United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MISS HELEN MOUNTFIELD (of Counsel) Messrs David Levene Solicitors Ashley House 235-239 High Road Wood Green London N22 4HF
For the Respondents Amicus Curriae	THE RESPONDENTS NEITHER PRESENT NOR REPRESENTED MISS M CARSS-FRISK (of Counsel) The Treasury Solicitor Queen Anne's Chambers 28 Broadway London SW1H 9JS


 


JUDGE HAROLD WILSON: The appellant in this case brought a complaint against her employer, Lifesign Limited, under the Disability Discrimination Act 1995. The unanimous decision of the Employment Tribunal was that the tribunal did not have jurisdiction to hear the applicant's claim because the respondent company fell within the exemption for small businesses granted by section 7(1) of the 1995 Act. The appellant appealed against this decision to the Employment Appeal Tribunal and has been represented by Miss Helen Mountfield of Counsel. The Employment Appeal Tribunal has also been assisted by Miss M Carss-Frisk of Counsel as amicus curiae.

1. The business of the respondent company was to provide devices known as Electro-cardiograph event recorders to patients through their general practitioners in order to take readings of heart activity at the time of any trauma. After such an event, the patient telephoned the respondent company's centre to describe the symptoms and to send a signal down the telephone line. The respondent company's cardiac technicians – of whom the appellant was one – interpreted the data, prepared a report and faxed it to the general practitioner or hospital. There was no dispute that during the period of the appellant's employment, the number of employees in the conventional sense was less than 20. At that time by virtue of section 7(2) of the 1995 Act employers with less than 20 employees were exempt from the provisions of the Act.
2. The respondent company conducted its business through introductions from general practitioners. It entered into an agreement with a company called Milton Headcount Limited, which runs an employment agency business, for that company to:

"Provide to Lifesign a sales force of 60 representatives complete with management, ('the Magna team') capable of conducting the service throughout the United Kingdom of Great Britain and Northern Ireland."

The agreement went on to specify that the facility of the promotion of Lifesign products was at third detail position and under paragraph 2 of the agreement it was recorded "that all personnel appointed to provide the Service shall at all times be and remain the employees of Headcount". Headcount was responsible for everything to do with the employees except that Lifesign had the responsibility for product training and retained a right of veto with regard to any particular person recruited by Headcount.

3. The appellant submitted to the Employment Tribunal that it should take account of the number of individuals operating under the Headcount agreement and include them as "employees" of the respondent company when considering whether or not it was entitled to claim the small business exemption. Lifesign, on the other hand, submitted to the Employment Tribunal that it was not right to widen the definition of "employee" under section 68(1) of the 1995 Act to include the Headcount people. Lifesign further submitted that those individuals were not "contract workers" and were not caught under either section 7(1), section 12 or section 68(1) of the Act or paragraph 7.7 of the Code of Practice.
4. The Employment Tribunal concluded that at all material times Lifesign had less than 20 employees and was exempt under section 7 of the Act.
5. Section 12(3) of the 1995 Act provides that:

"The provisions of this Part (other than subsections (1) to (3) of section 4) apply to any principal, in relation to contract work, as if he were, or would be, the employer of the contract worker and as if any contract worker supplied to do work for him were an employee of his."

Section 12(6) provides that:

"In this section-

"principal" means a person ("A") who makes work available for doing by individuals who are employed by another person who supplies them under a contract made with A;

"contract work" means work so made available; and

"contract worker" means any individual who is supplied to the principal under such a contract."

By section 68 of the Act "employment" is defined to mean:

"subject to any prescribed provision, employment under a contract of service or of apprenticeship or a contract personally to do any work, and related expressions are to be construed accordingly…"

6. Miss Mountfield and Miss Carss-Frisk each submitted to the Employment Appeal Tribunal most helpful skeleton arguments which they amplified in their submissions to us. Miss Mountfield relied on the judgment of the Court of Appeal in the case of Harrods Limited v Remick [1998] ICR 156 and she relied also on the judgment of another division of this tribunal in the case of CJ O'Shea Construction Limited v Bassi [1998] ICR 1030. She submitted that the Employment Tribunal had misdirected itself by taking account of factors to find that the Headcount staff were not workers within section 12(6) as if those factors were absolute barriers and not as elements in a balancing exercise. Additionally, she said that the Employment Tribunal had failed to make findings about the detail of the employment of the Headcount people and pointed out that the Code of Practice embraced part-time as well as full-time employment. She submitted that the Employment Tribunal should have detailed in its judgment any balancing exercise which it had carried out in order to reach its conclusion and should have stated any findings of fact which it had made concerning the detail of the employment of the Headcount people.
7. Miss Carss-Frisk submitted that on the proper construction of section 12(6) of the 1995 Act, it was open to the Employment Tribunal to find that the relevant sales staff were not contract workers who should be counted as the respondent's employees for the purpose of section 7(1) of the Act. She observed that there is no authority directly on the point under the 1995 Act and drew attention to the similar but not identical provisions in the Race Relations Act 1976 and the Sex Discrimination Act 1975. She agreed that the important cases were those of Remick and Bassi and submitted that the tribunal should look at the reality of the relationship in order to reach a proper conclusion. She submitted that the term "contract worker" should be interpreted in a common sense way as analogous to employee. She submitted that the Employment Tribunal had performed the necessary balancing act.
8. In our view, it is not clear, from the extended reasons, how the Employment Tribunal evaluated the evidence about the status of the Headcount workforce. This seems to us to be crucial to the question they had to answer.
9. In our judgment, this case should be remitted to the same Employment Tribunal for further consideration of the question whether, as a matter of fact and degree the particular work which was available for doing by the individuals concerned was "work for individuals employed by another person" or whether what Lifesign provided were kits to be offered for sale on the directions of Headcount. The Employment Tribunal should decide as a matter of fact what was supplied to Lifesign by Headcount: was it a workforce or was it services? Similarly, there should be a decision about who supplied the work. Having made these decisions, it will be for the Employment Tribunal to complete the balancing exercise in coming to its conclusion in this case.