United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	IN PERSON
For the Respondents	MR J SWIFT (of Counsel) Messrs Edge & Ellison Solicitors Rutland House 148 Edmund Street Birmingham B3 2JR


 


JUDGE D LEVY QC: In an application to an Industrial Tribunal received on 21 July 1995, Mr Ratcliffe-Smith claimed that he was employed by the organisations he named from 1 January to 30 June 1995. Those organisations claimed he was not in continuous employment for a period of more than two years. A preliminary issue therefor arose as to whether the Industrial Tribunal had jurisdiction. That was heard by the Chairman of an Industrial Tribunal sitting at Nottingham on 5 December 1995. His decision, adverse to Mr Ratcliffe-Smith, was communicated to the parties on 11 December 1995.

From that appeal Mr Ratcliffe-Smith appealed by Notice of Appeal (erroneously dated 17 January 1995), received by the Employment Appeal Tribunal and submitted by Solicitors on 8 February 1996. On July 15, the appeal was listed for hearing before a panel different to those sitting here today. That day Mr Ratcliffe-Smith failed to attend. An adjournment was granted provided Mr Ratcliffe-Smith provided sufficient medical evidence of illness within 14 days. This is the adjourned hearing of the appeal.

Shortly after the adjourned hearing commenced Mr Ratcliffe-Smith applied for an adjournment. He applied for it when it was pointed out to him that what he was appealing against were findings of fact.

We have in our bundles certain documents. They include an unsigned witness statement on which Mr Ratcliffe-Smith relied, the Respondent's case as set out in its IT3 and the Decision of the Industrial Tribunal sent to the parties following the preliminary hearing. In so far as oral evidence was given at that hearing, we do not have notes of the evidence. No application has been made in respect of such notes. We have pointed out to Mr Ratcliffe-Smith, as is the fact, that appeals to this Tribunal can only succeed if this Tribunal can find that the decision of an Industrial Tribunal contains an error of law and it is, of course, a point of law if gross factual errors are made in the findings by a Chairman.

Mr Ratcliffe-Smith applied for an adjournment on two grounds. First of all, there is a decision of this Court in Mobbs v Nuclear Electric Plc [Unreported] EAT 1182/95, which is now en route to the Court of Appeal. In that case an Employment Appeal Tribunal held that the jurisdiction of Chairmen sitting alone was limited. Although that judgment is on the way to the Court of Appeal, there has since been another judgment of the Employment Appeal Tribunal, namely Mr C Tsangacos v Amalgamated Chemicals Ltd & Active Chemicals Ltd heard on 31 October. In that case Morison J and colleagues considered the case of Mobbs and came to the decision that it was quite proper, on the construction of the rules, for Chairmen to hear matters themselves, which are so permitted by the Rules.

For the Respondents, Mr Swift has submitted that when a court of equivalent jurisdiction considers and refuses to follow a ruling of law of a Court holding the same jurisdiction, unless the earlier Court's decision is upheld by the Court of Appeal the proper approach for us is to follow the later decision, particularly if the later decision appears to be correct. With respect to both panels, we find the later judgment persuasive in its reasoning and we accede to Mr Swift's submission.

It seems to us it would be wrong to delay this appeal simply because there is another case on the way to the Court of Appeal on the role of a single Chairman.

On that ground therefore we will not allow an adjournment.

The second ground on which Mr Ratcliffe-Smith seeks an adjournment is that he has not sought Chairman's notes and he wishes to have the Chairman's notes in order the better to pursue his appeal. In that connection he says he is "in person" today and that he has been "in person" since the preliminary hearing before the Industrial Tribunal on 5 December 1995. The first of his statements is right; the second cannot be right. We have been shown a letter about this appeal sent to the Solicitors, dated 8 February 1996 whom he formerly instructed dated 8 February 1996, sent out by the Employment Appeal Tribunal, when the Notice of Appeal was received. In part it reads as follows:

"In accordance with Rule 4 of the Employment Appeal Tribunals Rules 1980 I enclose by way of service a sealed copy of the above Notice of Appeal. The appeal has been served on the Respondent who has been asked to lodge an answer by 22 February 1996. Upon receipt a copy will be sent to you.

The Registrar has, subject to later representations by the parties, directed that the Chairman's notes of evidence are not required."

The appropriate Practice Direction and Rules of Procedure at that time was that found in the Practice Direction reported in 1981 ICR page 287 and paragraph 13 of the Rules therein read inter alia as follows:

"(a) The appeal tribunal will prepare copies of all documents for use of the judges and members at the hearing in addition to those which the registrar is required to serve on the parties under the Rules. It is the responsibility of parties or their advisers to ensure that all documents submitted for consideration at the hearing are capable of being reproduced legibly by photographic process;

(b) In Scotland the copy of the Chairman's Notes will not be supplied to the parties except on application to the Appeal Tribunal on cause shown. In England and Wales copies will only be sent to the parties if in the view of the Appeal Tribunal all or part of such notes are necessary for the purpose of the appeal or on application to the tribunal on cause shown. Chairman's Notes are supplied for the use of the Appeal Tribunal and not for the parties to embark on a 'fishing' expedition to establish further grounds of appeal.

(c) It is the duty of parties and their solicitors to ensure that only those documents which are relevant to the point of law raised in the appeal, and which are likely to be referred to, are included in the documents before the tribunal."

This letter would not have been sent to Solicitors of Mr Ratcliffe-Smith were he acting in person.

No application had been made until the morning of the hearing for the Chairman's notes. This, as we understand it, is really an appeal based on facts. Mr Swift opposes the adjournment on the grounds that it is made at a very late stage. The onus is on the Appellant to show why the notes are necessary and why no application for them has previously been made. No satisfactory explanation has been provided.

Further, with the documents before us we think that it is quite possible to conduct this appeal; we are able to see clearly from these documents what the issues were below.

We do not think the notes of evidence will be of great benefit to us. On considering the paragraphs of the Practice Direction we think it more than possible that Mr Ratcliffe-Smith wishes to embark on "a fishing expedition". In the circumstances, we think it would be wrong for the Respondents to suffer a further delay, it being remembered that this appeal has already once been delayed because of the unfortunate illness of the Appellant. We therefore dismiss the application for an adjournment.

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We return to the facts underlying the Originating Application. Mr John Ratcliffe-Smith is 46. He claims in his IT1, presented to the Industrial Tribunal that he was employed by the Respondents from 1 January 1992 to 30 June 1995. The issue for determination as to whether he was employed throughout that period was resolved against Mr Ratcliffe-Smith because the Industrial Tribunal found that for many months until some time in 1994, he was in fact "employed" by the Respondents as a consultant i.e. he was not an employer throughout the period.

From that decision Mr Ratcliffe-Smith appealed. It is right to say that at the hearing before the Industrial Tribunal both parties had the benefit of professional representation and the issue was fully argued.

The Notice of Appeal of Mr Ratcliffe-Smith has five grounds in it. Before us today Mr Ratcliffe Smith told us that he had abandoned the first four grounds of the appeal but relied on the fifth ground. In fairness to him Mr Swift, who appears for the Respondents, thought it proper and, indeed, we think he was quite right to address us on the four grounds which were abandoned.

Put quite shortly the grounds summarised were, first of all the Tribunal failed to apply the proper test when determining whether or not Mr Ratcliffe-Smith was an employee of either of the Respondents by reason of its reference to the nature of the agreement between the parties.

Secondly, the Tribunal should not have regarded the nature of the agreement between the parties as a conclusive factor in the present case.

Thirdly, that the Tribunal should not have regarded the intention of the parties as the overriding factor which determined the issue of whether or not the Appellant was an employee in the present case.

Fourthly, that the Tribunal should not have concluded that the change of the intention of the parties determined whether or not the Appellant was an employee in the present case when there was no other change of circumstances.

As to each of those grounds of appeal, Mr Swift has drawn our attention to the passages in Hall v Lorimer [1994] ICR 218 at p.226, where Nolan LJ cited a passage from the judgment of Mummery J (as he then was) reported in 1992 ICR 739 at pages 745, in which Mummery J. in turn referred to part of a decision of Vinelott J. in Walls v Sinnett [1986] 60 TC 150, at 164, to draw the conclusion that it was clear, when considering the question of whether or not a particular applicant is an employee, there is no single matter which is likely to be determinative in every case. Rather, in each case all the circumstances must be considered so as to reach a conclusion based on the overall result of those circumstances.

We accept that as a correct statement of law and that on this basis, there is no single and universally applicable conclusive factor; it is likely that on the facts of any particular case there will be one matter or one combination of circumstances which is conclusive to the case.

It is clear to us from the decision of the Industrial Tribunal, that the Chairman looked carefully at all the circumstances of Mr Ratcliffe-Smith's working relationship with the Respondents and considered them. He had the benefit of representation from the parties and detailed evidence from which to make findings of fact.

Against this background, the Tribunal was entitled to regard the fact, as it did, that the Appellant had been working under a consultancy agreement until February 1994, as a matter which pointed to the conclusion that Mr Ratcliffe-Smith had not been an employee of either of the Respondents for so long as that arrangement existed.

Similarly, once the Tribunal had had regard to all the other circumstances, the Tribunal was entitled to reach the conclusion that the existence of a consultancy agreement was the deciding factor in the present case. It was not the only fact which the Tribunal considered, rather it was the one which, when all matters were considered, tipped the balance against the Appellant.

In these circumstances, we think that Mr Ratcliffe-Smith was perfectly correct to abandon the first four grounds of his appeal and we thank Mr Swift for his help with those points.

On the fifth point, that is the point of perversity, Mr Swift has reminded us of the position, both on contracts of service generally and of the position of an Employment Appeal Tribunal, when they have to consider a decision of the court below.

He reminds us of our position by reference to the decision O'Kelly v Trusthouse Forte Plc [1983] ICR 728. For present purposes it is sufficient if I read out the first holding from the decision. (Mr Swift has very properly taken us through all the relevant passages in the judgments so that we can see that the passage which is thus summarised is correctly summarised).

"Held, allowing the appeal and dismissing the cross-appeal that the question whether the applicants were "employees" under a "contract of employment" ... was a question of law for the purposes of the Act, but that the answer involved questions of degree and fact which it was for the industrial tribunal to determine and the appeal tribunal was not entitled to interfere with the industrial tribunal's decision unless the Industrial Tribunal had misdirected itself in law or its decision was one which no tribunal, properly directing itself on the relevant facts, could have reached.

Sir John Donaldson, MR said:

"An appellate court must loyally accept the conclusions of fact with which it was 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. The appeal tribunal has no jurisdiction to consider any question of mixed fact and law until it has extracted a question of pure law."

In our judgment, there were ample facts here which entitled the Tribunal to come to the decision which it did.

First, there was evidence that, prior to 1991 the Appellant had been an employee of another subsidiary of the first of the Respondents, albeit for two non-continuous periods.

Secondly, there was evidence that the consultancy agreement referred to in the Reasons was entered into with a specific purpose in mind, namely the disposal of the Respondent companies.

Thirdly, there was evidence that the prospect of such disposal was alive until the end of 1993.

Fourthly, the Tribunal accepted the evidence of the Respondents that Mr Ratcliffe-Smith had been made a Director of the second Respondent in order to boost his authority in connection with the sale of the companies.

Fifthly, during the existence of the consultancy period, the relationship between the parties was consistent with the absence of any employment relationship - in support of that finding we were shown documents which were in the bundle before the Industrial Tribunal which showed that Mr Ratcliffe-Smith was registered VAT from June 1993 and very many payments were made to him for his services to the Respondents after he had submitted VAT invoices.

Sixthly, it was only after plans to sell the companies had been abandoned that the issue of Mr Ratcliffe-Smith's status was reconsidered and finally, as a result of this reconsideration, Mr Ratcliffe-Smith entered into a contract of employment in February 1994 which continued until he was dismissed on 30 June 1995.

In these circumstances, there was no reason why the Tribunal, as a matter of necessity, had to regard the arrangements either prior or post-1994 as a sham; it was in our judgment therefore, entitled to balance relevant circumstances during the pre-1994 period against each other and to reach the conclusions which it did.

We acknowledge that Mr Ratcliffe-Smith has asked us to adjourn this matter because he felt that without a Chairman's notes of evidence he was disadvantaged. We are satisfied that, even if the Chairman's notes had been produced on the matters on which Mr Ratcliffe-Smith has addressed us, the position would not have altered.

There is simply no point of law which emerges from the findings of fact which get anywhere near to persuading us that the decision of the experienced Tribunal was perverse. In these circumstances, we dismiss this appeal.