their employee had to drive. Nevertheless, I think that Lord Simon's test is equally applicable to the present case – and the "authority" to which he refers seems to me in this case to have lain in the hands of Duthies. If, for example, Duthies had decided that the pot-holes on the road to Corpach constituted a danger to their lorry if driven at speed, the right would have resided in them, and not in Brebner or Sharpe, either to instruct Rothney not to drive above a specified speed or to delegate to him a discretion to drive at such a speed as he considered to be safe in the circumstances. The fact that nobody might in fact be there to ensure that those instructions were obeyed, or that discretion properly exercised, can make no difference."
Agency
"One has only to take the ordinary case of a person hiring a car and a driver from a garage for a day. The person who has hired the car gives his orders to the driver where he wants to be driven. It is part of the contract between the garage proprietor and the driver that the driver will drive the person who has hired the car to where that person wants to go, and the person can no doubt say to the driver: "I want you to drive faster" or "I want you to drive "slower," but if the master has instructed the driver not to drive the car at more than 50 miles an hour, and the hirer told the driver to exceed that speed the driver could not be forced to do so."
Lord Goddard also rejected the argument that the drivers would be "agents" of the customer:
"The material words are: "When a goods vehicle is being used on a road for the carriage of goods . . . the person whose agent or servant the driver is, shall, for the purposes of this Part of this Act, be deemed to be the person by whom the vehicle is being used." The only question is, therefore: were the persons who were driving these vehicles the agents or servants of the respondent? The justices would not decide whose servants they were, but decided that they were the agents of the company. With all respect to the justices, a man cannot be the servant of A and the agent of B in performing the same piece of work. He is either the servant or A or the servant of B. If my servant is driving my car as my servant, the mere fact that I have lent the car to a friend and told my driver to drive him, does not make the driver an agent. He remains my servant all the time. There might be certain circumstances in which a person driving the car would not be the servant because the relationship of master and servant had changed, but there was no evidence here on which the justices could find that the drivers were the servants of any person except the respondent. Therefore, they could not find that they were the agents of the company."
Lynskey J expressed the same conclusion:
"There is no room in this case for the finding that either of the drivers could be treated as being a servant of the respondent for one purpose and agent of the company for another, because only one person is to be deemed to be using the vehicle, and apart from that, it seems to me that the driver, if he is the agent of anybody, is an agent for his employer. He is an agent for his employer in driving the goods for the purpose of earning the hire which the employer gets for the use of his (the driver's) services and the use of the vehicle."
Parker J agreed with both judgments.
Respondent's submissions
Deemed employment
Agency
Conclusions
Meaning of "servant" in section 58(2) of the 1995 Act
"2 (1) Subject to subsection (2) and section 4, no person shall use a goods vehicle on a road for the carriage of goods -(a) for hire or reward, or(b) for or in connection with any trade or business carried on by him, except under a licence issued under this Act; and in this Act such a licence is referred to as an "operator's licence".
. . .
(5) A person who uses a vehicle in contravention of this section is guilty of an offence and liable on summary conviction to a fine not exceeding level 4 on the standard scale.
. . .
3 . . .
(6) Except as provided in subsection (4) and subject to section 4, a person who uses a goods vehicle under a restricted licence for carrying goods for hire or reward is guilty of an offence and liable on summary conviction to a fine not exceeding £500.
(7) A person who uses a goods vehicle for carrying goods for hire or reward on international transport operations under a standard licence which covers the carriage of goods on national transport operations only is guilty of an offence and liable on summary conviction to a fine not exceeding £500."
"39-002 The contract of employment or of service and contracts for services.Contracts of employment were known to the law for many years as "master and servant" contracts, but this terminology now has archaic connotations, and is not found in modern legislation. There is no comprehensive definition of such a contract and the decided cases merely indicate a number of indicia or factors which are relevant to a finding that a particular contract is one of employment, or a "contract of service." . .
39-004
The modern approach to definition of the contract of employment.
The traditional statements of what constitutes a contract of service placed most emphasis on the power of the employer to control the work of the employee, when contrasting that contract with a contract with an independent contractor. The traditional distinction was that whereas the employer could merely direct what work was to be done by the independent contractor, he might also direct how the work was to be done by an employee. The current approach to this distinction, and hence to the definition of the contract of employment, has four [sic] main elements:
(1) the denial of the supremacy of the control test, whilst still acknowledging its importance,(2) the use of some form of "organisation" test,
(3) a growing preference for asking whether the worker is "in business on his own account" - though it has been denied that this is the fundamental test,
(4) the assertion that exhaustive definition is futile and that the method of classification is by the accumulation of relevant factors in each case,
(5) an increasing tendency to treat the distinction as one to be applied at first instance rather than by an appellate court. . . .
39-007
Classification for particular purposes.
Although, as the foregoing paragraphs show, a uniform concept of the contract of employment or service seems to be assumed in legislation and judge-made law, it is nevertheless true that the court will generally classify a relationship in the light of the particular purpose for which the classification is required, and since there is no single test to determine who is an employee it may be possible for the court to classify a particular relationship as employment for the purpose of one of the foregoing rules, but not for another. Insofar as there is a current trend, it would seem to be towards unity rather than diversity of definition, but for the possible emergence of a greater willingness to engage in a different approach to classification in the safety at work field, see the decision of the Court of Appeal in Lane v Shire Roofing Company (Oxford) Ltd. . . .
39-026
Special cases: (2) agency workers.
Where, as now happens in an increasingly wide range of occupations, employment is obtained via an employment agency, radically divergent analyses of the legal relationships may occur. The worker may be held to have contracted with the agency and not with the client under whose control he is placed. In other cases, the worker may be held to have contracted with the client and merely to have received an introduction from the agency. On either view, it has then to be decided whether the worker is an employee. It has been suggested that in the case where the worker is under contract with the agency, there is a sui generis type of contract for the provision of services to a third party. It has also been held that where temporaries on the books of an employment agency were under no obligation to accept bookings offered by the employers, who in turn had no obligation to accept bookings offered by the employers, who in turn had no obligation to find work for their temporaries, the relationship between the employers and the temporaries lacked the elements of continuity and care associated with the contract of employment. Some labour-only sub-contracting arrangements are comparable to employment via an agency, and both systems can raise problems in so far as they can involve the avoidance of the ordinary legal consequences of employment under contracts of employment. For further discussion of the question whether and when an agency worker has a contract of employment either with the agency or with its client business to which the agency sends the worker, and for the assertion that there is no rule of law against there being a contract of employment either with the agency or with the client business, see now McMeechan v Secretary of State for Employment. . . ."
Is the Judge's conclusion that the Night Trunkers drivers were not temporary "servants" of Interlink susceptible to review?
Meaning of "Agent"
Disposition of the appeal
LADY JUSTICE HALE
THE PRESIDENT: