Industrial Tribunals Northern Ireland Decisions

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URL: http://www.bailii.org/nie/cases/NIIT/2010/01547_10IT.html
Cite as: [2010] NIIT 1547_10IT, [2010] NIIT 01547_10IT

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THE INDUSTRIAL TRIBUNALS

CASE REF: 01547/10

CLAIMANT: Philip Douglas

RESPONDENT: 1. J&G Engineering Limited

2. Redundancy Payments Service

DECISION

The unanimous decision of the tribunal is that the claimant was an employee of the first named respondent and not an independent contractor.

Constitution of Tribunal:

Chairman: Mr Cross

Panel Members: Mr Black

Mr Hunter

Appearances:

The claimant was represented by his father Mr A Douglas.

The first-named respondent did not appear before the tribunal and was not represented.

The second-named respondent was represented by Mr P Curran.

Findings of Fact

1. The claimant was employed by the first named respondent from 6 July 2009. He was employed on what the first named respondent called a labour only subcontract. Some months before that the claimant had been employed as an electrician by the same respondent but in May of 2009 all the employees of that respondent were made redundant and a few weeks later were brought back on what were termed “labour only subcontracts”. The claimant’s contract was terminated when the respondent went into liquidation on 11 January 2010.

2. When the claimant applied to the liquidator for unpaid money due to him under his contract, he was refused payment, as he was considered to be a creditor and not an employee.

3. The claimant then commenced these proceedings to establish, that although he was termed an independent contractor, he was in reality an employee of the first named respondent when it became insolvent.

4. Despite being termed an independent contractor the claimant never received a written contract, or letter of terms. He was treated in the same way as he had been treated by the first named respondent before his change of status. The only difference being that PAYE was not deducted from the payments made to him.

5. The claimant did not provide any tools that he did not provide when employed. He did not price work that he would do, but did the work that the first named respondent required him to do on a daily basis. He could not take time off without the permission of the first named respondent, he could not make an arrangement for someone else to carry out any part of his work. He did not work for any other employer and had to abide by the employer’s holiday arrangements.

The Law

6. The Employment Rights (Northern Ireland) Order 1996 sets out the definition of an employee as follows:-

Article 3 (1) In this Order “employee” means an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment.

(2) In this Order “contract of employment” means a contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing.

(3) In this Order “worker” means an individual who has entered into or works under (or, where the employment has 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 a client or customer of any profession or business undertaking carried on by the individual; and any reference to a worker's contract shall be construed accordingly.

(4) In this Order “employer”, in relation to an employee or a worker, means the person by whom the employee or worker is (or, where the employment has ceased, was) employed.

(5) In this Order “employment”—

(a) in relation to an employee, means (except for the purposes of Article 206) employment under a contract of employment, and

(b) in relation to a worker, means employment under his contract; and “employed” shall be construed accordingly.

7. There have been many cases which have considered the difference between an employee and an independent contractor. One of the leading cases which laid down guidelines as to how to tell the two different legal entities apart, was Ready Mixed Concrete (South East) Limited v Minister of Pensions and National Insurance [1968] 2 QB 497. In that case Mr Justice McKenna suggested three tests to apply to assist in telling an employee from a contractor:-

1. In consideration for a wage the employee agrees to provide his own work and skill in performing some service for the employer.

2. In performing that service the employee will be subject to the other’s control in a sufficient degree to make that other the master.

3. The other conditions of the contract are consistent with it being a contract of service.

Decision of the tribunal

8. The tribunal holds that the claimant was an employee of the first named respondent. He received a wage to do the work himself for the company and was told what to do and when to do it. His employer was able to control when he worked what holidays he took and whose direction he followed in his day to day work.

9. The contract was a verbal contract but that makes no difference to the fact that the claimant was in the view of this tribunal an employee of the first named respondent when that company went into liquidation and his contract came to an end.

Chairman:

Date and place of hearing: 7 September 2010, Belfast.

Date decision recorded in register and issued to parties:

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