United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MS D ROBERTSON (Solicitor) Messrs Balfour & Manson Solicitors 54-56 Frederick Street Edinburgh EH2 1LS
For the Respondent	MR B NAPIER QC (Advocate) Instructed by: Messrs Shepherd and Wedderburn LLP MNP Solicitors Saltire Court 20 Castle Terrace Edinburgh EH1 2ET

SUMMARY

Contract of Employment: Definition of employee

The Employment Tribunal found that the Claimant was a worker but not an employee. She appealed on the grounds that the dismissal was perverse and the Tribunal had given too much weight to the parties' own description of her status. The EAT dismissed the appeal holding that the decision was open to the Tribunal, and no error of law had been identified.


 


THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT)

1. This is an appeal against the finding of the Tribunal sitting in Edinburgh, in which the Chairman held at a pre-hearing review that the Appellant was not an employee of the Respondent, Edinburgh Leisure, in the period from the 9 January 2000 to the 15 September 2005. However, the Chairman did find that she was a worker during that period within the definition contained in the Employment Rights Act, the Working Time Regulations and the Part Time Worker (Prevention of Less Favourable Treatment) Regulations 2000. The Respondent company does not seek to challenge that conclusion. We shall refer to the appellant as the Claimant, as she was below.
2. The Statutory Provisions

The definition of employee and worker are found in s.23O of the Employment Rights Act 2000:

"(1) In this Act "employee" means an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment.

(2) In this Act "contract of employment" means a contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing.

(3) In this Act 'worker' (except in the phrases 'agency worker' and 'home worker') means an individual who has entered into or works under (or, where the employment has ceased, worked under) –

(a) a contract of employment; or

(b) any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual;

and any reference to a worker's contract shall be construed accordingly."

3. It is material briefly to note certain points. First, all employees are necessarily workers but not all workers are employees. Second, the obligation to provide personal service is a necessary element in the definition of both worker and employee. Without that obligation, the individual falls outwith the employment regime altogether. I mention this because the Claimant appeared to be suggesting that the obligation to provide personal service supported her contention that she was an employee. In fact it is of no assistance in determining whether someone is an employee or independent contractor. Third, the distinction which has to be drawn is not simply between those in business on their own account, who may be self employed, and those who are not. It is clear that even where the individual is not carrying on a business on his or her own account, he or she may be employed under a contract for services. The significance of this is that some of the older cases seek to identify the division between employees and independent contractors by asking whether a person is in business on their own account. That is not now the dividing line between employees under a contract of employment and the self employed who are employed under a contract for services, as I sought to explain in James v Redcats [2007] IRLR 296, paras 41 ff.

The background

4. The Claimant was engaged as a fitness instructor with Edinburgh City Council some time in 1996. She was paid a fixed amount per hour for each class and was put on the council's payroll. She did such classes as line dancing, mixed fitness sessions and aerobics.
5. In April 1998 the Respondent took over the management of Edinburgh City Council's sport and recreational facilities. This included the responsibility for the classes undertaken by the Claimant. It is common ground that the TUPE regulations applied to this transfer. The council officer who dealt with the staff to be transferred, Mrs McBain, did not identify the Appellant as an employee who transferred on the grounds that she was a casual member of staff. As such, she did not receive sick pay, paid holidays or pension rights.
6. In fact, however, the Claimant continued working in the same way for the successor. She continued to have tax and national insurance deducted at source. Then sometime in 1999 the Claimant requested that the Respondent make the monthly payments gross of tax and national insurance. That request was acceded to, although precisely why was not clear to the Tribunal. The Appellant wanted to be in a position to set off certain expenses against the tax she had to pay. Subsequently she went back onto the Respondent's payroll in October 2004 and remained on it until the termination of her engagement.
7. The only documentation in existence at that stage appears to have been a document identified as a consultancy agreement, headed 'Self Employed Coaches'. This purported to represent that the Appellant was an independent contractor; in dealing with 'status' clause 8 said this:

"It is hereby declared that it is the intention of the parties that the coach will have the status of a self-employed person and shall not be entitled to any pension, bonus or any other benefit from Edinburgh Leisure. Edinburgh Leisure will deduct income tax and national insurance from the fee and forward the same to the appropriate tax office."

8. In fact, at that time it appears likely that the money was being paid gross to the Appellant. The Chairman concluded that whilst the Claimant had expressed doubts as to whether she had signed this document, her signature was on the document and he was satisfied that she had done so. She confirmed that she had had no holiday, sick pay or pension rights, which those recognised as employees received.
9. The Tribunal found that she signed a further consultancy agreement in February 2003 in virtually identical terms to the earlier contract, but she deleted clause 8 and substituted in manuscript the following: "Not applicable, self employed status pay own Tax and N.I." She told the Tribunal that she had done this because she was afraid that the existing clause might "mess up her wages."
10. In the course of her work, the Appellant provided her own music and compact discs and paid for her phonographic performance licence amounting to £200.00 per year. The Respondent provided a studio, sound system, steps, aerobic mats, weights and various other items of equipment necessary to carry out her fitness and aerobic classes.
11. The Appellant also accepted that when she returned to the Respondent's payroll in October 2004 the reason was that she could then transfer the tax allowances to a weekend job which she had recently commenced. In certain other respects she was treated as self-employed. She had to make a contribution to a course she attended at Loughborough entitled 'A Fitness Convention', whereas those who were perceived to be employees did not. However, on other occasions the council did pay for her training.
12. She was provided with certain items of clothing, such as tee-shirts and fleeces, which she was required to wear when carrying out her duties. The clothing contained the logo 'Edinburgh Leisure'. The purpose, as the Tribunal found, was to promote corporate identity and help the public identify the coaches. Those deemed to be employees were provided with more extensive clothing. The Tribunal accepted her evidence that she was required to carry out a customer questionnaire as part of the review of health and fitness.
13. The courses were timetabled on a four-monthly basis, although in practice the new timetable would reflect the old save to the extent that there were any new courses. In the event of any inability to attend the class, she was asked to give fourteen days' notice and if possible to suggest a replacement coach who might be available to cover the absence. Ultimately, however, the Tribunal expressly found that it was for the Respondent to find the cover. These forms were available for all staff, including those accepted by the employer as being employees.
14. Throughout her engagement the Appellant regularly did work with other organisations apart from the Respondent. She did freelance work and at various intervals provided classes for other clubs in Edinburgh either on a regular or casual basis. Moreover, by the time of her dismissal she had begun to hire halls where she could provide classes lasting for one hour. She would advertise her services with respect to those classes.
15. Then in January 2005 the Respondent indicated that they were intending to treat staff differently. They identified three categories of staff. First, those who provided few hours per week and for whom the employment with the company was not their main source of income; second, those who worked a significant number of hours on a regular basis and for whom it was the main source of income; and a third category for those who did not fall neatly into either of the other two. The second category was to be given contracts of employment, but the first were to be treated as self-employed. The Appellant was considered to fall within the first category. She considered that since the work with Edinburgh Leisure was her principal employment, she should be treated as an employee.
16. There were then various discussions between the Appellant and the company and subsequently she was in fact offered a contract of service, but at a lower rate of pay than she had been receiving. Accordingly, she rejected it. She contended that she was an employee and was entitled to continue to receive her current (higher) salary. Following the refusal to accept these terms, her contract was terminated. She submits that this was an unfair dismissal. In addition she claims that she was not given annual leave as required by the Working Time Regulations, and was discriminated against under the Part Time Workers (Prevention of Less Favourable Treatment) Regulations 2000.
17. The Claimant submitted to the Tribunal that applying the well known test laid down by MacKenna J in the Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497, the criteria necessary to establish a contract of employment, namely the obligation to provide personal service, the control of a kind to establish such a status, and the lack of any features inconsistent with such a contract, were all met. She further submitted that notwithstanding the apparent description of herself as self-employed and as an independent contractor as identified in the contractual documents, the Tribunal had to look at the reality of the relationship. The label put on the relationship by the parties should only carry weight if the relationship were ambiguous and could fall into one category or another: see the observations of Lord Denning in Massey v Crown Life Insurance Company [1978] 2 All ER 576. She had a limited right to suggest an alternative, but had to give fourteen days' notice of that in any event.
18. It was also asserted that even if she were not an employee, she was a worker. That, in fact, the Tribunal found to be the case and there is no appeal against that. The Respondent had contended that there was no irreducible minimum mutual obligation between the parties; and no duty personally to do anything since a substitute could be employed. These would have negated a finding that she was a worker. However, after considering various authorities, the tribunal rejected these submissions. Since the question of worker status is not now in issue, we need say no more about that part of the case.
19. As to the employee status, the employers contended that the position was made unambiguously clear by the terms of the contract. Both parties intended that the Claimant should be self employed; they did not intend that any employment contract should arise. They further relied on other features to establish self-employed status, namely the limited hours of work; the fact that she did marginally more work elsewhere than with the Respondent – as the Tribunal accepted was the case; that she was not reimbursed for expenses; that she retained significant control over her classes; and that she had to provide more of her own clothing and equipment than did those treated as employees.

The Chairman's conclusion

20. The Chairman considered various aspects of the relationship. He found that there was insufficient evidence available for him to determine whether the Claimant had been employed under a contract of services when with Edinburgh Council (he said Edinburgh Leisure, but that is clearly a mistake.) in view of the fact that the burden of proof was on the Claimant, he held that she had not discharged it with respect to that earlier period. (One of the grounds of appeal was although the Chairman was correct to state that the burden was on the employee, he could not properly determine the status in this case by relying on that fact given the evidence. This argument is premised on the basis that the Chairman meant Edinburgh Leisure. I am wholly satisfied that he did not and that he intended to refer to Edinburgh Council at that point in the judgment. Ms Robertson, who ably represented the Claimant, accepted that this was the fairest construction of this passage in the judgment. The status of the Claimant at the material time was not determined by the application of the burden of proof, and accordingly I say no more about this ground.)
21. The Chairman went on to hold that from the date when the first contract was signed, the evidence supported the conclusion that the contract was a contract for services and not a contract of service. The reasoning was essentially as follows. First, that was the clear effect of the written document. This was not merely because it stated in terms that the Claimant was self employed, but because other elements of the contract, for example identifying the payment as a fee, requiring her to meet her own expenses, and providing for seven days notice in all circumstances, also supported that conclusion. If the written contract had been a complete record of the agreement, the status would have been clear. However, the Chairman accepted that the document was not intended to be a complete record of the agreement, and that it was necessary to have regard to the day to day operation of the contract.
22. As to this, he noted that certain features such as the fact that there were occasional appraisals, that some clothes were provided, and that the respondents paid for some training courses, were all factors which pointed in favour of employee status. As against that, although the Claimant had certain obligations with which she had to comply when conducting at least some of her classes, there was considerable latitude as to how it should be run. He also said that he bore in mind all the matters before him (which would include the factors relied upon by the respondents pointing against the existence of a contract of employment) and then summarised his conclusions as follows:

"Having given consideration to all of the above, while the Chairman accepts there are many factors present which would be consistent with a contract of employment, he is nevertheless satisfied that in fact the Claimant was engaged on a Contract for Services. The Chairman did not accept the Claimant's evidence that she viewed herself as an employee throughout her engagement with Edinburgh Leisure. Her evidence was contradictory and entirely unconvincing on that matter. The respondents' position had always been that she was self-employed and the Chairman is satisfied that indeed that was the case. The Chairman was satisfied that the descriptions of the relationship given in the Consultancy Agreement were not mere labels, as canvassed by Ms Robertson but were a true and accurate statement of the legal relationship which the parties intended to apply. The manuscript statement entered by the Claimant on the second Consultancy Agreement (A4) is critical in the Chairman's determination. That constituted a clear statement of intent and demonstrated how the Claimant truly regarded herself. The Claimant at no time lodged any grievance against the respondents (until the development of events in May 2005) and really could not explain her reasons, given that as stated she was starting to have some

doubt in 2004 after visits to the library and advice obtained. Likewise, the notice provisions in the Consultancy Agreement fly in the face of the requirements of a contract of employment given her years of service. In this case the intention of the parties both as set out in the Consultancy Agreement including the notice provision, the wilful declaration of the Claimant and her other conduct were paramount. The Judgment of the Chairman is therefore that the Claimant was not an employee of the respondents."

Submissions and Discussion.

23. The basis of the appeal is this. It is submitted that the finding of the Tribunal is so clearly wrong that it is perverse. Reliance is placed, as it was below, on the passage from MacKenna J's judgment in the Ready Mixed Concrete [1968] 2 QB 497 where he identified the criteria for determining whether a contract of employment exists the following way (p.515 C):

"A contract of service exists if three conditions are fulfilled.

(i) The servant agrees that in consideration of a wage or other remuneration he will provide his own work and skill in the performance of some service for his master.

(ii) He agrees expressly or impliedly that in the performance of that service he will be subject to the other's control in a sufficient degree to make that other master.

(iii) The provisions of the contract are consistent with its being a contract of service.

24. Ms Robertson submitted that these three criteria were satisfied here. In this case the Tribunal found that there was a sufficient obligation of personal service. As to control, the only proper conclusion, it is said, is that it was sufficient to establish a contract of service. Some reliance was placed by Ms Robertson on the decision of the Privy Council in Narich Pt Ltd v Commissioner of Payroll Tax [1984] ICR 286. In that case the issue was whether lecturers who carried out weight watching classes for an Australian company operating a franchise were employees, despite being described in their written contracts as self employed. If they were employees, a payroll tax had to be paid with respect to them. The evidence was that they had to work where and when directed by the company and to teach their classes so as to advance the welfare of the members according to the principles of the franchisor. They also had to teach the classes in accordance with the lecturer's handbook which set out detailed instructions as to how each of twenty eight different subjects were to be taught. The Privy Council dismissed an appeal from the Supreme Court of New South Wales which had in turn upheld the judgment of Woodhouse J that the evidence demonstrated that the employers controlled not merely the tasks to be allocated to the lecturers, but also the manner in which they were to perform them. Lord Bridge of Harwich, giving the judgment of the Court, said this:

"The plain situation in law is that a lecturer is tied hand and foot by the contract with regard to the manner in which she performs her work under it. In these circumstances it is not possible to hold that she is, in relation to Narich, an independent contractor. On the contrary, the only possible conclusion is that she is an employee."

25. Ms Robertson places emphasis on the last sentence quoted. She submits that the position is the same here, particularly with respect to the slimming classes carried out by the Claimant. The only conclusion available to the Tribunal Chairman was that the Claimant was an employee. The Claimant had to perform the particular classes allocated to her so she had no significant control over the conduct of the class; she had to carry out their instructions with respect to the health and fitness questionnaire; she had to wear certain clothing issued by the employers; and she was obliged to use some of their equipment.
26. Ms Robertson also submits that as regards the third feature highlighted by Mackenna J, there was virtually no obligation inconsistent with a contract of employment. The classic criteria which would support a finding that the status was that of independent contractor rather than employee would include the provision by the employee of his or her own insurance; the taking of financial risk; the provision of tools and equipment; and the provision of training. Each of these factors was considered by the Chairman and on the facts the conclusion gave no support for the finding that the contract was a contract for services. Here the Claimant was covered by the company's insurance; she took no financial risk, being paid hourly; she provided only modest equipment; and some of her training was paid by the employers. There was nothing which was inconsistent with a contract of employment.
27. A related ground of appeal was that excessive weight had been placed by the Tribunal upon how the Claimant viewed the relationship. In para.134, reproduced above, the Chairman had described this as critical in his determination. Again some reliance is placed on the Narich case in which the Privy Council found that the statement that the workers in that case was self employed failed in its purpose given the effect of the contract as a whole, even although the Privy Council accepted that the clause was not a sham or inserted in bad faith.
28. In this connection I was referred to the well known case of Massey v Crown Life Insurance Company [1978] IRLR 31. In that case a person had entered into a contract, at his own instigation, which purported to characterise him as self employed. Subsequently he took proceedings for unfair dismissal and claimed that he was an employee. The issue arose as to the significance of the label placed on the relationship by the parties. Lord Denning summarised the position as follows:

"13. …This is clearly seen by referring back to the case of The Commissioners of Inland Revenue v His Grace the Duke of Westminster (1936) AC 1. The duke had a gardener and paid him for his work a weekly sum. But, in order to avoid tax, his solicitors drew up a deed in which it said that his earnings were not really wages, but were an annual payment payable by weekly instalments. The House of Lords held that, to find out what the true relationship was and what the true nature of these payments were, you had to look at the deed. Lord Tomlin said (at page 19) that 'every man is entitled, if he can, to order his affairs so that the tax attaching under the appropriate Acts is less than it otherwise would be'. The gardener did the same work as before but the legal relationship was changed by the deed drawn up by the solicitors.

15. It seems to me on the authorities that, when it is a situation which is in doubt or which is ambiguous, so that it can be brought under one relationship or the other, it is open to the parties by agreement to stipulate what the legal situation between them shall be. That was said in the Ready Mixed Concrete case in 1968 by Mr Justice MacKenna. He said (at page 513) that 'if it were doubtful what rights and duties the parties wished to provide for, a declaration of this kind might help in resolving the doubt and fixing them in the sense required to give effect to that intention'.

16. So the way in which they draw up their agreement and express it may be very important factor in defining what the true relationship was between them. If they declare that he is self-employed, that may be decisive."

29. Ms Robertson accepts this as a statement of principle. However, she says that it makes it plain that unless there is ambiguity in the relationship, the parties' own description of the relationship will not be of any weight. She relied upon the following observation of HH Judge Serota giving the judgment of the EAT in Levy McCallum Ltd v Middleton EAT/0020/05. After considering the Massey case and a later Court of Appeal decision which referred to it, namely Young and Woods v West [1980] IRLR 201 the Judge commented (paras 19-20):

"It is clear from the authorities we have cited that the relevance of any particular factor will depend on all the circumstances of the case. It is also clear that for intention to be regarded as a decisive factor there must be some ambiguity or doubt. We do not understand the decision in Massey's case as meaning that providing a party can raise an argument that a relationship has some of the attributes of a contract of services the parties' intention will always be decisive. In our opinion it is only when after taking account of the parties' intention that there is still some real ambiguity and the case is relatively finely balanced that the parties' intention should be decisive. We note that the learned editors of Harvey at paragraph A84-85 consider that:-

"…in a borderline case where, apart from the label attached by the parties, it would be equally reasonable to conclude that the worker was a servant or that he was an independent contractor, then an express declaration by the parties may be conclusive."

If parties agree to create a horse but instead create a camel, the fact that they intended to create a horse and even call what they have created a horse is of little assistance in determining whether it is in fact a horse. Save in cases of deliberate deception one can generally find something upon which to base an argument that there is a contract of services rather than a contract of employment. Nonetheless, the label placed on arrangements by the parties and their intention is not determinative…."

30. Ms Robertson contends that this is the position here. She accepts that this is not a case where the label is imposed in bad faith or in order to deceive anyone; nevertheless it is of no relevance unless there is a genuine uncertainty as to the nature of the relationship. That is not this case, she says.
31. Mr Napier QC, counsel for the Respondents, submits that in substance these grounds can be subsumed under the one challenge, which is essentially a perversity appeal. He submits that the essence of the appeal is that there was no sufficient evidence before the Tribunal to justify its decision. He reminds me of the considerable burden which any appellant faces in making good such an appeal, relying on the observations of Mummery LJ in Yeboah v Crofton [2002] IRLR 634 to the effect that it was incumbent on an appellant to establish an "overwhelming case" (para 93). This is particularly since here the decision is classically one where different tribunals may reach different decisions on the same facts. As Mummery J, as he was, emphasised in the earlier case of Stewart v Cleveland Guest (Engineering) Ltd [1994] IRLR 440, para 33, a perversity appeal cannot succeed merely because the Appeal Tribunal would have reached a different conclusion on the evidence, or disagrees with the employment Tribunal's assessment of the merits or of the facts.
32. Here it was, to use the language of Sir John Donaldson in O'Kelly v Trust House Forte [1984] 1 QB 90, 124 "all a question of fact and degree." The effect of this, at least where appeals are limited to points of law, is that the focus of attention must be on the fact finding tribunal. It is only if that body misdirects itself in some way or reaches a decision without any evidential foundation that an appellate court can interfere. The point was emphasised by Lord Hope in the recent Privy Council decision in Hanna v Imperial Life Assurance Company of Canada (The Bahamas) [2007] UKPC 29, paras 17-18:

"In Lee Ting Sang v Chung Chi-Keung [1990] 2 AC 374 Lord Griffiths, delivering the judgment of the Board, said at p 384E-385A that the question whether or not a person is employed under a contract of service was often said to be a mixed question of fact and law. There might be exceptional cases where, because the relationship was entirely dependent upon the true construction of a written document, it is regarded as a question of law. But it must be taken as firmly established that, where it had to be determined by an investigation and evaluation of the factual circumstances in which the work was performed, it was to be regarded by an appellate court as a question of fact to be determined by the trial court. He referred to a series of decisions in the Court of Appeal and the House of Lords in which it had been held that a finding by the trial judge that a person was, or was not, employed under a contract of service was a question of fact with which an appellate court could only interfere if there was no evidence to support his finding.

The question which the Appeal Court should have asked itself, therefore, is whether there was no evidence to support the conclusion reached by Thompson J. Was her decision, in other words, one which no reasonable person acting judicially and properly instructed as to the relevant law could have reached? The answer to that question must be found by examining the whole of the material that was before the trial judge. No single factor is likely to be conclusive. The fact that the appellant was described as an agent in the written agreement will not prevent his being held to be an employee if this is what the facts, regarded as a whole, indicate. Conversely the fact that the contract was described in the termination letter of 1 October 2005 as a contract of employment – "an egregious error", said Mr McDonald – does not on its own conclude the matter in the appellant's favour. "

33. Mr Napier accepted that the first two criteria in the Ready Mixed case were satisfied. There was on obligation to provide personal service, notwithstanding a limited power of delegation, and the control was of a kind which could in principle have justified the conclusion that the contract was a contract of service, although unlike the Narich case, it was not so extensive as to compel that conclusion. However, the issue was whether there were other features which were inconsistent with a contract of service. This, he suggests, was classically a case where different conclusions were open to the Tribunal. Some factors pointed in favour of a contract of service; some pointed against that status and more in favour of a contract for services; and other features were neutral. The Chairman did not consider that the self employed status was a mere label which provided an inaccurate description of the employment status. On the contrary, he considered that it was a true and accurate statement of the relationship which the parties wished to create. He did this having had regard not only to the contractual terms but also the way in which the contract was performed. Identifying the test as adumbrated by Lord Hope, it was impossible to say that the decision here was outwith the conclusions which a reasonable tribunal could reach. The factors pointing in favour of the chairman's conclusion included the fact that the payment was described as a fee, that the Claimant was responsible for her own expenses, that she worked for a number of other bodies, that she paid for some of her training and provided some equipment, quite independently of the intentions of the parties as reflected in the written document. Moreover, the fact that there was no sick or holiday pay, no pension, and only seven days notice irrespective of the length of service, were also of some materiality, although Mr Napier accepted not much since they were more the consequence of the status than factors which assisted in determining it.
34. Mr Napier placed some emphasis on the decision of Mummery J in Hall (HM Inspector of Taxes) v Lorimer [1992] 1 WLR 939 in which the court had to determine the status of a vision mixer who worked freelance for a number of different companies. The Special Commissioners had concluded that he was self employed so that his earnings were properly assessable under schedule D. The Crown appealed, contending that he was an employee engaged under a series of engagements. Mummery J set out what he accepted was a "formidable argument" in favour of the Crown's case; as here the companies for whom he worked provided equipment; he took no business risks; and had to work where and when the company stipulated. However, since the Commissioner had properly considered all relevant factors, and the decision was open to him on the facts, his Lordship was not prepared to interfere with the decision
35. Mr Napier accepted that if the Chairman had simply determined the status on the basis that the Claimant considered herself to be self employed, that would indeed be an error of law. But he submitted that this was not a fair reading of the decision taken as a whole. It was plain that the Chairman had considered all relevant factors in reaching his decision. The Chairman had referred to the case as "multi-faceted"; he had in terms recognised that the day to day operation of the contract had to be considered; and he had structured the decision in a way which showed that he was not determining the status by reliance on one issue alone. The Chairman had given significant weight to the intentions of the parities, but it was his prerogative to do that.

Conclusion and discussion

36. I accept the analysis of Mr Napier. In my judgment there are two interrelated issues that I have to decide. The first is whether there was a proper evidential basis for the conclusion that the Claimant was self employed. In my judgment there was. Undoubtedly there were, as Ms Robertson pointed out, numerous factors which pointed in favour of a contract of service. But that is not the issue, as the decision in Hall v Lorimer vividly illustrates. In my judgment, contrary to the submissions of Ms Robertson, there were some features of the relationship which were more consistent with a self employed rather than an employee relationship. These included the fact that the Claimant provided some equipment, paid her own expenses, paid for some of her training, and worked for a number of clients. In addition, she was treated differently to employees with regard to clothing and in the form which appraisals took. To adopt the language of Lord Hope in the Hanna case, I do not think it can be said that there was no evidence to support the conclusion reached by the Chairman. It does not seem to me that the only proper conclusion in the circumstances is that the Claimant must be treated as an employee. In reaching this conclusion I have had regard to certain observations of Mummery J in the case of Hall v Lorimer where, in the course of his judgment he referred to the decision of the Court of Appeal in the O'Kelly v Trust House Forte, a case which had held that waiters working on a casual basis could properly be held to be self employed. Mummery J commented (p.943):

"The importance of that case is that the Court of Appeal held that it was quite possible for a fact finding tribunal, properly instructed on the facts and the law, to conclude that a person was in business on his own account and not a party to a succession of contracts when all that he supplied was his own services, without providing any equipment or having any risk of loss or prospective profit."

37. Once the conclusion is reached that the finding was open to the Tribunal, then it seems to me that it is difficult for the case to succeed on the second ground, which is that the Tribunal gave inappropriate weight to the characterisation of the relationship made by the parties, and in particular the perception of the Claimant herself. If the facts are such that there is genuine uncertainty about the precise status, then at that point the characterisation of the relationship by the parties can properly be considered and given such weight as the tribunal thinks appropriate. I accept that there must be genuine doubt, as the EAT said in the Levy McCallum case. The point was put neatly by Lord Fraser giving the judgment of the Privy Council in Australian Mutual Provident Society v Chaplin (1978) 18ALR 385 where he said that a statement by the parties purporting to identify the status of the relationship "cannot receive effect according to its terms if they contradict the effect of the agreement as a whole." (That does not merely mean the written terms however.) Once there is some genuine doubt, as I believe there is here, and the parties have indicated an intention to create a contract for services, then as Lord Denning put it in the Massey case, "the agreement itself becomes the best material from which to gather the true relationship between them." On that basis, in my judgment the Chairman was entitled to give significant weight to the characterisation of the relationship given by the parties. Indeed, Lord Denning stated that sometimes it may be decisive. As the Chairman said, it was not just a label; the agreement was formulated in terms which were consistent with the characterisation of self employed. Read on its own, the Chairman had no doubt that it established a self employed status. Moreover, the significance of the fact that the Claimant herself had amended the agreement in 2003 was that it demonstrated that this was not a case where the employers were imposing their view of the contract onto a reluctant employee who had no real option but to accept what was on offer. She saw certain benefits for herself in the arrangements.
38. Finally, I also reject the suggestion that the Chairman determined this issue by focusing only on the Claimant's own perception of the relationship. Para. 134 is not perhaps as clear as it might be, but I accept Mr Napier's submission that read as a whole, the Chairman did consider all the factors in the round. Indeed, the Chairman said in terms that he was giving consideration to all the matters he had summarised.
39. For these reasons, therefore, this appeal fails.