Industrial Tribunals Northern Ireland Decisions

 
THE INDUSTRIAL TRIBUNALS

CASE REF: 1575/04

CLAIMANT: James Mervyn Dickson

RESPONDENTS: 1. Department for Regional Development,

Water Service

2. Williams Industrial Services

DECISION

The unanimous decision of the Tribunal is that the Department for Regional Development, Water Service, is the correct respondent and was the employer of the claimant.

Constitution of Tribunal:

Chairman (sitting alone): Ms P Sheils

Appearances:

The claimant appeared and represented himself.

The first-named respondent was represented by Mr Aidan Sands, Barrister-at-Law, instructed by the Departmental Solicitor's Office.

The second-named respondent was represented by Mr J Toner, Director of Williams Industrial Services.

Background

1. The claimant in a claim form lodged with the Office of Industrial Tribunals and the Fair Employment Tribunal on 6 May 2004 alleged unfair dismissal. In that claim form he cited a Mr Peter Thompson of the Water Service and the Water Service as his employers.
2. A response was lodged by The Departmental Solicitors on behalf of the Department for Regional Development and the Water Service. A response was also lodged by Williams Industrial Services Ltd. In their response The Departmental Solicitors Office indicated that neither Mr Peter Thompson as agent for the Department for Regional Development nor the Department for Regional Development and its Agency the Water Service were the claimant's employer and denied that they were the appropriate respondent in the case. In their response Williams Industrial Services indicated that they had no control or supervision of the claimant and that all of these responsibilities were with the Water Service.
3. A hearing was convened to hear the preliminary issue to determine "who was the correct respondent". That hearing took place on 2 November and 15 December 2005. A decision was recorded in the Register and issued to the parties on 16 February 2007. By letter dated 29 March 2007 The Departmental Solicitors required the Tribunal to state a case for the opinion of the Court of Appeal.
4. The Tribunal agreed the stated case for the opinion of the Court of Appeal and did so on 26 July 2007.
5. The Tribunal stated a case on the following questions:-

Question 1 – was the Tribunal's decision as to Mr Dickson's employment status wrong in law on the basis that on all the evidence before it, both oral and documentary, no reasonable Tribunal could have concluded that he was an employee of the Department?

Question 2 – did the Tribunal err in law in deciding that the Department was Mr Dickson's employer in holding that the requisite mutuality of obligation lay between the Department and Mr Dickson in that the Tribunal's conclusion on this was not supported by the facts?

Question 3 – did the Tribunal err in law in deciding that the Department was Mr Dickson's employer in holding that the Department exercised a significant amount of control over Mr Dickson's employment by taking into account the fact of that employment or his continuous employment as well as the way he carried out his employment on a day-to-day basis?

Question 4 – did the Tribunal err in law in deciding that the Department was Mr Dickson's employer in holding that the Department exercised a significant measure of control over Mr Dickson's employment by taking into account the fact of that employment or his continuous employment as well as the way he carried out his employment on a day-to-day basis in that so to decide was an unreasonable interpretation of the facts found?

Question 5 – did the Tribunal err in law in deciding that the Department was Mr Dickson's employer in holding that the Department exercised a significant measure of control over Mr Dickson's employment by improperly taking into account the fact that the Department controlled the existence of that employment or his continuous employment, as such is not a fact from which any inference may be drawn of an employment relationship between Mr Dickson and the Department?

6. On its referral to the Court of Appeal a Court Order issued was dated 19 March 2008 which stated "the Court, without adjudicating on the appeal, on consent:-

(1) allows the appeal and remits the matter to the Industrial Tribunal;

(2) declined to answer the questions posed by the Industrial Tribunal; and

(3) makes no order as to costs".

7. A Case Management Discussion was held on 28 April 2008. This Case Management Discussion directed that:-

(1) The case would be listed for hearing on Monday 16 June 2008 at 10.00 am.

(2) Before the same Chairman, Ms Sheils, who conducted the previous hearing alone.

(3) To enable the parties to make submissions on the test laid down by the Court of Appeal in James v London Borough of Greenwich 2008 IRLR 302 on the facts already found by Ms Sheils as set out in her decision issued on 16 February 2007; before the Chairman reaches a decision.

8. At that Case Management Discussion, Counsel for the second-named respondent, the Department of Regional Development, Water Service, submitted the skeleton arguments which had been prepared by the first and second-named respondents for the Court of Appeal. These skeleton arguments were attached to the record of the Case Management Discussion proceedings and were forwarded to this Tribunal immediately after that Case Management Discussion.
9. The Case Management Discussion also set a timetable whereby prepared written submissions were to be submitted by the parties. These written submissions were duly forward to the Office of Industrial Tribunals and the Fair Employment Tribunals on the agreed dates namely 12 May and 27 May 2008.
10. It was agreed that the claimant would be provided with a copy of the Employment Appeal Tribunal's decision in the above-mentioned James case and that Counsel for the first-named respondent would advise all parties including the Tribunal if a further appeal was made to the House of Lords in that case.
11. Prior to the hearing the solicitors for the Department confirmed that as far as they could ascertain no further appeal to the House of Lords was lodged.
12. The Tribunal considered the skeleton argument and the prepared written submissions from the parties. The Tribunal also heard additional oral submissions from each of the parties at the hearing.

The Hearing

13. At the outset of the hearing the Tribunal advised the parties that the Tribunal's role as defined by the Court of Appeal Order and the Case Management Discussion was to hear submissions from the parties on the tests laid down by the Court of Appeal in James on the facts as previously found.

The Tribunal also advised the parties that it saw its role as applying this test in the context of the original question posed to the Tribunal at the first hearing, which was "who is the correct respondent?".

The Tribunal indicated that as the parties' written submissions had addressed the issue of who is not the claimant's employer but also the broader issue of who is or might be the claimant's employer the Tribunal wished to hear from the parties on this broader point.

The Claimant's Submissions

14. Additional to his prepared written submissions, the claimant drew the Tribunal's attention to and sought to rely on the verbal agreements in the case that had been reached between himself and the Water Service that were over and above what had been agreed in the contract as between Williams Industrial Services and the Water Service. Specifically the claimant drew attention to the following:-

(a) The contract between the Water Service and Williams Industrial Services made it clear that all technicians should be available for call out duty. However the claimant drew the Tribunal's attention to the fact that it had been agreed between him and those who interviewed him on behalf of the Water Service that he would not be required to do call out duty.

(b) The claimant also drew the Tribunal's attention to the fact that in the contract between Williams Industrial Services and the Water Service technicians supplied by Williams Industrial Services would be required to operate at the incinerator. The claimant emphasised to the Tribunal the fact that at his interview with the Water Service it had been agreed between the claimant and the Water Service that the claimant would not be required to work at the incinerator.

(c) The claimant also submitted that the fact that the Water Service had a disciplinary procedure which applied to him (although never actually applied to him) was another aspect where his actual relationship with the Water Service was outside the terms of the contract between Williams Industrial Service and the Water Service.

(d) The claimant submitted that in the absence of an express contract of employment from either the Water Service or Williams Industrial Services Ltd that the Water Service was his employer on the basis that day-to-day control as exercised by the Water Service was over and above the control that had been specified in the contract between the Water Service and Williams Industrial Services.

Submissions on behalf of the first-named respondent, the Water Service

15. In his prepared written submissions, Counsel for the Water Service indicated that he was relying on the point made in the James case that it would only be in rare cases that a contract of employment should be implied between a worker and an end user in agency cases, that this was an agency case where there was a genuine contractual relationship between the Water Service and Williams Industrial Services and that that express contractual relationship and the facts of the case expressed the actual relationships between the parties, without more.
16. Counsel indicated that certain facts were of note in this regard:-

(a) That the claimant referred to Williams Industrial Services and his employer in his claim form to the Water Service did not pay wages directly to the claimant. The Water Service paid a sum of money to Williams Industrial Services each month as part of a wage claim by Williams Industrial Services which also included expenses and profit. Counsel submitted that in this way the Water Service was not paying directly for the work done by the claimant but rather for the services supplied by the agency in accordance with its specification and the other contractual documents.

(b) That the day-to-day control exercised by the respondents was not inconsistent with the expressed contractual arrangements, that this was provided for in the contract and that all aspects of the claimant's work for the Water Service were provided for in the detailed contract between Williams Industrial Services and the Water Service. Counsel also submitted that the tender document provided by the contractor (Williams Industrial Services) warranted that all staff employed by him under the contract were solely employed on the contract.

(c) Counsel for the Water Service indicated that the fact that the claimant had been interviewed initially by the Water Service was entirely consistent with the contract between the Water Service and WIS, that it was part of the tender procedure that Water Service had to be satisfied that the people sent to them by WIS were suitable.

(d) Counsel for the Water Service indicated that the way in which the claimant conducted his work and other features of his work were entirely explained by the nature of the contract between the Water Service and Williams Industrial Services. This included the fact that the claimant was not at liberty to work elsewhere. Counsel also submitted that the facts that the Water Service assigned and directed the claimant's work, monitored his timekeeping and allocated his holiday periods, provided up-to-date training, trained, equipped and provided him with protective clothing indicated a level of control entirely consistent with the expressed contractual obligations between the Water Service and Williams Industrial Services.

(e) Counsel also submitted that the level of control exercised by the Water Service in relation to timekeeping, job allocation and job timesheets, disciplining were all consistent with the expressed contractual arrangements between WIS and the Water Service.

(f) Counsel for the Water Service submitted that the Department had made a business decision to contract out services for the maintenance of instrumentation equipment, that there was no element of sham in this decision or in the contract attendant on this decision and that this arrangement was a genuine contractual arrangement. Counsel also submitted that it was not necessary to infer contract of employment between the claimant and the Water Service. In line with the decision in James v London Borough of Greenwich 2008 IRLR 202 Counsel submitted that the contractual relationships that existed in this case explained what was going on amongst the parties and there was no need to imply a contract of employment between this worker, the claimant and the end user, the Water Service.

(g) Counsel for the Water Service went on to submit that there were no findings of fact that made it necessary for the Tribunal to imply any contract of employment between the claimant and the Water Service.

17. Although Counsel for the Water Service indicated that he did not believe that it was his role to address the Tribunal on the issue of whether or not there was a contract of employment between the claimant and Williams Industrial Services he accepted that his own submission which stated "it follows that the DRD was at no time the claimant's employer and the proper respondent is WIS" properly reflected his clients' view on this.
18. Accordingly, Counsel for the Water Service indicated that he believed that there was a contract of employment between the claimant and Williams Industrial Services and that there were facts which indicated this. These were that the claimant had described Williams Industrial Services as his employer in his application form to the Industrial Tribunal, that he had been hired by WIS in order for WIS to meet their tender requirement with the Water Service, that WIS had taken the claimant on, that there were references throughout the contract between the Water Service and Williams Industrial Services that the technicians supplied under the contract were employees of Williams Industrial Services and that they were paying the claimant's wages and that these facts put beyond doubt that Williams Industrial Services were the claimant's employer.

Submissions on behalf of the second named respondents, Williams Industrial Services

19. Mr Toner for Williams Industrial Services submitted that the facts as found indicated that the claimant was under the day-to-day control of the Water Service. This included the fact of the contents of the contract itself. Mr Toner drew attention to the fact that there was nothing in the contract itself that stated that the Water Service would interview technicians supplied to it by Williams Industrial Services. Mr Sands for the Water Service disputed this.
20. Mr Toner also submitted that this case was an example of those "rare" cases as envisaged by the James case in that here there was the necessity to find a contract of employment between the claimant and the Water Service. This was on the basis that in one of the documents that comprised the contract between the Water Service and Williams Industrial Services the latter was obliged to confirm to the Water Service that if successful in securing the contract, Williams Industrial Services would honour the obligations conferred by TUPE in relation to any technicians already working for the Water Service through another agency.

The Tribunal's Conclusions

21. The Tribunal carefully considered the Court of Appeal decision in James v London Borough of Greenwich [2008] IRLR 302 and the Employment Appeal Tribunal decision in the same case [2007] IRLR 168. The Tribunal also read in full the following decisions that were taken into account by either or both of those courts, namely the Aramis [1989] 1 Lloyds Rep 213 CA, Cable & Wireless Plc v Muscat [2006] IRLR 354 CA, Carmichael v National Power Plc [2000] IRLR 43 HL, Consistent Group Ltd v Kalwak [2007] IRLR 560 EAT, Cotswold Developments Construction Ltd v Williams [2006] IRLR 181 EAT, Dacas v Brooke Street Bureau UK Ltd [2004] IRLR 358 CA.
22. In relation to the Court of Appeal decision in James the Tribunal noted Lord Justice Mummery's comments at paragraph 54 onwards, Postscript, that Tribunals are not architects of economic and social policy and as they must operate within the legal architecture created by others they cannot confer the right not to be unfairly dismissed on a worker who is without a contract of employment. The Tribunal took account of the comments at the Postscript to remind itself that its role was to apply the law to the evidence before it.
23. The Tribunal relied as much on the EAT decision on Mr Justice Elias' decision in the EAT for the guiding principles to assist it reach its conclusion, noting that it was encouraged to do so by Lord Justice Mummery in the Court of Appeal's decision at paragraph 50, "the EAT added observations (paragraphs 53 – 61) which are intended to assist tribunals in the task deciding whether a contract of employment with the end user should be implied. ETs would be well advised to follow the guidance given by the EAT, which I would expressly approve".
24. At paragraph 54 of his judgement Mr Justice Elias states that it is not particularly helpful to focus on the question of whether there is the irreducible minimum of mutual obligations to the issue of whether a contract can be implied between worker and end user in Agency cases. Mr Justice Elias indicated that the issue in these cases is whether the way in which the contract is in fact performed is consistent with the Agency arrangements or whether it is only consistent with an implied contract between the worker and the end user and would be inconsistent with there being no such contract.
25. At paragraph 55, Mr Justice Elias added that if there were no Agency relationship regulating the position of the parties then the implication of a contract between the worker and end user would be inevitable. Where work is being carried out for payment received might suggest a contract of employment exists between two parties an Agency relationship alters matters in a fundamental way there is no longer a simple wage – work bargain between worker and end user.
26. He went on to state that in most tripartite or agency cases the express contracts between the parties should explain and be consistent with the nature of the relationships and no further implied contract can be justified… "When these arrangements are genuine-not a sham- and when implemented accurately represent the actual relationship between the parties – as is likely to be the case where there is no pre existing contract between worker and end user – then we suspect that it will be a rare case where there will be evidence entitling the tribunal to imply a contract between the worker and the end user. If any such contract is to be inferred, there must subsequent to the relationship commencing be some words or conduct which entitled the tribunal to conclude that the Agency arrangements no longer dictate or adequately reflect how the work is actually being preformed and that the reality of the relationship is only consistent with the implication of the contract".
27. The Tribunal approached the question as articulated in the James case of whether it was necessary to imply a contract between the claimant and the Water Service by examining the facts as found and giving consideration to whether these were such that could entitle the Tribunal to imply a contract between the worker and the end user. The Tribunal noted that this evidence must be of words or conduct subsequent to the relationship commencing which could entitle the Tribunal to conclude that the Agency arrangements no longer adequately reflected how the work was actually being performed and that the reality of the relationship was only consistent with the implication of a contract.

28. The Tribunal concluded that in this case there were a number of facts which revealed some such words or conduct subsequent to the relationship commencing which could entitle the Tribunal to conclude that the Agency arrangements no longer dictated or accurately reflected how the claimant actually performed his work. These included the fact that there appeared to the Tribunal on examination of the contract to be no reference to or provision for a second interview by which means the Water Service could further test and select individual technicians on their skill and proficiency.

29. Instead there was a term in the contract obliging Williams Industrial Services as Contractor to submit to Water Service for approval a written list of "Contractor's staff who may work on the contract giving such particulars as the Department may require in connection with the Contract". Thereafter the Contractor could only permit those persons who were approved by (the Department) to work on the contract. Further the contract required the Contractor "to warrant and represent that all staff assigned to the performance of the contract shall possess such skill and experience as is necessary for the proper performance of the contract…" There was no reference in the Contract to a second interview or additional process whereby the Department could vet technicians.

28. The Tribunal also considered the facts found that arose out of this second interview. These facts included two specific changes to the terms and conditions of selection or appointment as set out in the Contract. The Contract required technicians to be available to do call-out rota and to work at incinerators. At his second interview the claimant was expressly exempted from being required to do either of these. This again appeared to the Tribunal to be facts which amounted to such words or conduct subsequent to the relationship commencing which could entitle the Tribunal to conclude that the Agency arrangements no longer dictated or accurately reflected how the claimant actually performed his work.
29. Mr Justice Elias indicated that the observation by Mummery J in the earlier Dacas case still held good, that in a tripartite relationship like this the end user was not paying directly for the work done by worker but rather for the services supplied by the Agency in accordance with its specification and other contractual documents. Mr Justice Elias added "The key feature is not just the fact that the end user is not paying the wages but that he cannot insist on the Agency providing the particular worker at all."
30. In this regard the Tribunal accepted Mr Toner's submission in relation to TUPE. There was a requirement in the Contract that required successful tenderers who became the Contractor to give effect to the TUPE Regulations. It seemed to the Tribunal that this requirement was at least at odds with the role of Williams Industrial Services as agent for the supply of technicians. Although it appeared to be an appropriate or aspirational requirement to ensure that any successful agent would respect employment laws and obligations it also had the effect of ensuring, or insisting, that technicians already working with the Water Service would continue to do so. In this sense it seemed to the Tribunal that the Water Service was in effect insisting on the Agency providing [at least some] particular workers.
31. In light of the test in James as applied to the evidence and the facts found the Tribunal concluded that the Water Service was the claimant's employer and that to answer the question posed to this Tribunal that the Water Service was the correct respondent.

Chairman:

Date and place of hearing: 16 June 2008, Belfast

Date decision recorded in register and issued to parties: