United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	Miss Elisabeth Laing (of Counsel) Messrs Battens Solicitors 23 Market Street Crewkerne Somerset TA18 7JU
For the Respondents	Mr Bullock (of Counsel) Messrs Harold G Walker & Co. Solicitors Office Chambers Landsdown House Christchurch Road Bournemouth BH1 3JT


 


JUDGE PETER CLARK: This is an appeal by the Applicant before the Southampton Employment Tribunal sitting on 19 September 1997, Mr Tayler, against that Tribunal's decision, promulgated with extended reasons on 29 September, that on a preliminary issue the Applicant was not an employee of the Respondent for the purpose of his bringing a complaint of unfair dismissal, failure to provide itemised pay statements and breach of contract.

The Tribunal's extended reasons can fairly be described as economical. That is not necessarily a fault. However the thrust of the appeal presented by Miss Laing on behalf of the Applicant is that the reasons are so inadequate that it is not possible for the Applicant to know why he lost, or for this Appeal Tribunal to determine whether or not there is any error of law in the Tribunal's approach. She relies on the well known judgment of Lord Justice Bingham in Meek v City of Birmingham District Council [1987] IRLR 250 for the proposition which she advances.

For the Respondent, Mr Bullock submits, correctly we think, that it is enough for the Employment Tribunal, in giving its extended reasons, to do no more than identify its essential findings of fact and the application of the relevant law to those facts. As to the latter, it is not necessary, he submits, for the Employment Tribunal to spell out expressly the legal tests which it has applied, it is sufficient that the reader of the decision may infer what tests have been applied to the facts as found by the Tribunal below.

That summarises the positions, both we think legitimate, adopted by the parties to this appeal. The question for us is on which side of the line do this Tribunal's reasons fall.

Because the Tribunal's reasoning is set out shortly it is useful to refer to the relevant paragraphs, 2 - 4 in extenso:

"2. The applicant started working for the respondent on 28 April 1997 as a ground work operative. At the time the respondent employed approximately 30 workers. They were all engaged upon a variety of tasks connected with the work of pipe laying. At the time the applicant commenced work with the respondent the respondent had no employees. All the workers were self employed. The applicant commenced working alongside the other workers. Like them, he completed invoices showing the number of hours worked, where the work was undertaken and with the total amount claimed.

3. About half the work force held tax exemption certificates and they were paid gross. In accordance with their legal obligations, the respondents deducted 24% from the earnings of those workers like the applicant without a tax exemption certificate. None of the workers had tax or national insurance deduced under the PAYE scheme. Like the other workers, the applicant did not receive a fixed weekly amount for working a fixed number of hours. The amount he received varied with the number of hours he worked each day. He provided his own hand tools. None of the workers were entitled to be paid while on holiday or off sick.

4. There is no single path to determining whether or not the contracts from which a person derives his earnings are contracts of service or contracts for services. The circumstances must be looked at objectively. It is the duty of an Industrial Tribunal to see whether the label of self-employed is a true description or a false description by looking beneath it to the reality of the facts and to decide on all the evidence whether the true legal relationship accords with the label or is contradicted by it. The evidence is inconsistent with the applicant's claim that he was an employee. The Industrial Tribunal has no jurisdiction to entertain the complaints of unfair dismissal, breach of contract or failure to provide itemised payslips."

In attacking the adequacy of those reasons Miss Laing makes the following points:

(1) the Employment Tribunal has made no attempt to set out the relevant terms of the contract made between the parties. In particular, no express consideration is given to the question of mutuality of obligations; was the Respondent obliged to provide work for the Applicant; was he required to do the work offered? Secondly, was he expressly or impliedly, obliged to devote his full time to the respondent's work, or was he free to work elsewhere? Thirdly, although the Tribunal found that he was not entitled to be paid whilst on holiday, that she submits disregards the factual issue between the parties as to whether or not he was contractually entitled to holiday pay, notwithstanding that in fact it was not paid for a bank holiday during his short employment which ended with dismissal on 20 May 1997.

(2) although certain factors are recorded at paragraphs 2 and 3 of the reasons, it is unclear whether the Tribunal found that each of the factors set out pointed to a contract of service or a contract for services or indeed was neutral on the question.

(3) as to the legal tests applied, although the Tribunal state in paragraph 4 that there is no single path to determining the issue before them, it is unclear whether the Tribunal has considered, for example, the traditional control or organisation tests, or indeed the questions as to whether the Applicant was in business on his own account. If those tests were considered, what view did the Tribunal take as to, for example, whether the Applicant worked under instruction, what was the degree of control exercised over his work by the Respondent's supervisory and managerial staff? The Tribunal found, without explaining its reasoning, that all the other workers were self-employed. Was that finding based simply on the assertion by the Respondent as to their status. If so, has the Tribunal fallen into the very trap which it identified in paragraph 4 of the reasons of accepting the label placed on the relationship by the Respondent?

Mr Bullock accepts that this a far from ideal decision. He goes as far as to concede that it is thin on reasoning but not, he submits, threadbare.

He relies upon a passage in the judgment of Mr Justice Mummery in Hall (Inspector of Taxes) v Lorimer [1992] ICR 739, 744 G- H, where he said:

"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 ."

that submits Mr Bullock is the approach and it is a permissible approach which the Employment Tribunal took in this case.

However, it seems to us that that citation should be placed in context. It followed a passage in the judgment in which Mr Justice Mummery referred to the test laid down and since often approved by higher courts, formulated by Mr Justice Cooke in Market Investigations Ltd v. Ministry of Social Security (1969) 2 QB 173, namely, was the person in business on his own account?

Mr Bullock submits that it is implicit in the Tribunal's reasons that they have applied that test to the facts as found in this case. We cannot accept that submission. Indeed it is wholly unclear to us what legal tests have been applied to the facts as found.

On the contrary, we are left with the uneasy feeling that the Employment Tribunal, hearing this case without professional representation on either side, started from the untested assumption that all other workers engaged by the Respondent were self-employed; that the Applicant was in no different position to those other workers, therefore he was self-employed. If that was their reasoning, it seems to us it was patently flawed. However, we do not decide this appeal on that basis; rather that we cannot say, from the reasons provided by the Tribunal how they reached their conclusion in this case.

If follows, in short, that we accept the submissions made by Miss Laing on behalf of the Applicant in this appeal in preference to those advanced by Mr Bullock, effectively though he put them. In these circumstances, we must allow this appeal and we shall remit this preliminary question as to the Applicant's employment status to a fresh full employment tribunal for rehearing.