United Kingdom Employment Appeal Tribunal

BAILII case number: [1994] UKEAT 855_93_1702

Appeal No. EAT/855/93

I N T E R N A L

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 17 February 1994

Before

THE HONOURABLE MR JUSTICE WATERHOUSE

MRS T MARSLAND

MR T C THOMAS CBE

---

MR A J HALES          APPELLANT

HEADCORN CONSTRUCTION LTD          RESPONDENTS

---

Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING

Revised


 


---

APPEARANCES

For the Appellant MR B P RYE

(Union Representative)

UCATT

54 Henstead Road

Southampton

SO1 2DD


 


MR JUSTICE WATERHOUSE: This is the preliminary hearing of an appeal against the unanimous decision of an industrial tribunal sitting at Ashford on 3 September 1993. The claims before the Tribunal by the Appellant employee were for a redundancy payment or for compensation on the ground of unfair dismissal but the decision of the Tribunal was that he was not an employee of the Respondents and that accordingly, his claim under both heads must fail.

The Appellant appeals against that decision on the ground that there was an error of law by the Industrial Tribunal and Mr Rye, who has appeared as the union representative on behalf of the Appellant before this Appeal Tribunal, has urged the Appeal Tribunal to say that the matters disclosed in the Full Reasons do show an error of approach by the members of the Tribunal below so that the case is suitable for a full hearing.

The brief facts are that the Appellant worked for the Respondents as a carpenter/joiner and general labourer. Before 3 January 1989 he had worked for a variety of persons for varying periods; with the exception of one short period he had described himself as being self-employed when working for those other persons. His employment (if that is the correct description) with the Respondents began after he had telephoned a director of Headcorn Construction Ltd, the Respondent Company, and asked for work; he was told by the director that suitable work was available for him and he subsequently worked for the Respondents from 3 January 1989 to 17 September 1992. He carried out work initially of a general building type at Barradale Farm and on building extensions to other premises. In the latter part of his employment he worked solely on a new golf course, the Weald of Kent Golf Course.

The Tribunal set out in paragraph 5 of their reasons, in a series of sub-paragraphs, the material facts relating to the period during which the Appellant was working for the Respondents. There was no written contract of employment nor any written terms or conditions. He worked mainly from 8 am to 5 pm from Monday to Friday but he did also work on Saturdays and Sundays from time to time. He was paid at an hourly rate of pay and he was free to take holidays when he wished, provided that he gave reasonable notice to the Respondents. It was an express finding by the Tribunal that the same arrangement applied to any particular days off that he wanted to take. The Appellant apparently took only one day off on the ground of sickness and he was not paid for holidays or days off.

The Appellant kept his own record of payments made to him in what was called a wages book and he received the payments by cheque. The wages book disclosed continuous payments from well before the date when the Appellant joined the Respondents, that is, from 20 February 1986, and it continued after the period during which he worked for the Respondents because it was up to date to 30 April 1993. The Appellant supplied his own hand tools, but the Respondents provided power tools when they were needed. The evidence of one of the Respondents' director's, Mr Farley, was that there was no specific requirement that the Appellant should work set hours or a set number of days per week, although the fact was that, during the period when he worked for them, he appeared regularly on most days of the week and did work mostly between 8 am and 5 pm. As for his income tax and national insurance, the Appellant made his own arrangements with the Inland Revenue and he had a 714 Certificate which is an exemption certificate.

The Appellant was not alone in these arrangements. It appears that there were three directors of the Respondent Company and Mr Farley was the one who was concerned with the running of the business. At the date when the Appellant ceased to work for the Respondents there were ten people working for the Company, including Mr Farley, and the others worked on a similar basis to the Appellant. In September 1992 the work on the golf course had been completed and there was no other work to be done. Mr Farley informed the Appellant that there was no more work and he advised the Appellant to look for work elsewhere, whereupon the Appellant ceased working for the Respondents with effect from 17 September 1992.

One other fact needs to be mentioned before turning to the argument. When the Appellant filled in his Originating Application in October 1992, that is, his application to the Industrial Tribunal, he described himself as a self-employed carpenter/joiner, general builder in relation to his work for the Respondents.

The conclusion of the Tribunal was that no contract of employment had existed between the Appellant and the Respondents and that at all material times the Appellant was self-employed. In deciding the matter the Tribunal correctly reminded themselves of the definition of employee in Section 153 of the Employment Protection (Consolidation) Act 1978 and continued at paragraph 7 and the succeeding paragraphs:

"Cases such as this one have caused considerable problems for Industrial Tribunals and for the appeal courts for very many years. Each case has to be looked at on its own particular facts and it is well recognised that other cases seldom provide useful precedents since they seldom have similar facts.

The starting point is for us to look at the contractual arrangements between the parties and it is a matter of much regret that in this case, as with so many others, there is nothing in writing to record the actual agreement. We do note, however, that in the application form and in the evidence to us, the applicant described himself as being "self-employed" and that Mr Farley regarded the applicant as being "self-employed".

In these cases, no one factor is decisive and it is for the Industrial Tribunal to look at all the facts as found and to weigh them together in order to decide in which general direction they point.

We have carried out this balancing exercise in this case on the facts as given to us. Having done so we find that the applicant was not an employee of the respondent company."

That reasoning is attacked by Mr Rye, first of all, on the basis that the Tribunal wrongly started off by considering the description that the Appellant had given himself in the Originating Application and the description given to him by Mr Farley and regarded them as decisive of the issue "employee or not". Mr Rye has pointed out that there are a number of cases in which, despite the description used by the parties to the contract, Industrial Tribunals have held that the description was a misnomer and that a contract of employment did exist. In Withers v Flackwell Heath Football Supporters' Club [1981] IRLR 307, on the other hand, the employee in question was a steward at a club and the Industrial Tribunal did hold, by a majority, that he was self-employed but on appeal to this Appeal Tribunal, the appeal was allowed and the application was to an Industrial Tribunal to be re-considered on its merits.

In the course of the judgment in that case Bristow J referred to the test formulated by Cooke J in Market Investigations Ltd v Minister of Social Security [1968] 3AER 372 and went on to say:

"Here the fact situation is unusual and, not surprisingly, quite unlike the fact situations in the authorities which were cited to us. Taking into account the considerations canvassed in those cases we found that there were pointers in each direction, and at first we found it difficult to agree upon what the right answer is. But, like the Industrial Tribunals, we have the advantage of a membership which includes those who are more closely involved in the industrial scene in which these problems are thrown up than lawyers alone can be; and the question which we in the end posed ourselves, and the answer to which first produced agreement between the three members of the court, was couched in industrial rather than legal terminology: "If you had asked Mr Withers while he was running the club bar "Are you your own boss?" could he have honestly given any other answer than "No"?" In our judgment, clearly not."

It was on that footing that the Appeal Tribunal held that the majority of the Industrial Tribunal below had been wrong in law and that the evidence showed that the steward had been in the employment of the club with the consequent right not to be unfairly dismissed. It was, however, a decision that turned very much on the particular facts of the case and it is of interest that it was a case in which the Tribunal below had been divided in their views.

It would be inappropriate to encumber this judgment with reference to a wide range of other divided cases. Mr Rye has, however, referred us also to the decision of McNeill J in Warner Holidays Ltd -v- Secretary of State for Social Services [1983] ICR 440. In that case the issue was whether a determination by the Secretary of State for Social Services in respect of three entertainers employed during the summer season at a holiday camp was a lawful decision. The Secretary of State had ruled that they were employed earners and that the Company was liable as a secondary contributor to pay national insurance contributions in respect of each of the three. McNeill J reviewed the full range of then recent authority on the question and his conclusion was that the decision made by the Secretary of State was within his powers and could not be demonstrated to be either wrong in law or perverse.

A more recent example of a decision on this question is to be found in Basil Wyatt & Sons Ltd v M McCarthy and J McCarthy (another UCATT case), in which the judgment of this Appeal Tribunal was given by Judge Peppitt QC on 27 April 1993. That was a case in which the decision of the Industrial Tribunal was that two applicants before them had been employees, despite the fact that they had been described as self-employed by themselves and by their employers habitually. The appeal by the employers was put on much the same basis that Mr Rye has sought in this case to argue the case for the Appellant, namely, that although the Tribunal had looked at a series of factors and had been referred to the leading case of Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 1 AER 433, they had got the balance wrong and had reached a decision that was plainly wrong and in law. In the course of the judgment of this Appeal Tribunal, Judge Peppitt QC reviewed the more recent authorities and went on to say:

"The question we have to ask ourselves is not whether or not the Tribunal was right in arriving at that conclusion but whether the conclusion was perverse in the sense which I have described. In our unanimous view there was evidence before the Tribunal which entitled it to come to the conclusion which it did and that the submission which Mr Stopford made, and made powerfully, that its decision was perverse, therefore fails."

Having looked at the matters set out in the Statement of Reasons in this case, we are unable to acept that the Industrial Tribunal misdirected themselves about the law that they had to apply. On the contrary, they referred specifically to the relevant definition of "employee" and it is entirely clear that the Tribunal understood that they had to look at all the facts and circumstances of the alleged employment in order to perform a balancing exercise and then to decide for themselves on which side the balance fell.

It follows that Mr Rye could only succeed in this appeal if he could demonstrate that the conclusion reached by the Tribunal below was perverse having regard to the evidence and any agreed facts that were before them. However, there is nothing in any of the authorities cited to us by Mr Rye that would justify this Appeal Tribunal in reaching the conclusion that there was perverseness on the part of the Industrial Tribunal in the present case. There were of course some pointers one way and some pointers in another direction but the Tribunal understood that they had to perform a balancing exercise.

The suggestion that the Tribunal regarded the description applied by the Appellant and by Mr Farley to him as decisive is simply not borne out by the Statement of Reasons. It was merely one factor as the Tribunal made clear. There were many other matters that also pointed to a finding that the Appellant was self-employed: there were, of course, the tax and national insurance arrangements; there were the informal arrangements about holidays and taking time off; and there was the absence of any payment except at the hourly rate for work actually done. The Tribunal were entitled to look also at the Appellant's own working history, not only with the Respondents but also with other employers for whom he had worked from time to time. Control has often been regarded as an important factor in these cases and it has been considered to be of particular importance, for example, in the musician cases but here there was no express finding of control over the Appellant by the Respondents. It appears that he remained substantially master of himself during the period when he worked for the Respondents.

To sum up, in the absence of any perverseness in the reasoning of the Tribunal below, this Appellant would not have any arguable case at a further hearing before the Appeal Tribunal with the Respondents represented. It would be wrong, therefore, to allow the appeal to proceed further and it must be dismissed.