United Kingdom Employment Appeal Tribunal

BAILII case number: [1994] UKEAT 890_93_1711

Appeal No. EAT/890/93

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 17 November 1994

Before

HIS HONOUR JUDGE J BULL QC

MR E HAMMOND OBE

MR T C THOMAS CBE

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STEPHENSON SHUTTERING CONTRACTORS LTD          APPELLANTS

MR N McCAFFREY          RESPONDENT

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellants MR R W ASTON

(SOLICITOR)

Aston's

57 Love Lane

Pinner

Middlesex HA5 3EY

For the Respondent MR B RYE

(Regional Organiser)

UCATT

54 Henstead Road

Southampton

Hants SO1 2DD


 


JUDGE BULL QC: This is an appeal by the employers, Stephenson Shuttering Contractors Ltd, against the decision of the Industrial Tribunal sitting at London (North) under the Chairmanship of Mr J N Leonard on 13 July 1993 whereby it upheld a complaint by Mr McCaffrey that he was entitled to a redundancy payment which they calculated in the sum of £3,075. The full reasons for their decision were promulgated on 10 August 1993.

The Appellant Company are specialist sub-contractors in the construction industry providing in the main shuttering and concrete for main contractors usually at the earlier stages of building construction. They of course employ carpenters, steel fixers and concretors in addition to their usual staff and it is plain that before the current recession their employees exceeded 500 in number. The Applicant before the Industrial Tribunal, Mr McCaffrey, started work for them as a carpenter in August 1978 and worked continuously until 19 October 1992 when his services were terminated.

We have been helpfully referred by Mr Aston to the case of O'Kelly v Trust House Forte plc [1983] IRLR 369 and to the test adumbrated by Lord Donaldson of Lymington MR at page 382 paragraph 76:

"The Employment Appeal Tribunal is a court with a statutory jurisdiction. So far as is material, that jurisdiction is limited to hearing appeals on questions of law arising from any decision of, or arising in any proceedings before, an Industrial Tribunal (s.136(1) of the Employment Protection (Consolidation) Act 1978). If it is to vary or reverse a decision of an Industrial Tribunal it has to be satisfied that the Tribunal has erred on a question of law.

Whilst it may be convenient for some purposes to refer to questions of "pure" law as contrasted with "mixed" questions of fact and law, the fact is that the Employment Appeal Tribunal has no jurisdiction to consider any question of mixed fact and law until it has purified or distilled the mixture and extracted a question of pure law.

The purification methods are well known. In the last analysis all courts have to direct themselves as to the law and then apply those directions in finding the facts (in relation to admissibility and relevance) and to the facts as so found. When reviewing such a decision, the only problem is to divine the direction on law which the lower court gave to itself. Sometimes it will have been expressed in its reasons, but more often it has to be inferred. This is the point of temptation for the appellate court. It may well have a shrewd suspicion, or gut reaction, that it would have reached a different decision, but it must never forget that this may be because it thinks that it would have found or weighed the facts differently. Unpalatable though it may be on occasion, it must loyally accept the conclusions of fact with which it is presented and, accepting those conclusions, it must be satisfied that there must have been a misdirection on a question of law before it can intervene. Unless the direction on law has been expressed it can only be so satisfied if, in its opinion, no reasonable Tribunal, properly directing itself on the relevant question of law, could have reached the conclusion under appeal. This is a heavy burden on an appellant. I would have thought that all this was trite law, but if it is not it is set out with the greatest possible clarity in Edwards v Bairstow (1956) AC14."

The Master of the Rolls then went on to deal with the test which is appropriate in the circumstances of this present appeal:

"The test to be applied in identifying whether a contract is one of employment or for services is a pure question of law and so is its application to the facts. But it is for the tribunal of fact not only to find those facts but to assess them qualitatively and within limits, which are indefinable in the abstract, those findings and that assessment will dictate the correct legal answer. In the familiar phrase "it is all a question of fact and degree".

It is only if the weight given to a particular factor shows a self-misdirection in law that an appellate court with a limited jurisdiction can interfere. It is difficult to demonstrate such a misdirection and to the extent that it is not done, the issue is one of fact."

The Industrial Tribunal in its carefully structured reasons set out its approach to this matter in paragraph 6 of the reasons and it is conceded that they identified the correct test. They considered the judgment of the Privy Council in Lee v (1) Chung and (2) Shun Shing Construction and Engineering Co Ltd [1990] IRLR 236 and the speech of Lord Griffiths in which he said, having dealt with the well known dictum of Cooke J in Marketing Investigations Ltd v Minister of Social Security [1969] 2QB 173, these words:

"The fundamental test to be applied is this: "Is the person who has engaged himself to perform these services performing them as a person in business on his own account?"

If the answer to that question is "yes", then the contract is a contract for services. If the answer is "no", then the answer is a contract of service. No exhaustive list has been compiled and perhaps no exhaustive list can be compiled of the considerations which are relevant in determining that question, nor can strict rules be laid down as to the relative weight which the various considerations should carry in particular cases. The most that can be said is that control will no doubt always have to be considered, although it can no longer be regarded as the sole determining factor; and that factors which may be of importance are such matters as whether the man performing the services provides his own equipment, whether he hires his own helpers, what degree of financial risk he takes, what degree of responsibility for investment and management he has and whether and how far he has an opportunity of profiting from his sound management in the performance of his task".

In paragraph 7 of their reasons the Tribunal continue with these words having cited that passage:

"In adopting the guidance which is there given, we have no doubt at all, looking at the circumstances as a whole, that Mr McCaffrey was not to be regarded as in business on his own account."

They then in the remainder of that paragraph set out the reasons which support that view and they also note factors which give a contrary indication. Thereafter in paragraph 8 they consider the factors which tended towards showing that this was a contract for services.

Mr Aston submits that there is misdirection in law in paragraph 8 of their reasons. He submits that in coming to their decision they ignored these vital considerations:

"(a) The engagement was terminable without notice of either side

(b) The Respondent had the right to decide whether or not to accept work.

(c) The Appellant had no obligation to provide work

(d) It was the recognised custom and practice of the industry that casual workers were engaged under a contract for services

(e) Unlike the Appellant's direct employees, the Respondent was under no obligation to get permission from the Appellant before fixing his holidays

(f) Unlike direct employees, the Respondent's pay could fluctuate.

We acknowledge that these matters do not form any part of the factors which are set out specifically in paragraph 8, and we further accept that some of the matters which Mr Aston enumerates are borne out by the notes of evidence in that there were matters of evidence directed to those matters so that findings could have been made. We are equally bound to point out that the notes of evidence do not in our view substantiate every point in that catalogue as being underpinned by evidence. But what in our judgment is important is to note what the Tribunal recorded by way of the notes of evidence. It is submitted to us by Mr Aston that there were matters which do not appear in the notes of evidence and in view of his comments, because Mr Aston appeared as the Advocate in the Court below, and has no doubt a very clear recollection of what occurred, we must stress that we take the evidence from the notes of evidence provided by the Chairman of the Tribunal and in so doing we have carefully considered the arguments which Mr Aston put forward. However, in our judgment it is vital to note the exact words of the opening sentence of paragraph 8 where the Chairman recites:

"We consider that there were factors which tended towards showing a contract for services and these included the following..."

(The emphasis in that quotation is mine).

Mr Aston's submission to us is that they failed to weigh all the relevant factors including the critical factor of mutuality of obligation. Thus, he submits, they fell into the trap of considering that good and exclusive service manifested mutuality of obligation. He points to the comment of Sir John Donaldson that this could result in every independent contractor who is content or able only to work for one client would be held to work under a contract of employment, and we take that argument on board.

However, in our judgment when the list of factors are weighed we have to pay regard to the notes of the argument which Mr Aston addressed, (no doubt with the same ability which he displayed before us) before the Industrial Tribunal, and in the careful notes of the Chairman of his arguments there is this note:

"`Casuals' dependent upon mutuality of obligation eg to provide work. And without it no contract of employment. Either to provide or to perform it if provided."

It therefore seems, and Mr Aston is frank enough to concede this, that the points which he was pressing upon us and no doubt equally pressed upon the Tribunal, were considered. We have to consider the matters in the round. We note that the Chairman used carefully the words "included" and we do remind ourselves of the words of Lord Denning which have stood for many years where he described in Hollister v National Farmers' Union [1979] ICR 542 at page 553:

"It is not right to go through the reasoning of these tribunals with a toothcomb to see if some error can be found here or there - to see if one can find some little cryptic sentence."

Whilst we wholly acquit Mr Aston of trying to go through these reasons with a fine toothcomb, nonetheless, in our unanimous view, the exact wording of paragraph 8 demonstrates that the Industrial Tribunal took into account factors beyond the four which they there enumerate.

Mr Aston secondly raises the issue of perversity. He has taken us with great care and thoroughness through the notes of evidence and submits to us that this in fact is not a decision which any Industrial Tribunal properly directing itself could have reached. We of course have to bear in mind the guidance given to an Appellate Court again by Lord Donaldson MR in the now well known case of Piggott Bros Ltd v Jackson [1991] IRLR 309; the passage I cite is to be found at page 312:

"It does not matter whether, with whatever degree of certainty, the appellate court considers that it would have reached a different conclusion. What matters is whether the decision under appeal was a permissible option. To answer that question in the negative in the context of employment law, the EAT will almost always have to be able to identify a finding of fact which was unsupported by any evidence or a clear self-misdirection in law by the Industrial Tribunal. If it cannot do this, it should re-examine with the greatest care its preliminary conclusion that the decision under appeal was not a permissible option and has to be characterised as `perverse'."

With great respect to Mr Aston who has conducted this appeal with great courtesy and much skill, we are driven to the conclusion that this Industrial Tribunal has not been demonstrated to have committed any misdirection in law. We cannot say that in any of the respects which are put forward, or indeed any other respect which occurs to us, that this Industrial Tribunal acted in a way and reached a conclusion that no reasonable Tribunal could have done. It follows therefore that this appeal falls to be dismissed and we so dismiss it.