Industrial Tribunals Northern Ireland Decisions

 
THE INDUSTRIAL TRIBUNALS

CASE REF: 1228/07

CLAIMANT: Tereza Podlesakova

RESPONDENT: Dental World Ltd

DECISION ON A PRE-HEARING REVIEW

The decision of the tribunal is that the claimant was a worker within the meaning of Article 3(3) of the Employment Rights (Northern Ireland) Order 1996 and that therefore the tribunal has jurisdiction to determine her claim under Part IV of that Order.

Constitution of Tribunal:

Chairman (Sitting Alone): Mr N Kelly

Appearances:

The claimant was represented by Mrs Lucyna Palmer.

The respondent was represented by Mr Thomas Sheridan.

THE ISSUE

(1) This is a pre-hearing review before a chairman sitting alone under Rule 18(2)(a) of Schedule 1 to the Industrial Tribunals (Constitution and Rules of Procedure) Regulations (Northern Ireland) 2005 to determine the following issue as notified to the parties;

"Whether the tribunal has jurisdiction to hear the claimant's claim in view of the provisions of Article 3 of the Employment Rights (Northern Ireland) Order 1996 with regard to the definition of "employee" and "worker" contained therein".

Since the claim was under Part IV of the Order, the issue before me could be more precisely defined as "whether the claimant was a "worker" for the purposes of Part IV of the Order, as defined in Article 3(3) of that Order".

(2) The claimant did not attend the hearing. Mrs Palmer stated on her behalf that the claimant was ill and currently in Prague. Neither the respondent or the tribunal had been put on notice that the claimant was unwell or unable to attend this pre-hearing review. The respondent was ready to proceed and since the matter had been set down for hearing for a considerable time and since there was no medical evidence indicating when or indeed if, the claimant could attend a reconvened hearing, I decided to proceed with the hearing in the claimant's absence.

(3) The proper respondent to this matter is Dental World Ltd and the title of the claim is amended accordingly.

RELEVANT FACTS

(4) I heard evidence from Beverley Gray and Linda McVey for the respondent and heard submissions from both Mr Sheridan and Mrs Palmer.

(5) The respondent is a limited company which operates eight dental surgeries within Northern Ireland. The claimant worked in one of those surgeries.

(6) The respondent used a recruitment agency, Optima, to identify dentists in Czechoslovakia who might be suitable candidates to work for the respondent within Northern Ireland.

(7) Beverley Gray was an employee of the respondent with responsibility for recruiting staff.

(8) Optima put forward the claimant as someone they thought might be suitable to work within Northern Ireland. Ms Gray met her in Prague.

(9) The claimant had previously worked in Yorkshire and her command of English was good. The services of an interpreter were not required during this meeting. Ms Gray explained that the claimant would work in one of the respondent's eight surgeries in Northern Ireland, that she would be mentored for a period of one month after commencing work, and that the respondent would set up meetings for her with the Central Services Agency for registration, with an accountant to assist with her tax position, and with a bank. She was also advised that she should come to Northern Ireland a week or so in advance of commencing work to enable these meetings to take place.

(10) Ms Gray explained to the claimant that she would be engaged on a self-employed basis. After deduction of laboratory charges from the fees earned, 50% of the balance would go to the claimant and 50% to the respondent.

(11) The claimant was offered a loan of £1,500 to assist her during her first three months in Northern Ireland. This would have been payable at the end of the first month and repayments would have commenced in her fourth month of work. The claimant left before the loan was made.

(12) The claimant was responsible for her own professional indemnity insurance and for her own General Dental Council registration.

(13) It was Optima's practice to furnish a copy of the standard contract to a potential recruit in the claimant's position before that person met with the representative from the respondent. However, there was no evidence before me that the claimant had indeed been furnished with such a copy in advance of her meeting with Ms Gray and I have concluded that it was not in fact furnished to her at that stage.

(14) However, not a great deal turns upon this point because the claimant requested and was sent by fax a copy of the standard contractual terms before she departed from Prague to commence work in Belfast.

(15) The claimant arrived in Belfast at the end of October 2006 and started seeing patients on or about 13 November 2006. She worked until 1 December 2006 and then went home to Prague. She did not return.

(16) Shortly after her arrival in Belfast in October 2006, the claimant met Linda McVey, the respondent's financial manager. Ms McVey set up the meetings referred to above, including one meeting with the Jobs and Benefits Centre to enable the claimant to obtain a national insurance number, and she also provided Inland Revenue forms to enable the claimant to register as self-employed.

(17) On each occasion when a patient was treated by an associate dentist such as the claimant, a pink form was filled in and signed by the dentist. That form was passed to the Central Services Agency who, one month in arrears, issued payment to that dentist. It was the respondent's practice to get associate dentists such as the claimant to sign an "associate's mandate" which meant that payments would instead go direct from the Central Services Agency to the respondent. Deductions would then be made in respect of laboratory charges and the appropriate percentage of the balance would be paid over to the associate dentist. The claimant did not remain in Northern Ireland long enough for an associate's mandate to be signed but if she had remained she would have been asked to sign such a mandate.

(18) The respondent's evidence was that the surgery was opened for fixed hours but that it was up to each associate dentist to choose how many patients they treated or indeed if they treated any patients at all. Ms Gray gave evidence that she would have told the claimant on her arrival in Belfast that "normally, our dentists see about 20 patients a day". The respondent provided the premises, the equipment and the ancillary staff. I conclude that it is highly improbable that an associate dentist in the claimant's position could have chosen to come and go as she pleased, for example to work elsewhere. I therefore conclude that she was obliged to provide her services personally more or less full-time. The terms of the respondent's letter dated 8 January 2007 to the claimant would support that conclusion. That letter complained in the following terms:-

"We can't stress how your unexpected departure has affected the staff and the patients from the practice. Not only have you let us down very badly by breaking your contract with us but you have also broken your contract with the CSA (three month's notice is required). We kept the surgery open in good faith expecting you to return as we, as a company were not formally informed by yourself of your decision to leave without notice thus causing additional overhead costs to our company and loss of goodwill with our patients".

(19) The faxed copy contract sent to the claimant on 27 October 2006 has one page missing. However, it is clear from that document that the nature of the claimant's engagement as an associate dentist was as a self-employed contractor. Paragraph 18 (iii) states "He/she is self-employed and undertakes all responsibility for the payment of his/her personal income tax and national insurance contributions and hereby agrees to indemnify and keep indemnified DWL for any liability whatsoever that may suffer in respect of any breach of the warranty as to the Associate's self-employed status by reason of his/her failure to pay any income tax and/or national insurance contributions owed by him/her".

(20) At paragraph 21 of the standard contract, it states "the associate hereby agrees to play his or her full part in the Principal's rota system for emergency advice and treatment out of hours including, agreeing to be on call on a rota basis at weekends and evenings."

(21) The standard contract sets out at paragraph 39 a detailed restrictive covenant which for example would prevent an associate dentist from practising as a general dental practitioner for a period of two years in any premises situated within a radius of two miles from the premises where the associate normally carried on practice under the contract.

(22) In paragraph 31 of the contract, provision is made for the absence of an associate dentist. It states -

"In the event of the associate's failure through holiday, ill health, maternity or other cause to utilise the facilities, the associate shall make arrangements for the use of the facilities by a locum tenens acceptable to the Principal. In the event of failure by the associate to make such arrangements, the Principal shall have authority to appoint a locum tenens on behalf of the associate. The Principal shall be entitled to the continuing care and capitation payment for the associate's patients from the CSA during the period of absence and will be responsible for paying the locum tenens".

(23) The copy contract furnished to the claimant was not signed and no copy of the contract was ever signed by the claimant or the respondent.

RELEVANT LAW

(24) Only those individuals who are "workers" for the purposes of the 1996 Order can bring a claim under Part IV of that Order.

(25) Article 3(3) of the Order defines "worker" as follows;

"(3) In this Order "worker" means an individual who has entered into or works under (or, where the employment ceased, worked under) –

(a) a contract of employment, or

(b) any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of the client or customer of any profession or business undertaking carried on by the individual".

(26) There is a wealth of case law concerning the distinction between the "employed" and the "self-employed". However much of this is of little or no use in determining the application of the second limb of the definition of "worker" as used in the 1996 Order and elsewhere. In a case such as the present, where it cannot reasonably be argued that the claimant was engaged under a contract of service as an employee, the issue for a tribunal to determine is often whether or not the claimant is providing personal services under a contract for services as a business undertaking carried on by the claimant.

(27) In James -v- Redcats (Brands) Ltd [2007] IRLR 296, the EAT considered a decision of an employment tribunal in relation to a claimant who had worked as a courier delivering parcels. It was agreed that the claimant was not an "employee". The issue was whether or not the claimant fell within the second limb of the definition of "worker" for the purposes of the National Minimum Wage Act 1998 which is in similar terms to the definition in the 1996 Order. The headnote summarised the approach of the EAT in the following way:

"Not all those who might properly be described as self-employed are engaged in a business undertaking. The requirement to distinguish between employees, workers and those engaged in a business undertaking of their own demands a more sophisticated analysis than in some of the earlier cases, which loosely described all non employees as being in business on their own account. What the courts must try to determine is whether the essence of the relationship is that of a worker or somebody who is employed in a business undertaking albeit in a small way. Some assistance can be gleaned from cases which have analysed the definition of "employment" in the discrimination legislation and which have asked whether the "dominant purpose" of the contractual arrangement is the provision of personal services or whether that is an ancillary or incidental feature. The dominant purpose test is really an attempt to identify the essential nature of the contract. Is the obligation for personal service the dominant feature? Is the contract in essence to be located in the employment field, or is it in essence a contract between two independent business undertakings? The test has the effect of excluding those found to be in business on their own account".

(28) The EAT referred to an earlier decision in Byrne Brothers (Formwork) Ltd -v- Baird [2002] IRLR 96. The EAT stated at para 47;

"Byrne Brothers was a case involving the Working Time Regulations where the definition of worker is identical. Mr Recorder Underhill suggested that the purpose of that legislation must have been to recognise that there are persons who work for an employer and who are not employees but who are economically and substantively in the same position as employees. The degree of dependence is critical, he observed. He continued (paragraph 17 (5));

"Drawing that distinction in any particular case will involve all or most of the same considerations as arise in drawing the distinction between a contract of service and a contract for services – but with the boundary pushed further in the putative workers favour. It may, for example, be relevant to assess the degree of control exercised by the putative employer, the exclusivity of the engagement and its typical duration, the method of payment, what equipment the putative worker supplies, the level of risk undertaken etc. The basic effect of limb (b) is, so to speak, to lower the pass mark, so that cases which fail to reach the mark necessary to qualify for protection as employees might nevertheless do so as workers".

(29) The EAT considered the same issue in Cotswold Developments Construction Ltd –v- Williams [2006] IRLR 181 and at paragraph 53 stated:

"The paradigm case of a customer and someone working in a business undertaking of his own will perhaps be that of a customer of a shop and the shop-owner, or of the customer of a tradesman such as a domestic plumber, cabinet maker, or portrait painter who commercially markets services as such. Thus viewed, it seems plain that a focus upon whether the purported worker actively markets his services as an independent person to the world in general (a person who will thus have a client or customer) on the one hand, or whether he is recruited by the principal to work for that principal as an integral part of the principals operations, will in most cases demonstrate on which side of the line a given person falls."

DECISION

(30) While the contract was unsigned, the claimant clearly received a copy of that contract by fax before she left Prague at the end of October 2006. It is equally clear that she chose to commence work in Belfast on the basis of the standard terms contained within that contract. I have heard no evidence from the claimant and conclude on the basis of the evidence from Beverly Gray and Linda McVey, that the claimant and the respondent intended that the terms of their relationship should be exclusively determined by reference to those standard contractual terms. Therefore I do not have to go beyond the terms of that document to analyse the nature of the relationship between the claimant and the respondent – see Carmichael -v- National Power Plc [1999] ICR 1226.

(31) Those standard contractual terms make it plain that the claimant was obliged to personally carry out work for the respondent. There is limited provision in paragraph 31 of the standard contractual terms for the appointment of a locum tenens. However that paragraph makes it plain that the respondent would also have the power to appoint a locum and in any event would have been responsible for paying that locum throughout any period during which the claimant was absent through holiday, ill health, maternity or other cause. In that respect, the reality of the situation was practically indistinguishable from that of an ordinary employee.

(32) The respondent, as a limited company was clearly not in receipt of the professional services of the claimant as a dentist. That exception to the second limb of the definition of worker can therefore be discounted.

(33) The nub of this case is therefore whether or not the claimant was providing personal services as a self-employed worker to the respondent in the course of a business undertaking carried out by the individual. Construing the written terms as a whole and considering the evidence given on behalf of respondent, I have concluded that the essence of the arrangement between the respondent and claimant was that of a worker rather than that of a relationship between two separate business undertakings. The claimant did not actively market her services elsewhere within Northern Ireland. She worked exclusively for the respondent. She was recruited from Prague to do so. She provided dental services in the respondent's premises, using the respondent's equipment, materials, ancillary staff and administrative resources. She was clearly, to use the terms adopted in COTSWOLD, "recruited by the principal to work for that principal as an integral part of the principal's operation". I conclude that the obligation for personal services is the dominant feature of this contractual arrangement and that therefore the contract is in essence to be located within the employment field.

(34) I conclude that the tribunal has jurisdiction to determine the claim under Part IV of the Order and the case should proceed to listing for a hearing on the merits.

Chairman:

Date and place of hearing: 16 November 2007, Belfast.

Date decision recorded in register and issued to parties: