Industrial Tribunals Northern Ireland Decisions

THE INDUSTRIAL TRIBUNALS

 

CASE REF:   2884/11

 

 

 

CLAIMANT:                      Emil Staruch

 

 

RESPONDENTS:              1.  Mercury Recruitment Ltd (in liquidation)

                                        2.  Department for Employment and Learning

 

 

 

DECISION

(A)     Pursuant to the claimant’s deemed application under Article 205 of the Employment Rights (Northern Ireland) Order 1996 (“the Order”), I have determined that the respondent company (“Mercury”) is not liable to him in respect of any redundancy payment. 

 

(B)     The claimant’s appeal (in respect of holiday pay) pursuant to Article 233 of the Order is dismissed. 

 

Constitution of Tribunal:

Chairman (sitting alone):           Mr P Buggy 

 

         

Appearances:

The claimant was self-represented.

 

Mercury was not represented.

 

The Department for Employment and Learning (“the Department”) was represented by Mr N Cruickshanks.

 

 

REASONS

 

1.       The claimant is Slovakian.  In the course of this hearing he required an interpreter.  For several years, he has worked as a lorry driver at DHL premises, based in Ballyclare.  Throughout that period, he has worked there in his capacity as a worker who was “employed” by an agency, and  who was supplied (to DHL) by that agency.

 

2.       In September 2011, the relevant agency was Mercury.  At that time, Mercury   became insolvent.  At that time, the claimant was owed holiday pay by Mercury.  Accordingly, he launched these proceedings against Mercury.

 

3.       He also applied to the Department (in the Department’s role as the statutory guarantor in respect of certain employment debts) for payment in respect of the holiday pay which was due to him from Mercury.  The Department refused to make such a payment, because it was not satisfied that the claimant was employed by Mercury under a contract of service at all relevant times.

 

4.       Mercury has been the subject of a winding-up order by the High Court.  Accordingly, the claimant’s industrial tribunal proceedings against Mercury could not be pursued unless and until leave of the High Court was obtained.  Obtaining leave involves some procedural complications, and some delay. 

 

5.       In those circumstances, I asked the claimant if he wanted to amend his claim form, in these proceedings, so as to include an appeal against the Department’s holiday pay decision (a decision already mentioned above).  He told me that he did seek such leave.  I granted him such leave.  I also joined the Department as a party to the proceedings, but only in respect of the appeal. 

 

6.       Against the same background which has already been outlined above, I thought it appropriate to list the hearing of that appeal (against the Department’s decision),  so that it would  take place prior to any hearing in respect of the claim against Mercury. 

 

7.       During the course of this appeal hearing, Mr Cruickshanks confirmed that the Department had no objection to the appeal being deemed to incorporate an additional appeal; an appeal against a deemed decision, on the part of the Department, to refuse to make any payment to the claimant in respect of any redundancy pay which might be due to him from Mercury. 

 

8.       This is my decision in respect of both of those two appeals. 

 

9.       Because of the current state of the law, I am obliged to conclude that both of the appeals must be dismissed. 

 

10.     The reason for the dismissal of each appeal is that I am satisfied that, at all material times, the claimant was not employed by Mercury  under a contract of service. 

 

11.     The statutory guarantees (whereby the Department makes payments to employees, in respect of certain unsatisfied debts owed to them by their employers) are available only to persons who were employed by the employer/debtor under a contract of service (as distinct from being employed under a contract for services).

 

12.     Accordingly, in the context of these appeals, the main issue was whether or not the relevant contract (the contract between the claimant and Mercury) constituted a contract of service. 

 

13.     I respectfully agree with the analysis of the law which is set out in the judgment of Judge Peter Clark in Secretary of State for Trade and Industry v Alade [UKEAT/0591/06].  As is noted during the course of that judgment (at paragraph 13 of the judgment), it is clear that the irreducible minima for a contract of service include: (1) mutuality of obligation and (2) the presence of control by the employer. 

 

14.     Mr Cruickshanks drew my attention to the Alade decision, and asserted, on behalf of the Department, that mutuality of obligation was absent in this case and that, in reality, Mercury had no control of this claimant while he was working at DHL.

 

15.     I am not certain that Mr Cruickshanks is right about the alleged absence of mutuality of obligations.

 

16.     I am however, regretfully, convinced that, during his long-term assignment at DHL, Mercury did not have any control over the claimant (in the sense in which the term “control” is used in the present legal context).

 

17.     Because of that lack of control, the contract between the claimant and Mercury lacked one of the essential elements of a contract of service; the “control” element was missing.

 

18.     In this case, the position was as follows.  In general, the claimant’s day-to-day working arrangements, and his supervision, were managed by DHL, not by Mercury.  In particular, whenever the claimant decided that he wanted to take holidays, he gave good notice, and was usually allowed to take his holidays at a time of his own choosing.  But he asked DHL for permission to take leave at any particular time, while merely informing Mercury about his holiday- timing intentions.

 

19.     In this case,  as   in Alade,  control resided with the client (DHL, in this case), and not with the agent (Mercury, in this case).  It might be argued that the agency delegates control to the client, and that the irreducible minimum (control) requirement is therefore satisfied, because the client’s control emanates from the   agreement between the worker and the agency.  However, that argument was considered, and rejected, by the Court of Appeal, in Bunce v Postworth [2005] IRLR 557. (See Alade, at paragraph 21).

 

General comments

 

20.     I have arrived at this decision with great regret.  But the law is clear.  As was pointed out at paragraph 1 of the Alade judgment, cases of this type (cases involving agency workers, who seek to avail of the statutory guarantee) illustrate:

 

                  “… the seemingly random consequences of the distinction drawn, in employment protection legislation, between an individual who works under a contract of service … and one who works under a contract for services …”.

 

          I also note comments which were made by Judge Serota at paragraph 2 of his judgment in Secretary of State for Business Innovation and Skills v Studders [UKEAT/0571/10]:

 

“The factual background [of the Studders case] … concerns the vexed question of the status of agency workers and in what circumstances an agency worker might be an employee of the employment agency.  The courts on a number of occasions have expressed concern as to the need for Parliament to intervene to clarify the law in this regard, and although various statutory instruments including new regulations to come into affect later this year provide additional rights for persons on the books of employment agency, I am not aware that Parliament has in fact done anything to clarify the law as to the status of agency workers”.

 

Next Steps

 

21.     The claimant should now contact the Official Receiver and make sure that his name is recorded as a Mercury debtor (in respect of the holiday pay which he says he is owed).

 

 

 

 

 

 

 

Chairman:

 

 

Date and place of hearing:  30 March 2012, Belfast.                   

 

 

Date decision recorded in register and issued to parties: