United Kingdom Employment Appeal Tribunal

BAILII case number: [1994] UKEAT 258_94_1605

Appeal No. EAT/258/94

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 16 May 1994

THE HONOURABLE MR JUSTICE MORISON

MRS R CHAPMAN

MR G H WRIGHT MBE

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MS J PRESTON          APPELLANT

MGN LTD T/A MIRROR GROUP NEWSPAPERS PLC          RESPONDENTS

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellant MR R T GOOD

(OF COUNSEL)

Messrs J M Carcia & Co

84/85 Long Lane

Barbican

London EC1A 9ET

For the Respondents MR A CLARKE

(OF COUNSEL)

Messrs Lovell White Durrant

65 Holborn Viaduct

London EC1A 2DY


 


MR JUSTICE MORISON: Julia Preston worked on the Daily Mirror and People Newspapers from about October 1990 to the end of January 1993 when it was indicated to her that her services were no longer required. We believe that she has since started to work for the newspaper again. Following what she saw as a dismissal from employment by the company which owns and publishes the papers, namely MGN Limited, she presented an IT1 to the Industrial Tribunal and claimed compensation. The original Industrial Tribunal 1 Form referred to the fact that she was six months pregnant at the date when she ceased to work. MGN Limited filed an IT3, that is a response to that document, saying that the applicant was not an "employee" within the meaning of Section 153 sub-Section 1 of the 1978 Act.

The claim came on for hearing before an Industrial Tribunal held at London South on February 11 1994. The evening before, the Respondents had delivered a bundle of relevant material and Counsel on each side spoke to each other and agreed that the substantive hearing would have to be adjourned. Accordingly, when the matter was called both Counsel appeared and on the Applicant's application for an adjournment, which was not objected to, the Industrial Tribunal agreed to adjourn the matter and relist it for hearing on a later occasion.

Having refused the Applicant's application for costs consequential on the adjournment the Industrial Tribunal proceeded to deal with a number of interlocutory matters, namely amendments to the IT1 and consequently the IT3, it not being clear I think, whether the complaint was solely one of unfair dismissal or was also a complaint of unlawful sexual discrimination. Finally, the question of discovery. It is the order for discovery which was made against the Applicant which has led to this appeal hearing. The order which was made was as follows under the heading `Discovery':

1. The Applicant provide to the Respondent within 28 days of 11 February 1994:-

(a) all tax returns, communications between the Applicant and/or her accountants and the Revenue and notifications from the Revenue of tax payable for the tax years 1990/1991, 1991/1992 and 1992/1993.

2. The Respondent provide to the Applicant within 28 days of 11 February 1994 any correspondence between the Revenue and the Respondent concerning the Applicant's tax status."

That order was contained in the decision of the Industrial Tribunal which was entered in the Register on February 21 1994 and the reasons for it were contained in the order which was entered in the Register on March 17 1994 which is page 7 of our file and we here incorporate in full paragraphs 1 and 2 under the heading `Reasons' on that page:

"1. One of the issues that will be before the Industrial Tribunal at the full merits hearing will be whether the Applicant was employed within the meaning of section 153(1) of the Employment Protection (Consolidation) Act 1978. It is the Respondent's contention that the Applicant was self-employed and as evidence of this cites the Applicant's tax status. While the tax status of an individual is only one of the matters to be taken into account when considering whether a person is employed under section 153(1), it is a relevant consideration.

2. The Respondent sought discovery not only of the Applicant's tax returns and notifications of tax, but also all communications between the Applicant and/or her accountants and the Revenue as relevant to the position which the Applicant sought to present to the Revenue and that the tax returns and notifications would not show this. The Tribunal, while conscious of the confidentiality of such communications, considered them relevant for the fair disposal of the case and therefore ordered that these documents be produced."

By Notice of Appeal dated March 23 1994 the Applicant appeals the discovery order on the grounds that the material is neither necessary nor essential for disposing fairly of the matters in issue, nor is it information which is necessary for saving costs.

The background to this case of relevance to this appeal may be shortly stated. The Appellant said that she was employed by the Respondents. That she had a number of conversations about her status within the organisation when she says that she was fobbed off with promises of a written contract at some time in the future. She says that when she first started no one talked to her about tax or national insurance and she herself never even thought about it. She used to submit invoices from time to time, although her main expenses were apparently paid for as if she were an employee. She says that around mid 1991 she was told by the financial manager to stop submitting invoices headed "Research" and simply to invoice for named features

"..... to the value of £389.50 per week"

but that she was

".... not to invoice exactly the same amount each month but to spread invoices around, alternatively [and I think that means alternately] invoicing every three, four, five or more weeks - to make the invoices total different amounts."

She goes on to say that she is aware that her payment arrangements were unconventional but she was in no position to argue and she did not want to lose her job. At about the same time she says that she was concerned about her tax and national insurance position with the company and raised it with the same financial manager. He told her that she was responsible for both matters and in April 1992 she went to her accountant who has handled all her financial affairs since.

Her allegation that she was paid a fixed weekly amount, which was subsequently increased, but disguised by invoices, lodged in such a way as to conceal the true picture, is a serious one to make.

The Respondents are, in our view, entitled to ask the Industrial Tribunal to make a attack on the company's bona fides. From her Industrial Tribunal 1 form, from which the "facts" recited above have been taken, one of the explanations for the Company asking her to submit invoices to disguise the true position is that they wanted to participate with her in apparently deceiving the Revenue authorities by pretending that she was not salaried when they both knew in effect that she was.

This Employment Appeal Tribunal will only interfere with the discretionary interlocutory decision of an Industrial Tribunal if it is satisfied that the Industrial Tribunal has misdirected itself in law or reached a perverse conclusion. On the particular facts of this case we think that the order for discovery made was justified. By making the allegations against the company, the Appellant it seems to us cannot complain about being required to disclose what would normally be described as confidential material which bears on relevant issues. People work on newspapers under a variety of contractual arrangements including standard contracts of employment, peacework arrangements and agency arrangements for payment for work done.

Broadly the issue as to status of a person, that is employee or not, will be resolved as a question of fact by the Industrial Tribunal having regard to all the circumstances, and not simply by applying Rules or indicia plucked from a number of authorities on the subject. As the President of this Tribunal said in the context of a tax appeal when sitting as judge of the Chancery Division with which the Court of Appeal agreed in the case of Hall v Lorimer [1994] ICR 218, 226:

"In order to decide whether a person carries on business on his own account it is necessary to consider many different aspects of that person's work activity. This is not a mechanical exercise of running through items on a check list to see whether they are present in, or absent from, a given situation. The object of the exercise is to paint a picture from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It is a matter of evaluation of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details. It is a matter of evaluation of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details. Not all details are of equal weight or importance in any given situation. The details may also vary in importance from one situation to another. The process involved painting a picture in each individual case. As Mr Justice Vinelott said in Walls v. Sinett [1986] 60 T.C. 150, 164: `It is, in my judgment, quite impossible in a field where a very large number of factors have to be weighed to gain any real assistance by looking at the facts of another case and comparing them one by one to see what facts are common, what are different and what particular weight is given by another tribunal to the common facts. The facts as a whole must be looked at, and what may be compelling in one case in the light of all the facts may not be compelling in the context of another case.'".

Counsel for the Appellant in this case submitted to us first that the Industrial Tribunal had erred in law in their approach to the issue of discovery. He contended that they failed to apply the requirement that discovery should be necessary before it is ordered. It seems to us that the learned Chairman of the Industrial Tribunal in her reason, which are set out in this judgement, has made it plain that she considers that the disclosure of the documents which she ordered are relevant for the fair disposal of the case and thus must have been directing her mind correctly to the need for these documents for the fair disposal of the case, and therefore in our view had plainly been applying the correct test.

Secondly, it was submitted to us that these documents might give rise to a claim for privilege. Of course if they do, it will be open to the Appellant to take the privilege point in complying with the order of the Industrial Tribunal. Thirdly, it is said that the documents which her accountants have are not within her custody, possession or power, or at any rate fall within the category of documents being in the custody, possession or power of a third party and therefore fall within the principle to which we were referred on page 246 of the 1993 Green Book, the Council Court Practice.

It seems to us that, with great respect, this submission is misconceived. The passage to which we have referred on page 246 is in contradistinction to the passage which immediately proceeds it. What it is saying is that a person is not obliged to disclose documents which are not within his custody, possession or power simply on the ground that he could readily have obtained the document so as to put it within his custody or possession. In our view the documents within her accountants possession are within her custody, possession or power save to the extent that they are the accountants' own documents, such as his working papers. Accordingly, we think there is nothing in that point and if there is any problem about it it can be resolved by the Industrial Tribunal in due time.

Fourthly, it is said that these documents are confidential. So it is true that they are and the Industrial Tribunal was conscious of the confidentiality of such communications. But it seems to us that confidentiality alone is not sufficient to make documents not discloseable where the Tribunal otherwise thinks they are necessary for the fair disposal of the litigation.

Fifthly, it is said that the documents will contain matters which are not strictly speaking relevant to the issues in this case. We want to make it plain that our understanding of the learned Chairman's order is that it is requiring the disclosure of all those documents in so far as they are relevant to the issues in the case. Provided that the Solicitors who are instructed on her behalf act properly, and we are sure that they will, they will be entitled within the order for discovery to cover up before producing for inspection those parts of any of the documents covered by the order which contain material which is not relevant to the issues in the case.

The Industrial Tribunal rightly observed that the tax documentation is relevant only to one aspect of this case but it is in our view an important aspect which may ultimately go to the heart of the matter in so far as the Industrial Tribunal may have to decide who is to be believed. The relevance of the documents is that they will confirm or not the Appellant's allegations that she believed that she was an employee but that the truth was being concealed. With the benefit of the documents the Respondents may be able to show that some of the facts stated in her IT1 are untrue and invite the Industrial Tribunal to draw inferences from that. On the other hand the documents that she discloses and the documents disclosed by the Respondent, also in relation to tax pursuant to paragraph 2 of their order, may show exactly the opposite in which case the Tribunal will be assisted one way or the other.

Had the facts been different we would normally expect Industrial Tribunals to be slow to order disclosure of confidential documents of this nature unless justice between the parties could not be done without such a disclosure. On the special facts of this case, having regard to the allegations made, we are of the view that these documents are needed if justice is to be done to both parties and we can find no error of law in the decision of the Industrial Tribunal and therefore in our view this appeal must be dismissed.