United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR P ROSE (of Counsel) GMB Legal Department 22-24 Worple Road London SW19 4DD
For the Respondents	MR J CAVANAGH (of Counsel) Messrs Harvey Ingram 20 New Walk Leicester LE1 6TX


 


JUDGE PETER CLARK: This is an appeal by Mrs Diana Cook against a decision of the Leicester Industrial Tribunal sitting over two days that she was not employed by the Respondent, British Gas (East Midlands) Ltd and that accordingly her claims for a redundancy payment and that she was unfairly dismissed be dismissed. Extended reasons for that decision are dated 24 November 1995.

She commenced working for the Respondent as a Market Research Supervisor on terms set out in a letter dated 22 October 1984. She was to receive an hourly rate for work done and a mileage allowance for use of her own transport.

For the first four years she was paid on the basis of invoices which she submitted for work done. Payment was made gross, that is, without deduction at source for tax and National Insurance contributions.

From 1 November 1988 that position changed. As a result of an Inland Revenue directive the Respondent was required to deduct tax and National Insurance contributions under the PAYE system in respect of the Appellant.

Other facts found by the Industrial Tribunal included these. The Appellant was not subject to any disciplinary procedure nor did she have the benefit of any grievance procedure. She did not receive sick pay or holiday pay and she was not entitled to a staff discount on goods, as were the permanent employees.

Market Researchers were regarded by the Respondent as self-employed independent contractors and they did not expect one of their Market Researchers to be tied to their organisation, although there was an expectation of priority being given to the Respondent. This Appellant was on the books of other Market Research Companies and this was encouraged by the Respondent.

Eventually, the arrangement terminated, when by letter dated 22 November 1994 the Respondent's Market Research Assistant, Jane Bishop, informed the Appellant she would be leaving British Gas at the end of December 1994 and that the Market Research Section would then no longer be operational and all those who had worked for British Gas during the then current financial year were to be issued with form P45s; that is what happened in due course to the Appellant.

In approaching the question of whether or not the Appellant was employed under a contract of service, the Tribunal directed themselves in accordance with authority cited to them, and in particular the case of O'Kelly and Others v Trust House Forte Plc [1983] ICR 728. The task which they set themselves was to build up an overall picture of the relationship between the parties. No single factor they said, was conclusive and that is an approach which is not criticised by Mr Rose, who appears on behalf of the Appellant today.

At paragraph 7 of their reasons, the Tribunal set out a number of factors which they considered were not necessarily inconsistent with a contract of service. Then at paragraph 9 they set out those matters which they found were inconsistent with a contract of service. They said this:

"9. However, on the facts as found by us the following additional factors are not consistent with a contract of service:-

(a) There were no provisions for notice by either party. None were necessary. The applicant did not have to do the work. If the respondent was not satisfied with the applicant's work it would not offer her any more.

(b) The applicant's services, as and when required were ancillary to, and not an essential part of, the actual running of the respondent's business. This is very clear from the fact that there were occasions, one as long as 3 months, when the applicant did not work at all for the respondent.

(c) The applicant had an absolute right to decide whether or not she would accept work although this would clearly be subject to the constraints of her own financial position."

Finally, at paragraph 12 they express their conclusion in this way:

"None of the factors mentioned are in themselves conclusive. Having built up our picture of the relationship between the parties, in particular the absence of obligation each to the other, we are unanimous in finding that there was no contract of service."

In advancing this appeal Mr Rose takes four points. We shall deal with each in turn.

First, he submits that the Industrial Tribunal fell into error by failing to make any specific findings as to the nature of Mrs Cook's duties in their written reasons, that such findings were necessary in order that the Tribunal could properly evaluate the factors relevant to the issue of her status, whether as employee or not, and that to this extent the Tribunal had failed to give full reasons as required by rule 10(3) of the Industrial Tribunals Rules of Procedure 1993.

We are told, and it is common ground, that there was no evidential dispute as to the nature of her duties before the Industrial Tribunal. Accordingly it was not necessary for the Tribunal to identify their findings as where there is a material factual dispute.

We are not persuaded that there is here any failing on the part of the Industrial Tribunal, applying the principles conveniently summarised in Meek v City of Birmingham District Council [1987] IRLR 250.

Secondly, he submits that the Industrial Tribunal was wrong to find that there was no mutuality of obligation between the parties. Nevertheless that is the Tribunal's finding of fact at paragraph 9(c), and Mr Rose does not seek to challenge that factual finding. Nor is it inconsistent, in our view, with the letter of 4 September 1984, in which the Respondent invites applications from interviewers to succeed the outgoing supervisor. An expectation that the supervisor would give precedence to the Respondent's work over that for other organisations is not, in our judgment, the same as a requirement to do so.

Further, it is common ground that the absence of mutuality of obligation to provide and to do work is a significant, although not conclusive factor, in deciding the issue raised in this case.

Thirdly, Mr Rose takes the first sentence of paragraph 9(a) of the reasons out of its context, and submits that the Tribunal erred in law by finding that the absence of a notice provision in the contract was inconsistent with a contract of service. He cited a passage from the judgment of Cooke J in Market Investigations Ltd v Minister of Social Security [1969] 2QB, 173, 187 B - E in support of this proposition.

This particular submission, in our judgment, demonstrates the dangers of taking sentences out of context in an Industrial Tribunal's written reasons. We accept Mr Cavanagh's submission that paragraphs 9(a) and (c) ought fairly to be read together. All that the Industrial Tribunal appears to be saying is that the absence of a notice provision is entirely consistent with the lack of mutual obligation which they found. There is no need for a notice provision where no obligation to provide work, or to do it if it is offered, exists. In short, we do not understand the Tribunal to be advancing the proposition of law, said to be wrong, which Mr Rose ascribes to them.

Finally, perversity. We have been reminded that in order to make good this submission the Appellant carries a heavy burden. The question for this Appeal Tribunal is nor whether it would have reached a different conclusion, sitting as an Industrial Tribunal, but whether there was material upon which this Industrial Tribunal could reach the conclusion which it did.

Mr Rose points to the factual circumstances in the Market Investigation case, where Cooke J upheld the Minister's determination that there Market Researchers were employed under contracts of service. He submits that the facts in this case are more strongly in favour of a finding that Mrs Cook was employed under a contract of service than in the Market Investigations case. He criticises this Industrial Tribunal for not distinguishing that case in the course of its reasons. He invites us to characterise their conclusion as one to which no reasonable Industrial Tribunal, properly directing itself, could come.

We decline to do so. Parliament has entrusted the fact-finding role to Industrial Tribunals. The question of whether or not a relationship is governed by a contract of employment is essentially one of fact. This Appeal Tribunal's power to interfere is limited to correcting errors of law. It is dangerous to compare the facts of one case with those in another. See Hall v Lorimer [1994] ICR 218, 226 B - F. The real question for us is whether the Tribunal was entitled, on the facts as found, to reach the conclusion which it did. In our view it was and in these circumstances we shall dismiss this appeal.