United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR RICHARD HIGNETT (of Counsel) Instructed by: Messrs Solnick & Co Solicitors 9 Chiswick High Road London W4 2ND
For the Respondents	No appearance or representation by or on behalf of the Respondents

SUMMARY

Working Time Regulations

Were the Respondents workers under the Working Time Regulations?

Was the Tribunal's calculation on holiday pay wrong in law?


 


THE HONOURABLE MR JUSTICE WILKIE

1. This is an appeal by Plumbing Services Limited against a Decision of the Employment Tribunal sitting at London South in the form of a Chairman sitting on her own on
   17 September 2004. The Respondents to the appeal, James William Miller and James Anthony Miller, represented themselves before the Tribunal and have not sought to participate in this appeal.
2. The Decisions appealed against are a Decision that both Mr Miller senior and Mr Miller junior were workers within paragraph 2 of the Working Time Regulations 1998 and that they were entitled to receive, respectively, £11,700 for Mr Miller senior, and £12,350 for Mr Miller junior in respect of unpaid holiday pay, pursuant to Regulations 13, 14 and 16 of the
   Working Time Regulations 1998.
3. I have been persuaded by Mr Hignett that I should stay the part of the appeal which concerns the correctness or otherwise of the Tribunal's calculation of the award. Essentially this is because of a novel point which is about to be decided by the Court of Appeal concerning the route by which entitlements under the Working Time Regulations for unpaid holiday pay may be enforced. The Court of Appeal has, as I understand it, heard argument recently on the case of The Commissioners of Inland Revenue v Ainsworth and others. In the event that the Court of Appeal rules in a particular way, then Plumbing Services Limited would have, on the face of it, a strong time limit point which, if correct, would severely limit the period during which any entitlement to holiday pay would be enforceable. Whilst that was not a point that was ever raised before the Tribunal, it is a point of jurisdiction and in my judgment it would be unjust for me to determine this element of the appeal finally in advance of the Court of Appeal deciding in Ainsworth because to do so may conceivably exclude the Appellant from a perfectly good substantive defence, at any rate for the vast majority of the sums awarded by the Tribunal.
4. Therefore I will stay that aspect of this appeal for a period of eight weeks, pending the outcome of the Court of Appeal in Ainsworth. In the event that the Decision of that case has not been promulgated within eight weeks, then no doubt the matter can be revisited by the Employment Appeal Tribunal.
5. The part of the appeal which I have heard today concerns the assertion by the Appellant that the Tribunal, in concluding that both Respondents were workers, erred in law. There is no complaint made about the formulation of the issues by the Tribunal in paragraph 3 of its Decision. Nor is there any complaint about its citation of the decision of the Employment Appeal Tribunal in the case of Byrne Brothers (Formwork) Ltd v Baird [2002] IRLR 96, at paragraph 5 of the Decision, together with the relevant Regulation defining worker. Nor is there any complaint about the Tribunal's conclusions that the Respondents to the appeal were not employed under a contract of employment. Essentially what is said is that it erred in law in concluding that the statutory test for what is a worker under these Regulations was satisfied.
6. The first basis is that it is said the Tribunal erred in law in deciding that there was a contractual obligation to perform services personally.
7. This was a case in which there was no contractual documentation whatsoever, notwithstanding the fact that the Appellant is a middling size company whose business it is to provide plumbing services to the building industry through a mixture of its employed plumbers and others. The Tribunal, in paragraph 8.1, addressed this issue. It recorded its findings that neither of the Claimants had ever provided a substitute to perform their work nor had they ever considered doing so. Mr Miller senior submitted that he could not do so because he had the keys to the premises and knew the jobs that were to be performed. Mr Miller was engaged effectively as a supervisor. The Tribunal records Mr Garrans, the witness for the Respondents, saying that "he tried to impress upon them to do the work personally and if more staff were required they were provided for by the respondent". It also records Mr Garrans saying that "they were free to bring in other people but he expected them to be of the same standard as the Claimants. However the issue of bringing in a substitute never arose".
8. The Tribunal went on to cite Byrne Brothers and to record accurately that even in cases where there is some limited right to provide a substitute that is not determinative of the issue. The Tribunal went on to say this:

"If there had been a right to substitute this would not necessarily be fatal to a contract of service. It is also clear that the right to substitute was conditional upon the workers being of the same standard, it was therefore not an unrestricted right to substitute and therefore not fatal to the precondition of personal service."

9. The Tribunal is criticised for not making a firm finding whether there was or was not a right to substitute and is further criticised for indicating that in its view what Mr Garrans said brought it within the Byrne principle.
10. In my judgment there is no error of law in the approach which the Tribunal adopted. In the absence of contractual documentation it was perfectly entitled to look at what had in fact happened over a period of years. There was absolutely nothing in what had happened over a period of years which pointed in any way to the existence of a right to bring in a substitute. Its findings of fact, on the contrary, point the other way. But in a finding which was generous to the Appellant, it was prepared to consider what, if at all, the extent of any right might have been. It concluded that it was hedged round with such a limitation as to quality that it meant that the case fell within the Byrne principle. There was, in my judgment, no error of law in it concluding that the Claimants were expected to undertake personally the performance of the services they performed for the Respondent.
11. The second limb of the appeal criticises the conclusion of the Tribunal that the Respondents to the appeal were not carrying on a business undertaking.
12. In paragraphs 8.2 and 8.3 the Tribunal sets out its findings of fact. In my judgment there is nothing inaccurate in the facts which the Tribunal found. It had been the case that, prior to the coming of the CIS 4 and 5 Scheme, the father and son Miller had carried on business under the name of Forest Plumbing. That had ceased and they were employed individually by the Appellant, with more than a year between the commencement of their individual employments. There was no question of them being taken on as a team nor any question of their being Forest Plumbing in another guise.
13. The documentation provided by Mr Miller junior to obtain payment had none of the indicia of an organised business: the invoices did not have dates; they were not numbered sequentially; they were simply pieces of paper with his name at the top, on which was scrawled either the work that he had done, for which he was to receive payment or, where there was no agreed rate for that particular job, the number of days for which he was claiming payment. His father, by way of contrast, did not even provide any documentation; he simply provided details over the phone.
14. Furthermore, it was the case that the Respondent provided the Claimants with all their protective clothing, including shirts with the company logo on. They were told where to work, when to work and Mr Miller senior, as the supervisor, kept in touch with the Respondent daily to keep them informed and to obtain instructions. As far as Mr Miller junior was concerned, notwithstanding the fact that he was paid effectively on a piece work basis, the Tribunal felt that the other matters, in particular that he worked under the instruction, direction and control of the Respondent, meant that he was not engaged in a business undertaking.
15. In my judgment there is no error of law in the way in which the Tribunal approached the matter or in the detail with which they went into it. Mr Hignett's well argued appeal really amounts to no more than an attempt to go behind findings of fact and to comb through this Decision with a fine-tooth comb in order to find instances of possible differences of expression in different parts of the Decision, an exercise which many panels of the EAT have categorised as inappropriate.
16. The third ground of appeal is that there was an error of law in respect of the finding that there was mutuality of obligation sufficient for there to be a contract in respect of a worker.
17. Again, the fact was that for a period of well over three years the Respondents to the appeal were continuously engaged by the Appellant on various projects. The evidence of the Appellant was that they always tried to find the Claimants work and were successful in doing so over that period of in excess of three years without a break. The Claimants also took their obligations seriously. They performed their parts of the contract personally for the entire time. They did not work for anybody else other, possibly, than the occasional foreigner performed for family or friends.
18. Again, in my judgment, there is nothing erroneous in law in the approach which the Tribunal took to this aspect of the matter. In paragraph 9 of the Decision they repeated again the relevant passage from the Byrne case, pointing out that the intermediate category of work described in that case is singularly apposite for persons within the construction industry: who work as labour only contractors, in practice for long periods, for a single employer, as an integrated part of his workforce, with limited specialist skills, supplying little or nothing by way of equipment and undertaking little or no economic risk. In that case the EAT further stated that the fact that for tax purposes they might be regarded as self-employed and hold certificates to prove it is relevant but not decisive for the question under the Regulations. In paragraph 10 the Tribunal went through a whole series of matters, many of which pointed to this being exactly the kind of case which fell within that intermediate category described in Byrne. It took into account the factors which pointed the other way and came to a conclusion to which, in my judgment, they were entitled to come. There was, accordingly, no error of law or perversity in their so concluding and therefore, notwithstanding Mr Hignett's sterling efforts, in my judgment this appeal, on this aspect of the matter, must fail; and to that extent the appeal is dismissed.
19. The remainder of the appeal, on the calculation of the award, is stayed for the reasons which I have already indicated.