Industrial Tribunals Northern Ireland Decisions

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URL: http://www.bailii.org/nie/cases/NIIT/2003/1266_03.html
Cite as: [2003] NIIT 1266_3, [2003] NIIT 1266_03

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INDUSTRIAL TRIBUNALS

CASE REF: 1266/03

APPLICANT: Teunis Huenestein

RESPONDENT: Fern Computer Services Ltd

DECISION

The unanimous decision of the tribunal is that the applicant was not an employee of the respondent but rather an independent sub-contractor providing computer consultancy services to the respondent. In those circumstances, the tribunal does not have jurisdiction to consider the applicant's claim for unfair dismissal. It is hereby dismissed.

Appearances:

At the outset of the hearing the applicant was represented by Mr M Wolfe Barrister-at-Law instructed by G R Ingram & Co., Solicitors. At some point at or around December 2003 or January 2004, the applicant dismissed his legal representatives and continued his representation himself.

The respondent was represented by Peninsula Business Services Limited.

Summary Reasons

The tribunal found the following facts:-

The applicant was required to provide computer consultancy services in the Caribbean for and on behalf of the respondent in or around April 1999.

The applicant subsequently indicated to the respondent that he would not be able to continue to provide these services and in or around August 1999 the applicant came to Northern Ireland to provide computer consultancy services for the respondent based from Northern Ireland rather than from the Dutch Antilles.

The tribunal found that the basis of the applicant's provision of consultancy services in the Caribbean was through a contractual arrangement entered into by his company HAT Products Curacao and that after the applicant came to Northern Ireland and after this company was on the applicant's own evidence wound up, he continued to invoice the respondent for his services on the letterhead of this now defunct company. The tribunal further finds that this was the pattern of the commercial arrangements between HAT and the respondent throughout the continuation of the relationship between HAT and the respondent.

The applicant contended that he provided these invoices under duress. The tribunal does not find any evidence of duress exerted by Mr Scullin the managing director of the respondent. Mr Scullin gave evidence to the tribunal that for audit purposes he needed to have an invoice from the applicant upon which to pay out his consultancy fees. On many occasions, the applicant was unwilling to provide such an invoice, and on these occasions Mr Scullin had his company secretary, Hazel Johnston, require the applicant to sign a receipt for payments made. Mr Scullin said that this was required for audit purposes to avoid the companies auditors considering that the money paid for the applicant's consultancy fees was simply money that had vanished from the company. On the balance of probabilities, the tribunal considers that this is more likely than not to be true and finds that this was not a situation of the applicant acting under duress.

The applicant contended that he was employed under a contract of employment and the contract was one that was negotiated in or around October 2001. On the evidence before it the tribunal finds that while there were certainly discussions in and around the entry of the applicant into a contract of employment, these were never concluded and while a contract was presented in draft to the applicant, he never signed it and thereafter continued to invoice and receive payment in the manner in which he had previously done so. This happened right throughout the term of the contractual relationship.

The tribunal was concerned when it heard in evidence that the applicant was issuing his invoices on the letterhead of a different Dutch company that the applicant was operating under a contract tainted by illegality. The tribunal was particularly concerned whenever it was presented with evidence that the applicant's consultancy fees were not paid to HAT Products Curacao but rather to the applicant in person. At all times the applicant was paid his consultancy fees gross and not net. The applicant contended that he considered that his tax and National Insurance contributions were being deducted at source and that he was in fact being paid net. The tribunal can find absolutely no basis upon which the applicant could reach this contention. The applicant was being paid what was previously agreed initially in April 1999 between the two companies the sum of $58,000.00 gross per annum. The approximate Sterling equivalent of that is in or around £42,000.00. As he was being paid this, the tribunal finds that it would have been unlikely that the applicant could have considered that tax and National Insurance contributions were payable in addition. In considering the issue of illegality the tribunal considered the case of Colen & Another –v- Cebrian (UK) Ltd [2003] All ER 294 Court of Appeal with particular reference to the participation tests set out at paragraph 23 of the decision. The tribunal has looked at the intentions of parties from time to time and has concluded that it is unable to find that the respondent colluded in any illegality. The tribunal prefers the evidence of Mr Scullin to that of the applicant as being more likely than not on the balance of probabilities to be true. Mr Scullin said very simply that the applicant was an independent sub-contractor and he invoiced and was paid. It was not for Mr Scullin to look behind the applicant's invoices and indeed Mr Scullin told the tribunal that the applicant had assured him that his tax position was entirely in order. This was not denied by the applicant or challenged in cross-examination.

The tribunal finds that the applicant was a sub-contractor and not an employee and in so finding has considered a number of tests particularly discussed in the case of Montgomery –v- Johnson Underwood Ltd [2001] EWCA Civ 318. The tribunal sets out the tests it considered as follows:-

(i) Was there a mutuality of obligation and control? For there to be an employer/ employee relationship there has to be a situation where in consideration for wages or other remuneration the applicant provides his own work.

(ii) In performance of the service is he subject to control from others to the extent that the submission to the control makes one party the master in the relationship.

(iii) Are the other conditions consistent with a contract of service? The tribunal considered whether there was a clear contract for services in existence. The tribunal found that there was no clear contract for services. The only arrangement between the applicant and the respondent was that entered into between HAT and the respondent in or around April 1999, and the only relevant change was the offer of the contract which was never taken up in November 2001. The tribunal finds that the applicant cannot consider that he was working under the new contract because he was not receiving remuneration for which he was arguing in the e-mails of 19 October 2001. Furthermore, the contract presented had a start date of 1 November 2001. The applicant would surely have argued that his proper start date would have been in or around August 1999 which was the date upon which he came to work out of the respondent's office in Northern Ireland. The tribunal also found that as the applicant invoiced and was paid gross that this was consistent with a contract of service rather than a contract of services. The tribunal also found that the applicant was paid on the same fee basis throughout the time of the relationship with the respondent. The tribunal finds that certainly initially the applicant did work for more than one company in that Mr Scullin's evidence that even after the applicant came to Northern Ireland he had to go back to the Caribbean to finish work for a client. This was not challenged by the applicant in cross-examination. The tribunal finds that Fern was a professional client of the applicant's consultancy and is supported in so finding by the fact that the applicant had freedom in how and when he worked. The applicant could choose to work weekends or bank holidays. The applicant did not necessarily have to work a standard 9.00 am – 5.00 pm working day. The applicant did not have to sign the holiday book but rather simply informed Mr Scullin that he would simply not be attending at the premises of the respondent.

(iv) The only evidence that seemed to suggest the applicant was an employee rather than a self-employed independent contractor was the home let referencing form completed by Mr Scullin. Mr Scullin said that the form had been altered. The tribunal has insufficient evidence upon which to make a finding whether or not this is the case. However, it has noted the terms in which Mr Scullin referred to the applicant as a "colleague" rather than an employee. If it was really the case that the applicant was not an employee, the tribunal considers it is more likely than not that this was the terminology that Mr Scullin would have used.

For all of the above reasons the tribunal considers that the applicant was not an employee of the respondent but an independent sub-contractor self-employed providing computer consultancy services. For this reason the tribunal does not have jurisdiction to consider the applicant's claim for unfair dismissal.

Chairman:

Date and place of hearing: 10 October , 9 December 2003 and 10 February 2004, Belfast.

Date decision recorded in register and issued to parties: