United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR D J ASTBURY (The Appellant in Person)


 


SUMMARY

UNFAIR DISMISSAL – Exclusions including worker/jurisdiction

Appellant who had signed contract of employment with employment agency/business (Adecco) seeking to argue that he was employed by end-user – held unarguable in the light of James and other similar cases (especially Cairns v Visteon).


 


THE HONOURABLE MR JUSTICE UNDERHILL

1. In July 2004 the Appellant entered into an agreement with Adecco UK Limited, which is described on its face as a contract of employment. The contract included the following terms:

"1. Job Title and Duties

Adecco shall employ the employee in the capacity of WAREHOUSE OPERATIVE. The employee shall provide services to Adecco or to Adecco's clients as and when required, and during each client assignment will be subject to instruction from the client as to the day to day performance of the Employee's duties. For the avoidance of doubt, the Employee shall at all times be employed by Adecco, shall remain under Adecco's control, and shall have no contractual relationship of any description with Adecco's clients.

2. Commencement date

The Employment will commence on the first day of assignment. No employment with a previous employer counts as part of a period of continuous employment with Adecco.

3. Place of Work

The employee's place of work will be the premises of the client to which the employee may from time to time be assigned. Details of the relevant location will be given before each assignment begins.

4. Pay

Adecco will pay the Employee weekly in arrears … deductions will be made at source for tax and national insurance. The Employee will be paid an hourly rate which may vary according to the individual client assignment … Save as otherwise provided by this agreement the Employee will not be entitled to payment in respect of period not spent working on a client assignment.

The Employee is required to submit duly authorised timesheets signed by the client to Adecco by 9.3Oam each Monday

The Employee is entitled to payment from Adecco in respect of hours worked irrespective of whether Adecco has received payment from its client.

6. Hours of Employment

There are no formal working hours for this employment and the employee will be required to work at such times and for such periods as are applicable to each client assignment. … The Employee recognises that there may be periods between assignments when no work is available and when no remuneration will be due under this agreement.

7. Paid Annual Leave

The Employee will be entitled to a maximum of twenty days' paid annual leave in each complete holiday year. Adecco's holiday year runs from 1 October to 30 September.

Paid annual leave must be taken at such times as are agreed by Adecco.

8. Sickness Absence

In the event of absence on account of sickness or injury the Employee must inform Adecco of the reason for the Employee's absence as soon as possible.

11. Disciplinary Procedures

Details of Adeccos disciplinary procedure are available from the Employee's Adecco representative.

12. Grievance Procedures

The Employee should refer any grievance related to the employment to the Employee's Adecco representative

15. Termination of Employment

The Employee's employment may be terminated;

• By the employee on giving Adecco not less than two weeks' notice of resignation from employment

• By Adecco without notice or payment in lieu of notice during the employee's first month of employment or in the event of serious or persistent misconduct by the employee

• By Adecco on giving to the employee notice or payment in lie of notice as follows:

- after one month and up to two complete years of continuous employment not less than two weeks' notice

The Employee is not entitled to pay during any period of notice during which the Employee is not working on assignment to a client.

16. Cancellation of Assignments

Either Adecco or the Employee can cancel an assignment at any time without notice and without liability.

17. Miscellaneous

This document constitutes the entire agreement between the parties and supersedes all other agreements or arrangements, written or oral, express or implied, between the parties.

Adecco confirms that it will act as an employment business in respect of the Employee's assignment to its clients."

2. On 8 and 9 July 2004 the Appellant was assigned by Adecco to work at the premises of GlaxoSmithKline. He performed that assignment for two days. From 12 July 2004 until the morning of 10 January 2006 he was assigned to work at the premises of Bentley Motors Limited, the Respondent to this Appeal, where he performed warehouse and related duties. After a while he began to assert the position that it was in truth Bentley and not Adecco who were in law his employers. Following a dispute about the precise scope of his duties, he delivered to Adecco on 9 January 2006 a letter purporting to terminate his contract with them, whatever its precise nature, "forthwith". He was in fact hoping to continue to work at Bentley, at least for some further period, and he came into work on the following day, the 10^th January; but following a discussion on the phone between Bentley and Adecco he was asked to leave with immediate effect and he did so.
3. The Appellant commenced proceedings for unfair dismissal and breach of contract against both Bentley, being the First Respondent, and Adecco, the Second Respondent, on 6 April 2006. His ET1 stated among other things:

"If an employee of the First Respondent on 10^th January 2006 then I was entitled on that date not to have been unfairly dismissed. On that date, the first Respondent denied that I was its employee. On that date I was in the eyes of the Second Respondent its employee. Prior to a full hearing to determine whether or not I was unfairly dismissed by either Respondent there will need to be a pre-hearing review to establish my employment relationship, if any, to both the First and second Respondent."

However, at a case management discussion on 6 July 2006 the Appellant made it quite clear that it was his case that he was employed by Bentley and that he did not wish to pursue any claim against Adecco. The claim against them was accordingly dismissed.

4. A further preliminary hearing was fixed for 12 September 2006 for the determination of whether the Appellant was ever employed by Bentley. By a Reserved Judgment sent to the parties on 23 November 2006 the Chairman, Mr S Williams, held that the Appellant was not employed by Bentley, with the result (although this is not made explicit in the order) that his claim fell to be dismissed.
5. The Chairman in his full and careful Judgment defined the issues, at paragraph 20, as follows:

"(1) whether there was any contract at all between the claimant and Bentley and, if so,

(2) was that contract one of employment, bearing in mind that in appropriate circumstances it may be necessary to imply a contract of employment?"

He then proceeded to deal with those issues at paragraphs 22 to 25 of the Judgment in the following terms:

"22 Dealing with the first question set out above, 1 ask myself whether Bentley and the claimant offered, and accepted, an arrangement supported by consideration under which each took upon himself obligations to the other. The claimant submits that he received an offer of work from Bentley that was communicated to him by Adecco. In my judgment such an analysis does not properly describe the arrangement between these two parties. Bentley contracted with Adecco for the assignment to it, in return for payment, of such workers as were required from time to time. Bentley extended no offer of work to the claimant. Similarly, the claimant, when he contracted with Adecco, did not offer to work for Bentley. It was specifically provided between the claimant and Adecco that the claimant was entitled to cancel an assignment at any time without notice and without liability. It follows that he was not obliged to accept any specific assignment.

23 Further, as to consideration, I ask what was it that Bentley was obliged to pay to the claimant. Bentley was obliged to pay to Adecco the fee from time to time agreed between them. That fee was subject to variation based on matters quite irrelevant to the wages paid by Adecco to the claimant. It varied according to the respective bargaining power of Adecco and Bentley and it varied according to whether Adecco was given a sole supplier agreement or not. If the claimant were not paid, I ask whether he would have been able to sue Bentley for payment, and if so in what sum. In my judgment his remedy for unpaid wages clearly lay against Adecco pursuant to the terms of Clause 4 of the agreement between the claimant and Adecco.

24 In my judgment, therefore, there was no contract between the claimant and Bentley. I have considered whether it is necessary to imply a contract between the parties. The claimant, relying on The Aramis [1989] 1 Lloyd's Reports 213 contends that in this case it is necessary to imply the existence of an employment contract between Bentley and himself, not only to give business reality to the relationship and arrangements that existed between them, but also to establish the enforceable obligations that one would expect to see and that in fact were present in the circumstances of this case. The respondent relies on the judgment of Bingham L J in the same case to the effect that it is "fatal to the implication of a contract if the parties would or might have acted exactly as they did in the absence of a contract". I can find nothing in the ways in which these parties acted which was not perfectly explained by the contractual relationships which each of them had entered with Adecco. In my judgment, therefore, it is neither necessary nor permissible to imply a contract between them.

25 Notwithstanding my earlier finding, I deal for the sake of completeness also with the second question. It is an inherent, and in almost all cases necessary, feature of triangular relationships such as the one between these parties and Adecco that control of the worker, to use a neutral term, is shared between the employment agency or employment business and the end user. That feature is spelled out in the contract of employment between Adecco and the claimant. Clause I provides that during each assignment the claimant will be subject to instruction from the client as to the day to day performance of his duties. That is inevitably so since the claimant was working at Bentley's and not Adecco's premises. Hour by hour and day by day he would be directed in the performance of his duties by Bentley's management. But in other important respects Adecco also controlled the claimant. Pursuant to Clause 3 of the agreement between the parties, Adecco determined to which of its clients the claimant would be assigned, and pursuant to Clause 16 Adecco had the right to cancel any such assignment without notice and without liability. Pursuant to other clauses, Adecco controlled the disciplinary procedures to which the claimant was subject and the amount he was paid and the manner of payment. The ability of Adecco to control the claimant is graphically illustrated by the facts of this case. Mr Stier on behalf of Bentley was perfectly content that the claimant should work out his period of notice at Bentley. Bentley had no intention of asking the claimant to leave and did not do so. The claimant stated in terms in his evidence that he expected to be told on the evening of the 9 should work out his period of notice at Bentley. Bentley had no intention of asking the claimant to leave and did not do so. The claimant stated in terms in his evidence that he expected to be told on the evening of the 9 of January 2006 by Adecco not to return to Bentley the following day and, possibly, to be asked to service his notice elsewhere. On the 10 of January that is precisely what happened. Ms Exley instructed the claimant to leave Bentley's premises, and he did. Bentley could not require the claimant to continue his assignment with them because the claimant had not undertaken to them that he would do so. Bentley could not even require Adecco to continue the assignment of the claimant, as opposed to supplying a substitute worker. Thus, Bentley could not insist upon the work being done personally by the claimant. That is a degree of control which seems to me to be essential to a relationship of employer and employee. I find that the degree of control exercised by Bentley over the claimant fell far short of that which was sufficient to render the relationship between them one of employer and employee."

6. The Appellant lodged a Notice of Appeal against that decision. His grounds are summarised as follows:

"It is submitted that the Employment Tribunal erred in law in that it did not direct itself correctly with regard to two terms or facets, in particular, of the arrangement or relationship between the Respondent and myself, those two terms or facets having been mutuality of obligation and control."

7. On 30 January 2007 he was notified that Judge Clark had determined that the appeal raised no arguable point of law and that accordingly no further action would be taken on it, pursuant to Rule 3(7) of the Employment Appeal Tribunal Rules 1993. He duly served notice of dissatisfaction with that decision and the matter has accordingly come before me for an oral hearing pursuant to Rule 3(10). The Appellant has appeared in person. He has considerable familiarity with this area of law, having been the claimant in the earlier case of Astbury v Gist Limited, which has in fact been before this Appeal Tribunal twice (see UKEAT/0619/06 and UKEAT/0446/04). He has put his oral submissions intelligently and modestly. They and the skeleton argument on which they are based have ranged somewhat more widely than the two specific points made in the Notice of Appeal, though I think that those remain central to his submissions.
8. In view of the breadth of the overall submission which the Appellant has made, it is convenient if I myself also start with an overview. What the Appellant was asking the Tribunal to do in this case was to imply a contract of employment between himself and Bentley in circumstances where the parties were proceeding on the express basis that he was not employed by Bentley but was instead an employee of Adecco. Notwithstanding some of the obiter observations in Dacas v Brook Street Bureau UK Ltd [2004] ICR 1437, I take the law now to be settled since the decision of this Tribunal in James v London Borough of Greenwich [2007] ICR 577 that such an implication should only be made where it is necessary to do so; and that it will not be necessary to do so when the actual arrangements operated by the parties can be explained on the basis of the express contractual agreements entered into by them. James has already been followed and applied in several decisions of this Appeal Tribunal: see Craigie v London Borough of Haringey, (Bean J) (UKEAT/0556/06); Cairns v Visteon Plc [2007] ICR 616 (Judge Clark); and indeed the second of the two Astbury v Gist decisions referred to earlier, again a decision of Judge Clark. I am told by Mr Astbury that an appeal to the Court of Appeal is pending in James and is listed for hearing in October; but I am bound to say that whatever the outcome of the case on its particular facts I regard it as unlikely in the extreme that the Court of Appeal will take a different view on the basic propositions of law to be found in James and to which I have referred above. Although the Chairman in the present case did not have the benefit of the decision in James, the way in which he addressed the issues was entirely consistent with it; and I can see nothing even arguably wrong with his analysis in the paragraphs which I have set out.
9. The Appellant submitted that the facts of the present case are different from those in James, and indeed in Dacas and Cable and Wireless plc v Muscat [2006] ICR 975, inasmuch as the purported contract with the employer in his case was a contract of employment rather than, as in those cases, a contract for services; but I cannot see that this makes any fundamental difference. In fact in Cairns also the contract was a contract of employment; but the Appeal Tribunal in that case applied the law as stated in James. If anything, it seems to me that the fact that the purported contract with Adecco was a contract of employment makes Bentley's position the stronger.
10. Against that background I can deal fairly shortly with the various points made by the Appellant. I start with the two points made in the Notice of Appeal. The first concerns mutuality of obligation. The essential point made by the Appellant is that because under the contract Adecco undertook no obligation to find assignments for him, nor to pay him in between assignments, but were to employ him only on an "as and when" basis, the element of mutuality of obligation necessary to a contract of employment was absent. He relies on the decision of the House of Lords in Carmichael v National Power plc [1999] ICR 1226. The second point concerns control. The contract, as will have been observed, provides that the Appellant is to take instructions on a day-to-day basis from Bentley, albeit that it is stated that ultimate control remains with Adecco. The Appellant submits that, whatever language the contract may have used, it is plain that day-to-day control was with Bentley and that that is inconsistent with Adecco being his employer. He relies on the decision of the Court of Appeal in Bunce v Postworth Ltd [2005] IRLR 557.
11. I am not convinced that either point is in fact right. As regards mutuality of obligation, whatever the position between assignments, it seems to me that there would in fact be sufficient mutuality of obligation for him to be an employee of Adecco at least during the currency of each assignment (see Cornwall County Council v Punter [2006] IRLR 362). As regards control, it is indeed true that in the many cases where the question is whether a contract which is not described on its face as a contract of employment is nevertheless to be characterised as one in law the fact that the putative employer has no day-to-day control has been held to be fatal: see the cases referred to in paragraph 46 of the Judgment in Bunce. But whether its absence is fatal in a case where the parties themselves describe the relationship between them as constituting a contract of employment is another matter: in such a case I would not have thought that the absence of day-to-day control necessarily meant that the contract could not properly be characterised as a contract of employment.
12. However, even if those points are arguable, as they may be, it does not seem to me that showing that the contract with Adecco was not a contract of employment can assist the Appellant in his contention that he was employed by Bentley. Whatever the correct characterisation of his contract with Adecco, there can be no doubt that there was a contract, and that contract explains the relationship of Appellant and Bentley in a way which makes it wholly unnecessary to imply any contract between them. The Appellant's services were being supplied to Bentley by Adecco; and for that purpose the precise nature of the arrangements between the Appellant and Adecco is immaterial. It is essentially for that reason that I regard this appeal as unarguable.
13. A point which the Appellant made with some force in his oral submissions, though it does not specifically feature in his grounds of appeal, is that Adecco's true business was, as it always had been, that of an employment agency: although it had, he said, recently adopted a system of issuing what were described as contracts of employment and describing itself not as an employment agency but as an employment business, that could not mask the reality of the situation. He submitted that the business of an employment agency is to introduce employees to employers: it is not typically an employer itself, and the workers whom it introduces to its clients become employees of those clients. This must I think be in law an argument that the contract of employment entered into by the Appellant and Adecco was a sham. It does not seem that it was put this way before the Tribunal; but even if the point were now open to the Appellant I can see no basis for saying that the Chairman was obliged to make such a finding..
14. The Appellant suggested that even if he had a contract with Adecco it was terminated at the end of his first assignment, that is to say after the two days which he spent assigned to GlaxoSmithKline, and that thereafter there was no contract in place. I can see no basis for such a submission. Whether or not the July 2004 contract constituted an 'umbrella contract', its terms were plainly activated on each occasion that the Appellant started to work pursuant to an assignment. I can see no basis on which it can be said that the contract had no effect once the Appellant started to work at Bentley, even if there may have been a period of days when there was no contract in force following his leaving GlaxoSmithKline. In any event, this point comes up against the same difficulty which I have referred to earlier: whatever the precise nature in law of the arrangements between Adecco and the Appellant, those arrangements adequately explain the basis on which the Appellant was working for Bentley without having to resort to the implication of a contract of employment between him and Bentley.
15. The Appellant also floated the possibility that there might have been dual contracts, that is that he may have been employed both by Adecco and by Bentley. But I do not see how that resolves his difficulty. If there was a contract between Adecco and the Appellant which adequately explains the basis on which the Appellant was working for Bentley, there is no need to imply a contract with Bentley whether that would be parallel to the contract with Adecco or in place of it. Contracts are not to be multiplied without necessity.
16. For all those reasons, I have come to the conclusion that this appeal is not arguable and I decline therefore to make any order displacing the decision already taken under Rule 3(7).