England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
MR JUSTICE ELIAS

		Royal Courts of Justice Strand, London, WC2A 2LL
		18 September 2007

Lord Justice Maurice Kay:

1. This is a renewed application for permission to appeal. It was I who refused permission on the papers.
2. The background to the case is that the proposed respondents to the appeal are people from Poland, who came to this country in order to obtain employment. They worked in a food processing factory in Cheshire run by Welsh Country Foods Limited. They went there through the agency of Consistent Group Limited, that company being the proposed appellant here. Consistent is an employment agency, and appears to have a substantial interest in the recruitment and deployment of workers from Poland.
3. To cut a long story short, the workers, if I may so call them, came to this country. They were accommodated by Consistent at various premises in Cheshire and Merseyside, and they were deployed in particular at the premises of Welsh Country Foods Limited. In due course, they presented claims to the Employment Tribunal to the effect that they had been dismissed for a reason relating to trade union membership or activities and/or for asserting a statutory right, that they were victims of a breach of contract in a failure to pay them for their period of notice, and that there had been unlawful deduction from their wages. Inevitably, there arose an issue as to what their precise status was. Their primary case was that they were employees working under contracts of employment with Consistent. However, they ran an alternative case, that they were workers for whom Consistent was responsible. They ran a further alternative case, that if Consistent did not incur liabilities in relation to them, then their relationship with Welsh Country Foods, as workers for that company, enabled them to avail themselves of some of the statutory rights to which I have referred.
4. The decision of the Employment Tribunal was that their primary case was correct; that is, that they were indeed at all material times employees of Consistent, working under individual contracts of employment. Consistent appealed to the Employment Appeal Tribunal, but in a judgment of the President (Elias J), the appeal was dismissed. It is in those circumstances that Consistent seeks to appeal to this court.
5. It is well known that the relationship between agency workers, their agency, and the end user of their services is a complicated one, which upon judicial resolution often results in a finding unhelpful to the workers. In this case, the Employment Tribunal found that the workers were in fact the employees of Consistent. Notwithstanding the express terms of the agreement between Consistent and each employee, the tribunal found that the documents were a sham, that in the circumstances it was appropriate to draw inferences from all the available material, and that such inferences justified the conclusion that the test on whether someone is in fact an employee was satisfied. In order to reach that conclusion, the tribunal had to be satisfied, and expressed itself as satisfied, that the workers were obliged to work as required by Consistent. They were not allowed to decide themselves whether or not to work. They had been refused days off. They had only a limited and constrained ability to delegate their task to substitutes. Moreover, the tribunal held that Consistent was under an implied obligation to provide them with work. The tribunal then considered the question of control, and concluded that, exceptionally, this was an agency work arrangement in which control resided and remained with the agency. The explanation for that is set out in paragraph 5.10 of the tribunal decision.
6. There was then an appeal to the Employment Appeal Tribunal, pursuant to very lengthy grounds of appeal. The grounds ran to some 24 pages, and were settled by counsel who had appeared in the Employment Tribunal and was to appear in the Employment Appeal Tribunal. That was not Mr Andrew Stafford QC, who has appeared before us today.
7. The hearing before Elias J took place within a single day, subject to a reserved judgment. At some stage or other of his judgment, he appears to have dealt with the grounds of appeal as formulated; but it is difficult to escape the conclusion from his judgment that the main issue ventilated before him, and therefore the main issue subjected to analysis in his judgment, was that of control.
8. Suffice it to say at this stage that Elias J considered it to be an exceptional case on control; and when I refused permission on the papers, I observed that the case turned very much on its facts, and that Elias J had justifiably treated them as exceptional. When the matter was called on today, it immediately became apparent that the approach of Mr Stafford to this case is radically different from that of his predecessor; and that his emphasis is not on the issue of control, which he does not abandon, but is on the adequacy, or, as he would have it, inadequacy of reasons in the decision of the Employment Tribunal, coupled with a misunderstanding of the evidence, or, alternatively, a culpable failure to explain why some matters of evidence were apparently rejected.
9. In succinct submissions, unfortunately not foreshadowed by a new skeleton argument, he has shown us aspects of the evidence which do not appear to have been considered by the Employment Tribunal, or, if they were considered, were misunderstood, or their rejection was not explained. In this, as in any other similar case, it is important to establish whether or not the worker was under an obligation to work when called upon to do so by the putative employer. I have referred to the finding of the Employment Tribunal that there was such an obligation. It is in paragraph 5.6 of the decision that that finding appears. Mr Stafford refers us to other evidence adduced by Consistent which tends to fly in the face of that finding: for example, their office manager, Ms Caroline Anderson-Zawadzka, said in her witness statement, and I paraphrase, that the end user's needs were provided on a daily "as required" basis, pursuant to a daily phone call received from the end user in the afternoon, and that the workers on Consistent's list could either accept or reject deployment the following day when asked by Consistent. In the words of the witness:

"They are absolutely free to turn down the offer and no penalty is applied to them if they refuse, apart from that they obviously would not get paid for that day if they do not provide any services".

10. That evidence was not mentioned by the Employment Tribunal. The evidence accepted by the tribunal was that of Ms Bachorska, one of the workers, who had said that if she asked for time off it was refused, and that in practice she had to work when required. That at least is how the tribunal summarised her evidence, and it is the basis upon which it was accepted. Nevertheless, there was before the tribunal documentary evidence produced by Consistent which was susceptible to the finding that if anyone wanted a day off, or wanted not to work when asked, they were free to do so. I refer to pages 217 to 219 of the appeal bundle, and also at pages 204 and following, which tabulate who worked on which days. Those latter pages bring me to a second issue sought to be raised by Mr Stafford. It is to the effect that holidays were permitted and were taken. The contemporaneous documentation is susceptible to the interpretation that that is so. Mr Stafford complains that these were obviously therefore highly controversial issues, and that the decision of the Employment Tribunal in accepting the evidence of Ms Bachorska without more does not explain why Consistent's evidence was rejected; moreover, Ms Bachorska herself, according to Mr Stafford, did to some extent resile from the evidence which was accepted by the tribunal.
11. The third issue was whether Consistent was under an obligation to provide the workers with work. In concluding that it was under no such obligation, the tribunal relied on the contractual document which existed between Consistent and the end user. However, according to Mr Stafford, the uncontradictied evidence of Jane Corbett, the human resources manager of the end user, at page 150 in the bundle, is entirely consistent with the case advanced on behalf of Consistent on this issue. But all this leads Mr Stafford to submit that, in accepting and basing its decision upon the uncontradictied evidence of Ms Bachorska, which is the appearance the decision gives, the tribunal either failed to take into account cogent evidence to the contrary, or, if it was rejecting that evidence, failed properly to explain why it was doing so. He submits that, on final analysis, the tribunal's decision does not satisfy the requirements of English v Emery Reinbold and Strick Limited [2002] EWCA Civ 605. He further submits that these disputes require proper reasoned resolution before the question of whether the agreement between Consistent and the workers was a sham could be addressed, and indeed, before the issue of control could be addressed.
12. Elias J, in the EAT, was not oblivious to issues of this kind. However, he dealt with them briefly in paragraphs 26 and 27 of his judgment, and, it seems to us, without the benefit of the type of submission that we have received from Mr Stafford today. For my part, I would grant permission now that I have heard those submissions on this aspect of the case. That then leads to the issue of control which had originally loomed large. Mr Stafford acknowledges that if that issue stood alone, he would face something of an uphill task in seeking to establish arguable legal error on the part of the tribunal or the EAT. However, he persuasively submits that some of the matters which underpin the finding of control in the Employment Tribunal are the very matters which are the subject of the complaint that he puts at the forefront of his submission. Thus, in paragraph 5.10, the Employment Tribunal on the issue of control said:

"They told them when and where they had to work, they might deny them days off …"

And so on.

13. It follows that if the decision of the Employment Tribunal was flawed on issues such as the obligation to work and the obligation to provide work, this would or might impact on the finding of control. Accordingly, I would extend the permission to appeal to permission to argue that the control test was not in fact satisfied, or that the finding that it was was flawed.
14. These are all difficult matters. In my judgment, it is appropriate to grant permission on the basis that there is a real, as opposed to merely a fanciful, prospect of success. I would direct amendment of the grounds of appeal to this court, so that when the matter is considered by the full court they can see exactly how the case is now put; and I would also direct that there be a new skeleton argument, not of great length, which expands those grounds of appeal.

Lord Justice Longmore:

15. I agree that there should be permission to appeal. This case has been bedevilled by an excess of paper which has served to obscure rather than to clarify the real issues, as put before us in oral argument by Mr Stafford this afternoon. I therefore also agree that there will have to be a new document setting out the grounds of appeal and a new skeleton argument, starting from scratch, putting the first points first instead of last; and I would say as an aspiration, rather than an order, that neither document should exceed eight pages.

Order: Application granted