United Kingdom Employment Appeal Tribunal

BAILII case number: [1996] UKEAT 608_94_0902

Appeal No. EAT/608/94

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 9 February 1996

Before

THE HONOURABLE MR JUSTICE TUCKER

MR J H GALBRAITH CB

MR N D WILLIS

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RSD TECHNOLOGY LTD          APPELLANTS

MR P DAWSON          RESPONDENT

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellants MR J DAVIES

(Solicitor)

Lewis Silkin

1 Butler Place

Buckingham Gate

London SW1H 0PT

For the Respondent NO APPEARANCE BY OR REPRESENTATION ON BEHALF OF THE RESPONDENT


 


MR JUSTICE TUCKER: This is an appeal by RSD Technology Ltd from a decision of the Chairman of an Industrial Tribunal sitting alone at Bedford on 16 March 1994. His decision was that the Respondent, Peter Dawson, was an employee of the Appellants and that he was, therefore, entitled to a redundancy payment of £615.00. Unfortunately, the Chairman did not, in our opinion, receive all the assistance to which he was entitled. The Respondent appeared in person. The Appellants did not appear at all, though the Chairman regarded their letter of 10 March 1993 and the enclosures with it, as written submissions.

It is a very great pity that the Appellants did not see fit to be represented before the Tribunal, so as to ensure that their case was argued. As it was, the Chairman had to decide a very difficult point of law, which has taxed industrial tribunals, this Appeal Tribunal and the Court of Appeal in many cases over the years, without having the advantage of hearing legal argument upon it. It is, therefore, somewhat surprising to us that, not having taken the trouble to appear before the Tribunal to assist it, the Appellants should now be appealing the decisions on the grounds that the Tribunal erred in law. However, the Appellants have been represented before us by Mr James Davies, of Lewis Silkin, solicitors, to whom we are greatly indebted for the careful and economic way in which he has presented his clients' case.

There is, however, a remaining misfortune in that the Respondent has not appeared before us. He did send copies of certain terms and conditions, two paragraphs of which he apparently regards of prime importance. There is no reference to this document in the Tribunal's decision and we assume that it was not before the Tribunal. There is no reason that we can see why it should not have been placed before them. It does not, in our opinion, meet the tests required for the receipt of new evidence and we are not prepared to look at it. Suffice it to say that if there is anything important in it, it should have been referred to below.

This is a very unsatisfactory situation. We have wondered at one time whether we should ask for the appointment of an amicus. However, we now examine the Chairman's decision and consider whether it is open to criticism.

The Chairman set out his findings of fact in paragraph 2 of the extended reasons. The material facts are that all the times the Appellants specified an hourly rate for the Respondent, both for ordinary, overtime and weekend work. The Respondent was required to work a normal week of 37 hours plus five hours paid for lunches. No payments were to made for holidays, sickness or other forms of absenteeism but those were to be covered at an enhanced hourly rate. There was no mention of pensions.

An important finding is at paragraph 2(d):

"At all times the applicant was left to get on with his own work and it appears took orders from those he worked for at RAF Henlow."

There was a finding that following 27 March 1993 the Respondent reverted to a PAYE basis and the Appellants wrote to him in the terms of a letter which is set out. That letter appears to be the only contractual document. They say that they understand that the Respondent wishes to be engaged on a PAYE basis and that they will be making statutory stoppages in pay in respect of income tax and national insurance. They therefore require his P.45. They set out the rates of payment and they end with this paragraph:

"May we take this opportunity of wishing you every success and satisfaction during your continued employment with us."

The Chairman sets out his conclusions in paragraph 3 of the reasons. He says that:

"I have to decide as is submitted by the applicant whether from the 27 March 1991 until the 29 October 1993 he was an employee and entitled to a redundancy payment. The applicant makes no claim for the earlier period ... Having considered the evidence in this difficult case, I find that he was an employee of the respondents during the period specified in 2(e) above for the following reasons. He was to be paid net of tax and national insurance, he had a specified rate of pay and was to be paid weekly. He was required to work for one body, namely RAF Henlow, the respondents could hire and fire and indeed they did so, he had been told that his employment was long-term. Applying the appropriate tests I find that the applicant was an employee..."

It will be seen that that conclusion was based on five or six specified reasons but one notable absentee from that list is the question of control. It was a matter which was raised in evidence, as we see from the Chairman's notes, and as to which he had made a finding at paragraph 2(d). We feel that this is an important factor which ought to have been more closely considered and in our opinion the Chairman was wrong to place any weight on the first fact mentioned by him, ie, that the Respondent was to be paid net of tax and national insurance. The Chairman possibly overlooked the fact that the Appellants were obliged by law to make those deductions, even if the Respondent was not employed by them: see sections 15 and 16(a) of the Taxes Management Act 1970 and section 134 of the Income and Corporation Taxes Act 1988. Indeed, in Pertemps Group plc v Nixon [1988] unreported (1.7.93 EAT) the Appeal Tribunal held that the mention of such matters in the contractual document points in the other direction. Moreover, in our opinion, insufficient regard was had to the fact that the Respondent was retained by an employment business of the kind which is increasing in the business field.

We have had the advantage which was denied to the Chairman of having received submissions on the law in relation to such businesses. We think that it may be possible to consider the relationship between the Respondent and the Appellants in the present case as a contract sui generis of the kind referred to by Mr Justice Cook in Construction Industry Trading Board v Labour Force Ltd [1970] 3 AER 220 at page 225 or impliedly referred to by Mr Justice Nolan, as he then was, in Wickens v Champion Employment [1984] ICR 365 at page 371. It is to be noted that of the features mentioned in the latter case there is no finding in the present case relating to pension rights nor, though this is an additional matter, liability insurance. Another case where it was held that the contract was sui generis was Ironmonger v Movefield Ltd [1988] IRLR 461.

Mr Davies very properly drew our attention to the decision of this Appeal Tribunal delivered by the President, Mr Justice Mummery, in McMeechan v Secretary of State for Employment [1995] IRLR 461 where it was held that the worker was an employee of the employment agency. We understand that leave to appeal was given but that the case has not yet been heard by the Court of Appeal. Nevertheless, it seems desirable that we should deal with the present case without awaiting the outcome of that appeal since, in our opinion, the present case is clearly distinguishable from the case of McMeechan. In that case, unlike the present, the relevant contract was wholly contained in a document and the question whether the contract was one of employment was a question of law to be determined upon the true construction of the document.

In the present case, the only document is the letter, albeit containing, as we have said, a reference to "continued employment with us". There are many important features which are not mentioned in that document and which have to be gleaned from the facts elsewhere. Moreover, the Chairman does not appear to have considered the guidance given by Mr Justice Mummery and approved by the Court of Appeal in the case of Hall (Inspector of Taxes) v Lorrimer [1994] IRLR 171 where, at paragraph 11 of the report, Mr Justice Mummery says this:

"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. 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."

This is what Mr Davies refers to as "the impressionistic approach".

We have, we hope, made it plain that we have considerable sympathy for the Chairman in the situation in which he was placed and we do wish to appear to be critical of him but, in our opinion, his decision cannot stand and we quash it. We do not have sufficient information before us to reach a decision on the matter. There are further factors to be investigated to which we have referred, including the document which the Respondent wished us to see and the cases to which we have been referred.

Accordingly, we remit the matter to an Industrial Tribunal for reconsideration. We request the Regional Chairman to appoint a Tribunal to consider the matter. We see no reason why the same Chairman as before should not sit, though it might be thought desirable for him to sit with lay Members in order to make the appropriate findings of fact.