United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR J OWEN (Representative)
For the Respondent	NO APPEARANCE BY OR ON BEHALF OF THE RESPONDENT


 


MR JUSTICE MORISON (PRESIDENT): This is an appeal against a decision of an Industrial Tribunal held at Nottingham on 16th May 1996 which concluded that the applicant, Mr Gilbert, was entitled to £1,478.04 against the respondents, Action Desk Solutions Ltd in relation to the work that he had done for the respondents. This was a claim that was brought under the Wages Act, and for that purpose, the Industrial Tribunal first had to consider whether Mr Gilbert was a worker within the meaning of s. 230 of the Employment Rights Act 1996 or its predecessor section.

S. 230 which is convenient to refer to provides in subsection (3):

"(3) In this Act "worker" ... means an individual who has entered into or works under ... -

(b) any other contract, whether express of implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual;

and any reference to a worker's contract shall be construed accordingly."

Thus, the question in this case was whether Mr Gilbert was providing services to the Action Desk Solutions Ltd on the basis that they were client or customer.

The Industrial Tribunal determined that issue in favour of Mr Gilbert and they did so in a decision which perhaps is shorter of reasons than one would have anticipated from an Industrial Tribunal. Paragraph 3 of their decision reads:

"3 The respondents sell manufacturing systems to small manufacturing companies and the applicant was used as a self-employed person to canvass prospective customers and arrange appointments for the respondents' sales staff to follow up. The applicant's employment was ended towards the end of December 1995. The applicant submitted a final invoice ... The respondents responded to that invoice making reference to the respondents' financial situation but not saying that they did not owe the money."

Paragraph 6 of the tribunal decision reads:

"6 The respondents submitted that there was no jurisdiction to hear this claim as the Wages Act does not apply. We are satisfied, and find, that the application was a "worker" and did work for the respondents for which he was entitled to be paid and this claim comes within the Wages Act."

As I say, this decision of the Industrial Tribunal is brief in the way it dealt with the real substantial point at issue between the parties, which was whether they had jurisdiction to determine the complaint which was made. They would only have jurisdiction if Mr Gilbert was a "worker" within the meaning of s. 230(3)(b).

Against that decision Action Desk Solutions Ltd appealed. They have throughout been represented by Mr Owen whose business it is. He is recorded as being the Managing Director. The company sells computer software to small manufacturing companies. For a period of about one year Mr Gilbert was a full-time worker for Action Desk Solutions Ltd. He came into work every day. He was, as Mr Owen indicated, subject to Mr Owen's control. Between May 1994 and April 1995 as Mr Owen put it, he was really effectively an employee, although in terms of the formal arrangements between the parties, Mr Gilbert was treated as a self-employed person and was paid gross. Mr Owen said whether that was proper or not he could not suggest that during that period at least Mr Gilbert was not a worker within the meaning of the legislation.

Mr Owen's belief before the Industrial Tribunal proceedings commenced was that the Industrial Tribunal would take as a preliminary issue separate and distinct from the rest of the claim as to quantum, the question as to whether he was a worker. In fact what happened at the hearing, according to Mr Owen, is that Mr Gilbert was called to the witness box straight away and gave his evidence.

There is some dispute as to whether the Industrial Tribunal gave an indication very early on that they had already decided that in their own minds Mr Gilbert was a worker. The Industrial Tribunal lay members have indicated that that was not a decision which they had reached before they had heard any of the evidence. But bearing in mind that this was a complaint forming part of the Notice of Appeal, which was made by Mr Owen, we thought that it would be appropriate in the circumstances having regard also to the paucity of the reasoning process in the Industrial Tribunal decision, if we were to spend a little time, as we did, with his co-operation, in reviewing the underlying facts in this case.

We would wish to record at once our great appreciation to Mr Owen for the way in which he gave us assistance. We all independently came to the conclusion that we were dealing with a man who was open and honest with us in a way which is a pleasure to encounter in a court room. We were greatly impressed by his manner and demeanour and general helpfulness.

On the basis of that investigation, it would appear to be his case that after the initial one year period, Mr Gilbert went off and worked for another company for a short period of time and eventually offered to come back and do the same sort of work for Action Desk Solutions Ltd as he had been doing previously. The nature of the work which he had done both before and after the one year period was the solicitation of potential customers for products of the appellant company. For that purpose, Mr Gilbert would attend the premises of the company and make telephone calls to possible leads, and where an interview was organised, he would pass details of that through to the sales staff who were employed by the appellant company. That was what he did during the year's full-time employment by Action Desk. Mr Owen frankly admitted that that was what he did during the two days a week that he came to Action Desk premises during the second period when he only worked on a part-time basis. During both periods payment would be made in response to invoices submitted by Mr Gilbert.

We were shown the invoices for the part-time period, and it would appear that it was usual, but not entirely invariable, that Mr Gilbert would work on the same two days each week on a regular basis.

Mr Owen said that the real difference between the two periods was that probably through business and necessity he was not able to exercise the control which had been doing when Mr Gilbert was a full-time employee. Whilst he was working part-time for Action Desk Solutions Ltd, he was for a period of time also working part-time for another organisation. We were told by Mr Owen that when he was working for Action Desk Solutions Ltd on those two days he would occasionally do work which related to his other potential employer and vice versa.

Against that background, we must ask ourselves whether the Industrial Tribunal have erred in law in the conclusion that they have arrived at. It seems to us that they have not. Having regard to all the circumstances, it seems to us that Mr Gilbert was a worker within the meaning of s. 230(3)(b) of the Act.

We recognise that there may be a whole variety of factual situations which could lead to an opposite conclusion, but here the significant point, as it seems to us, is that Mr Gilbert had been a full-time worker for Action Desk, and thereafter became a part-time worker. We do not think that any significant change occurred as a result either of the break in the employment or the reduction in working time from full-time to part-time. We do not consider that those two factors had any bearing on the true analysis of the legal relationship between the parties. Here, albeit possibly on a self-employed basis, Mr Gilbert was rendering services to Action Desk Solutions Ltd. It cannot be said that Action Desk Solutions Ltd could be described, in the circumstances, as a client or customer of any business being carried on by Mr Gilbert. The invoices are all in relation to Mr Gilbert's own name. As I say, there was no real change between what had been done part-time from what had been done full-time, when, on any view, at least, Mr Gilbert was a worker, if not truly an employee.

Accordingly, we are of the view that the appeal should be dismissed. We have, I hope, left Mr Owen with the view that he has had the opportunity to have his case fully and properly considered by us, so that what ever may have occurred before the Industrial Tribunal, he will understand that the end result has got to be the same. In those circumstances, we must dismiss the appeal.