United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	NO APPEARANCE OR REPRESENTATION BY OR ON BEHALF OF THE APPELLANTS


 


MR JUSTICE MORISON (PRESIDENT): This is a Preliminary Hearing to determine whether there is an arguable point of law raised by a Notice of Appeal presented by Mr Hemsley and Mr Butters against a decision of an Industrial Tribunal held at Southampton on 6 December 1996. The decision of the Industrial Tribunal was entered in the Register and sent to the parties on 14 January 1997. By that decision the Industrial Tribunal unanimously dismissed the Applicants' complaints brought against the Secretary of State for State & Industry, that she was liable to make a payment to them, pursuant to Section 166 of the Employment Rights Act 1996.

The question at issue was whether the Applicants were employed by the company of which they were the proprietors. Having reviewed the evidence with great care at paragraph 4 of the decision, at paragraph 5 the Industrial Tribunal said this:

"The Tribunal has considered all the relevant factors and balanced those which tend to indicate that the applicants were employees of the company against those which indicate that they were not."

In paragraph 8 they concluded that:

"...The applicants were in joint control of the company; the company did not control them.

9. Looking at the reality of the situation ..... the Tribunal is in no doubt that the applicants were, in effect, joint proprietors of a business, being run with a view to capital appreciation which would enure to their benefit as shareholders, but which was in fact incorporated as a limited company.

10. Accordingly, and bearing in mind that neither applicant could produce any documentary evidence of a contract of employment or of their being formally recognised as employees by the company, the Tribunal finds that the applicants have failed to satisfy it that they were employees of the company for the purposes of Section 230(1) of the 1996 Act."

The Notice of Appeal that was put in in this case suggests that the decision of the Tribunal was perverse; that the Tribunal gave no consideration to the existence of an implied contract; that the Tribunal came to its decision on the basis of the shareholding alone and that the Tribunal should have taken into account that they paid Class 1 National Insurance contributions and Schedule E PAYE Income Tax as employees.

It seems to us that none of those points is arguable. This was a carefully reasoned decision of an Industrial Tribunal who have obviously carefully considered the various factors which go into the melting pot, before a decision can be arrived at as to whether a person is an employee or not. The allegation of perversity is simply unsustainable.

In relation to the suggestion that they failed to consider an implied contract, it seems to us that that is an unjustified criticism of the Industrial Tribunal's decision. They were looking to see whether they were employees, despite the fact that there was not a contract of employment expressly in existence. Therefore they were applying their mind to the possibility that there might be an implied contract of employment in existence. Accordingly that allegation is unfounded.

The suggestion that they only came to their decision on the basis of the shareholding, seems to us simply to run counter to the facts set out in paragraph 4, and to the careful consideration which they gave in the weighing of those facts, and is unsustainable. As to the point that they paid National Insurance Contributions and PAYE Income Tax as an employee, that fact was specifically referred to by the Industrial Tribunal and was carefully weighed by them as one of the indications that they were employees. But they had to look at the matter in the round and it seems to us that they carried out their duty in a professional and judicial manner, and there is no merit whatever in the grounds of appeal which have been lodged before us.

We should say that neither of the Appellants has appeared. They are not required to appear in a case such as this and we have carefully considered any point that could be made on their behalf in arriving at our decision. But our decision is that the Industrial Tribunal's decision cannot be criticised in the way that they have sought to do in their Notice of Appeal. Accordingly there being no arguable point of law raised by their Notice of Appeal the appeal should be dismissed.