United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR DAVID NYE (Representative) 16 Broomhall Place Sheffield S10 2DG
For the Respondents	MR DANIEL BARNETT (of Counsel) Weightmans Solicitors 41 Spring Gardens Manchester M2 2BG


 


HIS HONOUR JUDGE J MCMULLEN QC

1. This claim is about the nature of a person who is entitled to make a claim under the Race Relations Act 1976. It is an appeal by the Applicant in proceedings before a Tribunal at Sheffield, Mr A J Glossup - Chairman, held on 5 July 2001, sent to the parties on 14 July 2001. At the hearing, as before us, the Applicant had the advantage to be represented by Mr Nye, then of the Sheffield Race Equality Council. The Respondent was represented by Mr S Gorton, of Counsel; today his place has been filled by Mr Barnett.
2. The Applicant claimed that he had been unfairly dismissed and had been discriminated against on racial grounds by the Respondents. The Tribunal set up a hearing on a preliminary issue as to whether the Applicant was entitled to bring a claim before the Employment Tribunal. The Applicant contended that he was so entitled. This was denied by the Respondent. The Tribunal found that on the preliminary issue the Applicant was neither an employee under the Employment Rights Act nor was a person entitled to bring a claim under the Race Relations Act a provision slightly wider than that affecting claims under the Employment Rights Act.
3. The Applicant appeals against that decision by way of a Notice of Appeal adumbrated in a Skeleton Argument which Mr Nye has presented to us and with further oral submissions. We have also had the advantage of a Skeleton Argument from Mr Barnett. We are grateful to both of them for the succinct way in which the point has been spun in front of us.
4. The Applicant worked as a resident DJ at the first Respondent's club in Sheffield called the Republic Night Club. There was no written document embodying terms of employment and no contractual terms relating to what might be described as his engagement. Evidence was called on the essential issue to determine whether or not the Applicant fell within the category of persons entitled to bring claims. The Employment Tribunal found, having addressed Section 130(2) of the Employment Rights Act, that the Applicant was not employed under a contract of employment, which is defined as a:

"… contract of service or apprenticeship whether express or implied and if it is express wither oral or in writing."

As the Tribunal recorded, it had no difficulty whatsoever with regard to that definition and the Applicant was, as it put it:

"…manifestly not employed under a contract of service."

What it regarded as the far more difficult point was whether, under Section 78 of the Race Relations Act, the Applicant was engaged in employment, which is defined as

"employment under a contract of service or apprenticeship or a contract personally to execute any work or labour."

Again, the Tribunal quickly despatched the two categories of working person by saying that the Applicant was, for this purpose, neither under a contract of service nor under a contract of apprenticeship. But the issue for it was whether he was 'engaged on a contract personally to execute any work or labour'. The Tribunal found this point difficult, but having looked at the evidence and heard the submissions resolved the issue against him.

5. The findings which the Tribunal made were that the Applicant had been engaged to provide the service of a DJ on Mondays. The Tribunal regarded it as a crucial finding that he had never missed a single Monday. He was paid a daily fixed fee of £80 plus a further figure if a certain number of persons attended the nightclub. As the Tribunal found, he had all the appearances of a self employed person. He submitted invoices for each day, he employed an accountant, he made normal expense claims in connection with being self employed, he provided his own headphones and his own CDs, but the remainder of the hardware was provided by the Respondents. He was asked by the Respondents to play a certain type of music, but within that type, he had complete flexibility as to what he played. The Tribunal found as follows:

"He also appeared, at least subsequent to May 2000 when he became a full-time DJ when he gave up his regular work at other venues mainly outside Sheffield, for example, in Leeds, on a Saturday night. He would also play, as he described, one off gigs for special parties, etc. He was clearly a well-established and popular DJ."

6. At the heart of the Tribunal's decision was the ability of the Applicant to send someone else to do the work. The Tribunal made this finding:

"If, at any time, he had informed Mr Midgley [the relevant manager] that he could not appear on a Monday but that he had found a suitable substitute, then that substitute would have been readily accepted by the First respondent."

The evidence before the Tribunal was that other DJs, who appeared under similar arrangements on other nights in the week, frequently availed themselves of this power to substitute. It went on to find that the Applicant was engaged in providing services of a certain type of music at his discretion on a Monday night at the Republic and he could, if he so wished, send someone else of equal competence.

7. The Tribunal, having found those facts and addressed itself to what it regarded as a wide and flexible third limb in the definition in Section 78 (above) decided that the Applicant was not within the scope of it. As it put it:

"… not without considerable sympathy to the applicant, the Tribunal accepts, … that he could have sent a suitable substitute on any day, as indeed his fellow DJ's did."

In those circumstances his claim was dismissed.

8. The Applicant submits to us today that the Tribunal erred in law in that it failed to apply the guidance in Mirror Group Newspapers Ltd v Gunning [1986] IRLR 27, and to apply the reasoning in Tanna v Post Office [1981] ICR 374. The Tribunal concentrated on one aspect, but when a full consideration was given to the questionnaire administered on the Applicant's behalf, further elucidation is given to the relationship between the Applicant and the Respondent. Mr Nye drew our attention to certain answers, including the following:

"It is not disputed that you were one of the resident DJs on Monday evening … It is correct that you were told to play more accessible music. …Mr Neil Midgeley [manager] advised you that he was going to lay you off for a few weeks to see whether or not a change of DJ assisted with the success of the night."

and when the Respondent denied dismissal the reason given was:

"… the decision was taken because of your involvement in the promotion of a rival event at the National Centre for Popular Music."

9. On behalf of the Respondent, the submissions made by Mr Barnett included a contention that the Court of Appeal had wrongly applied the essential holding in Tanna when it considered its judgment in Mirror Group. It was further contended that that error was compounded by the two main speeches given respectively for the majority and the minority in the House of Lords in Loughran and Kelly v Northern Ireland Housing Executive [1998] IRLR 593, delivered respectively by Lord Slynn and Lord Clyde. We drew Mr Barnett's attention to a recent report in Byrne Brothers (Formwork) Ltd v Baird [2002] ICR 667 (to which we will return in a moment). Mr Barnett submitted that the application of that last authority to the present facts indicated that there was a blanket licence given to the Applicant so that he did not fall within the definition of a person who was precluded from substituting another to do his work.
10. We have decided that Mr Nye's submissions are correct. In Tanna the Employment Appeal Tribunal, presided over by Slynn J, considered the issue of delegation and said this:

"[Counsel] concedes, for the purposes of this appeal only, that the applicant may delegate all of the work which has to be done and yet still be in "employment" for the purpose of the Act of 1976. In his submission, the sole question is may the person who makes the contract do the work, not must he necessarily do it? We find it impossible to accede to that submission. It seems to us that this is a provision in which the word "personally" has been quite deliberately inserted. "Employment," for the purposes of this statute, does not arise merely where there is a stipulation that work or labour shall be done. It is a contract personally to execute any work or labour. That, it seems to us, quite plainly requires that the person entering into a contract shall himself be under an obligation personally to do work or labour. It may well be that some of what he undertakes to do he may delegate; but in our judgment it is essential, for there to be "employment" that the person making the contract shall himself undertake to do, at any rate, some of the work or labour."

That judgement was construed by Lord Justice Oliver in Mirror Group when he said as follows:

"… in Tanna v Post Office [1981] ICR 374, where Sir Gordon Slynn, on analogous provisions of the Race Relations Act 1976, held that some obligation to do work personally was essential, even though other work could be delegated. As Mr Irvine points out, however, although he held that some obligation of personal execution was essential, he did not say, nor was it argued – that any obligation, however minimal, was sufficient. … In my judgment what is contemplated by the legislature in this extended definition is a contract the dominant purpose of which is the execution of personal work or labour, and I would allow the appeal on this ground, for quite clearly here the dominant purpose was simply the regular and efficient distribution of newspapers."

That theme, and its express language, was taken up by Lord Slynn (as he had now become) in Loughran, where, at paragraph 21 of his speech, he said this:

"… having considered all these matters I have no doubt that the Court of Appeal were right in respect of Mr Loughran. The definition of employment is clearly wide enough to cover the provision of services by a professional man, as was held in Mirror Group Newspapers v Gunning, supra. Whatever he called himself, he was the individual seeking employment in the sense of someone offering to enter into a 'contract personally to execute any work or labour'. He was the person undertaking to do the work and he would be liable for any breach of the contract that was made. On the form he was said to be 'mainly responsible for carrying out the panel work'. So far as 'responsible' means legally responsible he was solely responsible. In so far as it means 'would mainly in fact carry out the work' he was such person even if he was entitled to delegate some part of it to his assistant. Plainly, it does not cease to be a contract 'personally to execute any work' because his secretary types and post the Executive's defence to any claim or that his assistant solicitor goes along to file such a defence. The dominant purpose is that he will do the essential part of the work."

Dissenting, Lord Clyde, at paragraph 70 of his speech said this:

"This critical part of the definition then relates to a contract with someone under which that person is to do at least some of the work himself. It may not be intended that he should do every bit of the work personally. But it is a contract which seeks to secure his particular individual participation as the principal and major contribution to its performance. This point has been expressed in terms of a dominant purpose. In Mirror Group Newspapers Ltd v Gunning [1986] IRLR 27, it was recognised that the kind of contract which was contemplated under the Sex Discrimination Act 1975 was not only one where the sole purpose was that the party contracting to provide services under the contract would personally perform the work or labour in question but one where that was at least the dominant purpose."

11. Mr Barnett, in his engaging argument, invites us to decide that both speeches we have cited, and the judgment of Lord Justice Oliver in Mirror Group, were based upon an incorrect reading of Tanna. There is some force in the approach that Tanna is based upon a concession without full argument being addressed to it by Mr Irvine (as he then was) and Mr Beloff. Nevertheless, we hold that those expressions, where Mirror Group is cited in the two authorities we have given, represent a binding approach to the law on this particular section, which is the same in discrimination statutes relating to sex, race and political/ religious opinion under the Northern Ireland legislation. Given the opportunity in 1998 to reconsider the treatment in 1986 of his 1981 view, Lord Slynn showed no inclination to do so. We reject Mr Barnett's submission.
12. Turning finally to the submission made in relation to Byrne Brothers, the Employment Appeal Tribunal, Mr Nicholas Underhill QC presiding with Members, held in respect of certain workers who were skilled as follows:

"It is of course true that the effect of the provisions of clause 13 is that in certain circumstances the services may be provided by someone other than the sub-contractor himself. But the clause falls far short of giving the sub-contractor a blanket licence to supply the contractual services through a substitute."

A number of points were made which included the fact that the right in that contract under review was of a limited scope. At paragraph 15, Mr Underhill went on:

"The power which the Applicants had under the contract to appoint a substitute is qualified and exceptional."

In those circumstances that power did not detract from their ability to bring a claim.

13. We hold that the position that the Applicant in this case was in is one in which he could from time to time send a substitute. It is conceded by Mr Barnett that if it were the Applicant himself undertaking to do the work, then he would be covered by Section 78. In our view, he is equally covered, notwithstanding his ability which we find to be limited, to make a substitution, particularly as the very reason for his termination was his decision to work for the competition on an important night.
14. The judgment of the Tribunal, which it acknowledged was difficult for it to make, is an incorrect application of the law. We hold that the dominant purpose of the arrangement between the Applicant and the Respondent was the supply by him of a music service. The appeal is therefore allowed.