United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MISS E KEELAN SOLICITOR MESSRS HUGH JAMES MARTIN EVANS HOUSE RIVERSIDE COURT AVENUE DE CLICHY MERTHYR TYDFIL CF47 8LD


 


JUDGE H J BYRT QC: This is a preliminary hearing in relation to an appeal against a decision promulgated on 19^th October 1998 of an Employment Tribunal sitting in Cardiff when they held that the Applicant, Mrs Purdy, was not an employee within the meaning of Section 230 of the Employment Rights Act and so her claim for unfair dismissal by the Respondents failed. Mrs Purdy now appeals.

1. Shortly, the facts are that Mrs Purdy joined the Respondent company in about 1974 as a distributor. The Respondents are a company that sell and market goods through a network of what they would say were agents. In 1997 Mrs Purdy had been promoted to become an Area Co-ordinator. The Respondents' contention is that none of these people who work for the Company are in fact employees. They say that there are only 3 employees; one is the General Manager, and then there are 3 central sales executives. The structure seems to be that there are about 30 divisional organisers, 150 regional advisers, all of whom are treated by their Terms of Contract, as self-employed people and beneath them are the co-ordinators and distributors, and Mrs Purdy was one of the co-ordinators.
2. Her contract is dated 20^th November 1995 and it described her occupation as self-employed. Her duties as described in the contract were to appoint and motivate distributors within a designated area and in addition she had to process the orders received from the distributors. The contract itself says that the co-ordinators would be personally liable for the price of all goods ordered. Clause 6.1 says that the co-ordinators accept del credere liability for all products, that is, that they guarantee and underwrite the credit-worthiness of the people with whom they transact business. Clause 14 says that they are self-employed independent contractors responsible for their own income tax, for their own National Insurance contributions, for insuring, if it is appropriate, that they are registered for VAT purposes and indeed, that they are liable for all taxes and such like matters for which a person can be statutorily liable. It was evidence accepted by the Tribunal that Mrs Purdy had herself employed her own accountant in order to deal with such like matters. Another point in the contract is that there is no restriction on the co-ordinators' right to take up other employment or other businesses unless it be one which was in direct competition with the Respondents' own business. There was no entitlement in the contract for holidays or sick pay and there is a right to delegate performance of duties to other people of their own choosing.
3. Mrs Purdy's case, which has been argued cogently in front of us today by Miss Keelan, was that there was such a strict degree of control right down from the central management of the Respondent Company, down through the network of co-ordinators to people like Mrs Purdy that in effect, there is this relationship of Employer/Employee existing between the Company and people like Mrs Purdy. They are controlled and regulated over the area in which they can operate. They are expected to attend training. They are subject to dictats from the regional adviser, and indeed, this is perhaps one of the colonel points of Miss Keelan's argument. They are obliged, according to Mrs Purdy, to enter into an assurance arrangement known as "the Waiver Agreement" in order to cover their liabilities should there be a default anywhere in the line below them. At the end of the day, however, the Employment Tribunal came to a very clear finding, having weighted up and balanced all the relevant factors making up the factual matrix of this case that the co-ordinator, somebody in Mrs Purdy's position, was that of del credere agent. They cite a passage from Chitty on Contracts in order to indicate the law they are applying in using that phraseology. Of course, in making that finding, they are reiterating something which is expressly stated in the contract between the Respondents and Mrs Purdy.
4. Miss Keelan's argument before us today has focused on the fact that the Tribunal could not really come to a conclusion as to whether Mrs Purdy was genuinely a del credere agent without having made a finding as to whether the waiver agreement was compulsory or optional. If it was compulsory, her contention is that in effect, no such liability remains. The risk is taken away from Mrs Purdy in exchange for that. Of course, there would have to be some deduction from the commission which otherwise she would be entitled to, as consideration for the waiver agreement. We have not had a copy of this waiver agreement and in consequence, we do not know its provisions in detail, but quite plainly, this must have been a matter which was argued before the Tribunal below and it must have been a factor they took into account when working out for themselves whether Mrs Purdy was a de credere.
5. There was the evidence given by Mr Vill, who, as I understand it, was one of the only three central sales executives. He said that this waiver agreement was optional. The question is always one for the Tribunal to decide, whether what is said in the contract coincides with practice. We believe that the Tribunal, in coming to the decision that Mrs Purdy was a del credere agent and otherwise had all the other trappings of a self-employed person, they had taken into account such matters which were waged on behalf of Mrs Purdy.
6. If we are to allow this matter to go forward to a full hearing, there has to be a truly arguable point of law at stake. We are not in a position to disturb the findings of fact made by the Tribunal unless it is to be argued that the conclusions the Tribunal came to are so wrong that they were blatantly and obviously so. Miss Keelan does not argue that position at all and we think therefore, she is in difficulties in arguing this case. There is no suggestion that they have not applied the law which was drawn to their attention. They are an experienced Tribunal. The law is not difficult. The difficulty in a case of this sort is balancing the facts which point one way or the other as to whether there is an employer/employee relationship or whether it is one purely of agency.
7. Having regard to the points which have been argued by Miss Keelan we have come to the conclusion that no arguable error of law had been committed by the Tribunal. It may well be that Mrs Purdy and those supporting her disagree with the factual findings of the Tribunal, but as I have said, that is not for us. Were it on that one point alone we would say that there is no arguable case to go forward to a full hearing.
8. There is one other aspect however, which is urged by Mrs Purdy in her appeal and that is that the Tribunal was biased. What is meant by this is set out clearly in the skeleton argument which has been provided for us by Miss Keelan and essentially, the allegation is that the Chairman of the Tribunal was abrupt with the Appellant and was disinterested in her case. The Chairman asked no questions and the Appellant felt that he was simply going through the motions. Having already made his decision, the Chairman indicated that he would try and remember the details of the reported authorities and did not wish for copies. The copies of the Respondents' authorities were requested for perusal over lunch. Then a number of factual details were incorrect in the Chairman's reasons, adding to the Appellant's concern that the Tribunal were disinterested. We, when considering allegations of bias, have to apply the test as to whether there is a real possibility as a result of what happened during the course of the Tribunal hearing that justice was not done. We have considered with care the arguments advanced by Miss Keelan in support of these allegations, and we have also read the comments made by the Chairman, as a result of these allegations being brought to his attention, and we are satisfied that these complaints against the conduct of the case fall far short of anything which would justify us interfering with the decision.
9. In all the circumstances, therefore, we cannot see that there is an arguable point of law on either score to go forward to a full hearing and we therefore dismiss this Appeal. That is the decision of this Tribunal.