United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR D STEVENSON (Solicitor – Advocate) Instructed by: Messrs Thompsons Solicitor 16-18 Castle Street Edinburgh EH2 3AT
For the Respondent	MR J LEE (Solicitor – Advocate) Scottish Engineering 105 West George Street Glasgow G2 1QL


 


SUMMARY

CONTRACT OF EMPLOYMENT

JURISDICTIONAL POINTS: Worker, employee or neither

Reference under s.11 of the Employment Rights Act 1996 regarding statement of commencement date of employment. Written contract issued in 2001 showing start date of 1 October 2001 but claimant having worked for the respondents since 1990. Employment Tribunal's judgment that 1 October 2001 was an accurate statement of the commencement date challenged on appeal as not being supported by adequate reasons. Appeal upheld and case remitted to a freshly constituted tribunal.

THE HONOURABLE LADY SMITH

Introduction

1. This is an appeal by an employee against a judgment of an Employment Tribunal sitting at Glasgow, Chairman Mr Roy MacIver, sitting alone, registered on 14 August 2007. It was a judgment in a reference under s.11 of the Employment Rights Act 1996 ("the 1996 Act") and was in the following terms:

"It is the judgment of the Tribunal that , on referral of the question of the commencement date of the claimant's employment with the respondent stated in his contract of employment , the date of 1^st October 2001 stated therein should be confirmed."

2. The significance of the commencement date of the employee's employment is that it fixes the first date from which he was entitled to enter the Mirror Group pension scheme.
3. I propose to refer to parties as claimant and respondents.
4. The claimant was represented by Mr McLaughlin, solicitor, before the tribunal and by Mr Stevenson, solicitor-advocate, before me. The respondents were represented by Mr Bradley, solicitor before the tribunal and by Mr Lee, solicitor, before me.

Background


5. The factual background is to be found in the findings in fact in the tribunal's judgment and in the Chairman's response to questions posed subsequently on a reference back to him under the procedure explained in the case of Barke v SEETEC Business Technology Centre Ltd [2005] IRLR 633.
6. The respondents are a company which publishes daily and Sunday newspapers. The claimant has worked on newspapers since prior to 1990. In April 1990, the claimant approached the respondents and was invited to work a trial shift, which he did. He was then asked to work a number of shifts, which he also did. Shortly after that the Features Editor told him that if he committed himself to working Features he could have as much work as he wanted. Thereafter, as the tribunal's findings in fact record:

"5. His work settled into a regular pattern, working three days per week, either Tuesday to Thursday or Wednesday to Friday, on each occasion working a six hour shift…. In late 1996 or early 1997, he moved to work on the magazine, which had a regular pattern of Wednesday to Friday. There were occasions on which he worked two shifts in the same day, often working a second shift on the sports section of the newspaper… He undertook additional work, including occasional pieces of writing and the regular compilation of the weekly crossword puzzle, for which he received separate payment."

7. The number of shifts worked each year varied, as did the number of shifts worked each month. The arrangements under which the claimant worked were that shifts were allocated to him in a rostering system. He would have given a prior indication of the times that he was prepared to undertake shifts. Although the claimant's agent had a note of him being asked whether he ever refused to work a rostered shift, the Chairman answered a Barke question regarding that to the effect that the claimant was not asked that question. Mr Lee advised, somewhat surprisingly given that whether the question was asked (and answered) had been an issue between parties for some time prior to the appeal, that the matter had not been checked with the agent who acted for the respondents at the tribunal hearing.
8. As regards other matters, the claimant could not send a substitute to do his work in his place. He also required to comply with the house style and worked, broadly speaking, to the chief sub-editor's instructions. He was paid through the PAYE system except in relation to the additional work referred to above for which he was paid gross. He normally took three weeks holiday each year, giving notice of his intention to do so and not having to seek prior approval of the dates proposed. He received holiday pay, initially on the basis of one day's pay for every 13 days worked. That system of holiday pay was replaced by one which incorporated holiday pay in the rate per shift.
9. In September the respondents issued to the claimant a written contract, to which he thereafter worked. It provided as follows:

"Date of commencement

The commencement date of your employment is 1 October 2001 which is also the commencement date of your period of continuous employment with the company.

Hours of Work

You will normally be required to work 4 shifts per week over 3 days. Currently this is on Wednesday, Thursday and a double shift on a Friday. The company reserves the right to change the days of working …

Your double shift on a Friday consists of work on the sports desk and if the company should cease to require your services for this or if you no longer wish to undertake such duties you hereby agree that your annual salary reduces accordingly … You would receive and be required to give one month's notice of such a change.

Holidays

…Holidays must be approved in advance by the Editor or nominated editoral executive …

Pensions

Membership of the MGN Pension Scheme is normally voluntary but, for all employees joining the Company who are aged 35 or over, entry is automatic from the date of joining the Company unless they advise in writing that they do not wish to join the Scheme."

10. The claimant enquired as to the possibility of his membership of the scheme being effective from 1990 but was informed he was not eligible as prior to October 2001 he had been working on a purely casual basis.

The Tribunal's Judgment

11. The tribunal recognised that it required to consider whether there was an irreducible minimum of obligation on either side to create a contract of service. They referred to the cases of Nethermere (St Neots) Ltd v Gardiner [1984] IRLR 240, Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2QB497, Carmichael v National Power plc [2000] IRLR 43 and Clark v Oxfordshire Health Authority [1998] IRLR 125. They also referred to the case of Airfix Footwear Ltd v Cope [1978] IRLR 396 and tribunal decisions in cases involving claimants who worked as sub-editors under very similar arrangements to those of the claimant (Cook v Scottish Daily Record and Sunday Mail (1986) Ltd Case S/102761/97 and Roberts v Telegraph Publishing Ltd Case 320639/05) where the claimants had succeeded in showing that they were employees notwithstanding the respondents' contentions that they worked on a casual basis.
12. The tribunal does not refer to the case of Cornwall County Council v Prater [2006] EWCA Civ 102 which, I was advised, had been founded on, on behalf of the claimant.
13. At paragraph 20, the tribunal discusses the two sub editor cases to which it was referred:

"In both of these cases there was an element of commitment on the part of the principal to provide a specified amount of work, and a corresponding acceptance on the part of the worker to undertake that work, and it was that element which enabled the Tribunal to find that there was that degree of mutuality of obligation which was necessary to constitute a contract of service of a continuing nature. In the present case, the closest I find to that is that at some point shortly after he began to work for the respondents, the then Features Editor said to the claimant that if he committed to that department he could have as much work as he wished. However, even this very loose arrangement only subsisted until about 1996 when the majority of time worked was on the Saturday Magazine section."

14. Then, at paragraph 21, the tribunal reaches its conclusion:

"Most of the cases in which this issue has arisen result from the discontinuance of the arrangements between the parties, giving rise to claims of unfair dismissal; in this case, the very opposite has occurred and the parties have entered into a contract which is clearly one of employment. This contract provides for the claimant continuing to do the same sort of work which he had done before, but the context is very different, with a set amount of work to be done on specified days of the week, with specified holiday entitlements, which have to be taken with the permission of management."

15. Nothing more by way of reasons is given.

Relevant Law

16. It was common ground between parties that the well known test for employment set out in the Ready Mixed Concrete case applied:

"A contract of service exists if these 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 other provisions of the contract are consistent with its being a contract of service." (per Mackenna J p. 515).

17. Further, so far as the tribunal's obligation to give adequate reasons, reference was made both to the equally well known dicta in the case of Meek v The City of Birmingham District Council [1987] IRLR 250 and to the provisions of rule 30(6) of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004 rightly referred to by Mr Stevenson as, essentially, a codification of the Meek principles. They require:

"(6) Written reasons for a judgment shall include the following information –

(a) the issues which the tribunal or chairman has identified as being relevant to the claim;

(b) if some identified issues were not determined, what those issues were and why they were not determined;

(c) findings of fact relevant to the issues which have been determined;

(d) a concise statement of the applicable law;

(e) how the relevant findings of fact and applicable law have been applied in order to determine the issues; ……."

The Appeal

Submissions for the Claimant:

18. Mr Stevenson submitted that the tribunal had insufficient findings in fact to lead to the conclusion stated. There were findings in fact and conclusions which were potentially contradictory. The findings suggested a regularity of work, the fact that the claimant's wages were paid through the PAYE system was suggestive of employment, the fact that additional work was treated separately and paid gross was indicative of the regular work being employment, the fact that the claimant was paid for holidays was indicative of employment as was the fact that the claimant "committed" in 1990 to Features work. It was not a "loose arrangement" as was suggested by the tribunal.
19. Overall, the tribunal's approach on the facts was to say that since there was a contract of employment in October 2001, nothing before it could constitute employment but that was illogical. The tribunal set out the Ready Mixed Concrete test but did not apply it to the facts of the case. The tribunal had ignored the Prater case yet they heard submissions regarding it and it was relevant.
20. Further, when the tribunal responded to the Barke order it did not appear to have given any consideration to the question of whether or not the answers required the facts to be looked at again, against the Ready Mixed Concrete test. The tribunal had not differentiated between the regular work and additional work carried out by the claimant, despite its different treatment in practice.
21. Overall the judgment was inadequately reasoned, notwithstanding as Mr Stevenson's conceded, that it was written by an experienced Chairman for whom it was out of character to fall into the trap of failing to do so. There should be a remit to a freshly constituted tribunal.

Submissions for the respondents:

22. Mr Lee made various submissions to the effect that on the facts, it could not be shown that the claimant was an employee prior to October 2001; an exercise which included him seeking to rely on documents in respect of which the tribunal has not made findings in fact. Otherwise, he submitted that the tribunal had given its basic reason and did not require to go further. As regards the case of Prater, he sought to distinguish it. He did, however, appear to accept that it had been before the tribunal but the tribunal had not dealt with it.
23. He submitted that if there were a remit it should be to the same tribunal.

Discussion and Decision

24. A number of matters arise on reading the tribunal's reasoning.
25. Firstly, the reference to the system under which the claimant worked for the respondents from 1990 to 1996 as being a "very loose arrangement" is difficult to reconcile with the picture of regularity that is presented by the reference to it being on the basis of the claimant having made a commitment and to his working a regular pattern of regular shifts. I can see that the additional work arrangement could properly be described as "loose" but it was plainly separate from his other work.
26. Then, the tribunal appears to have been heavily influenced by the fact that a contract of employment document was drawn up and signed in October 2001. The tribunal refers to the context of it being very different "with a set amount of work to be done on specified days of the week" as though that is something new, yet the document identifies what it refers to as the "current" arrangements with some precision. The fact that the opportunity is taken in the document to spell out that the respondents are reserving the right to change the claimant's shift arrangements could also, perhaps, be taken to indicate that they considered that they did not have the right to do so under the prior arrangements that had become established between them and the claimant i.e. they had committed to the claimant's prior system of working and considered that it required there to be a fresh contract before it could bring about a change in the established arrangements. Further, the fact that a written contract of employment is entered into is not determinative of the issue of whether or not there was in fact a contract of employment in existence prior thereto. That is a matter of considering the whole facts and circumstances.
27. Next, although the tribunal was evidently not persuaded that the case of Prater supported the claimant's case, it does not explain why it reached that view. Prater was a decision of the Court of Appeal. It involved a teacher engaged by a local authority on a series of individual teaching assignments of varying duration as part of their home tutor service. The Council was under no obligation to offer pupils to the teacher and the teacher was under no obligation to take work if it was offered. However, when working, the teacher regarded herself as committed to the pupil to deliver teaching on an individual basis and the Council had a similar view of the situation; some of the commitments lasted for years and some for a few months. She was not specifically directed by the Council how to do her work though had she failed to carry it out enquiries would have been made. The Court of Appeal considered whether each of those multiple individual contracts could of themselves be regarded as contracts of employment and were satisfied that they could, given that there was mutuality of obligation during each of them and thus the teacher had continuity of employment notwithstanding the breaks in employment between contracts.
28. Whilst not entirely on all fours with the facts of the present case, there was sufficient similarity as between the circumstances in Prater and those in the present case to require the tribunal to consider the Court of Appeal's reasoning and decision in Prater and if it considered that it could be distinguished, explain why. Unfortunately, the judgment is silent on the matter.
29. Finally, there were other factors which pointed to the claimant having been an employee such as the fact that he was paid through the PAYE system for his shifts, that he could not have sent a substitute in his place and that he received holiday pay. Payment of holiday pay to a non-employee seems, in particular, so unusual, that the tribunal required to explain why, notwithstanding that, the claimant was not an employee. Similarly, the tribunal required to explain why the fact that the respondents had drawn a distinction between pay that was due for shift work (paid through the PAYE system) and additional work (paid gross) either did not point to the claimant being an employee or was outweighed by other factors which showed that he was not.
30. In all these circumstances I am satisfied that the appeal is well founded.
31. There plainly requires to be a remit. As regards further procedure, I have considered whether that remit should be to the same tribunal or a freshly constituted one. The circumstances of the tribunal having evidently lost track when writing its judgment and not having recognised, at the time of the Barke order (as it could have done) that its reasoning was not adequate and taking the opportunity to supplement it, I am satisfied that the issue should be put before a freshly constituted tribunal.

Disposal
32. I will, accordingly, pronounce an order upholding the appeal and remitting to a freshly constituted tribunal to determine what was the commencement date of the claimant's employment with the respondents.