Appeal No. UKEATS/0049/12/BI
EMPLOYMENT APPEAL TRIBUNAL
52 MELVILLE STREET, EDINBURGH, EH3 7HF
At
the Tribunal
On
17 April 2013
Before
THE HONOURABLE LADY STACEY
(SITTING ALONE)
MR ATHAMALIK MOHAMED THAJUDEEN APPELLANT
(1)
DEESIDE (GUERNSEY) LTD
(2) VROON OFFSHORE
SERVICES LTD RESPONDENTS
JUDGMENT
SUMMARY
CONTRACT OF EMPLOYMENT – Whether established
JURISDICTIONAL POINTS – Agency relationships
Decision made on review - new matter sought to be argued in
written submissions. The Employment Tribunal agreed to review, but did not
deal with the new matter. Held that the ET erred in law. Case remitted back
to the ET to reconsider request for review.
THE
HONOURABLE LADY STACEY
Introduction
1.
This case called as a full hearing before me as an appeal from the
judgment of the Employment Tribunal (ET), Employment Judge Henry sitting alone,
in Aberdeen on a review of an earlier judgment made at a pre-hearing review
(PHR). I apologise for the time taken to produce this judgment. I will refer
to the parties as the Claimant, First Respondent and Second Respondent.
2.
The Claimant wishes to argue a point, said not to be the subject of any
decision thus far, concerning the question of the Claimant being an employee of
the First Respondent and therefore able to argue that he has been unfairly
dismissed under s.103A of the Employment Rights Act 1996 (ERA), while at
the same time being a worker vis-a-vis the Second Respondent, in terms of
s.43K(1)(a) of ERA so that by s.43K(2)(a) for the purposes of Part IVA of ERA,
the Second Respondent was also the Claimant’s employer. I have decided that
this should be argued at first instance and as will be seen that from my
judgment it is for the Claimant to decide whether or not to seek to amend the
existing pleadings.
3.
I have decided that the ET erred in law and that the case should be
remitted to the same ET in order that a decision on the question of what claims
are before the ET, and a decision on those claims, if appropriate, can be
made. In light of my decision, I do not intend to give any view on the
substantive matters aired before me. I am conscious that parties prepared
fully for the argument and addressed me, but I have come to the view that the correct
disposal is to remit and for parties to consider what they wish to put before
the ET.
Background
4.
At the PHR the ET made findings in fact, which are not disputed, to the
following effect. The Claimant is a seafarer, with the rank of Chief Engineer.
The First Respondent is a company incorporated in Guernsey. It provides marine
crews for standby vessels that work in the North Sea for oil and gas
operators. It has a contractual arrangement with a company based in Aberdeen called Deeside Crewing Services Limited which provides support for the First
Respondent’s employees. That company deals with employment contracts on behalf
of the First Respondent. The Second Respondents are a family owned company who
manage the deployment of ships on behalf of the ship’s owners ensuring that
they work profitably and safely. They provide policies and instructions on how
the vessels are to be operated. They have approximately 50 vessels working
in the North Sea.
5.
Further, the ET found that the Claimant had been employed by a company
BUE Cyprus Ltd to work on vessels managed by the Second Respondent in 2004.
That company also had an arrangement with Deeside Crewing Services Ltd to
provide support for their employees. In May 2009 the Claimant advised that he
required extended leave for family reasons. It was granted. At the end of
that month when he was available for work he was told that there were no
vessels available. He registered with other agencies and accepted an offer of
work with a competitor. Deeside Crewing Services Ltd noted that the Claimant
had not worked for them for some months and as was their practice terminated
his contract in February 2010. In March 2010 there was a transfer of the
employment contracts of crews from BUE Cyprus Ltd to the First Respondent. The
First Respondent wrote to existing employees advising of the transfer to take
effect from the 1 April 2010. They wrote to the Claimant having been
told, in error, that he was still an employee. They sent a contract of
employment to him which he returned in March 2010.
6.
The Claimant contacted Deeside Crewing Services Ltd on 10 August
2010 advising them that he was available for work. At that stage that company
discovered that he was not an employee and treated him as a “new start” and he
became an employee of the First Respondent from 21 September 2010.
7.
The Claimant worked on a vessel “VOS Supplier” until March 2011. In
circumstances which I will narrate below, he was removed from the vessel and
shortly thereafter was dismissed by the First Respondent. He submitted an ET1
received on 2 June 2011. He ticked the box claiming unfair dismissal and
stating that he was owed notice pay, holiday pay, arrears of pay and other
payments. He entered the names of both First and Second Respondents in the
part of the form in which he was requested to name his employer or the
organisation that he was claiming against. In the narrative part of the form
he stated that he was employed by the Second Respondent since 2004. He stated
that his employment continued with the same company but that the company had
changed its name and insisted that he sign a contract as and when they changed
the name, and in other circumstances. He stated that he had noticed an oil
leak and various other problems on the ship. He considered, based on his
professional experience, that the leak was serious and would be dangerous to
the public. He said that therefore he reported this to the management and that
they repeatedly requested him to confirm that the leak was “not that serious
and to confirm that there was no leak.” He maintained that the leak was
serious and was dangerous to the public, polluting the sea. He stated that the
company terminated his contract based on the fact of his report that the ship
was not fit for service and that he held that his dismissal was unfair. He
stated that his employer was rather aggressive and threatening when he refused
to accept the request to confirm. He stated “they terminated me on board at
sea on 1 March 2010 and send me to the show (sic) by a boat as a result I
have sustained pain and especially in my neck and hand.”
8.
The First Respondent lodged an ET3 in which it is stated that the Claimant
was employed by it in a contract of employment dated 21 September 2010.
They narrated the Claimant’s previous employment with BUE Cyprus Ltd between
2004 and 2009. They stated that the First Respondent has a contractual
arrangement with the Second Respondent for the supply of crew members. They
stated that the Claimant joined a vessel on 18 February 2011 and was
removed partway through the trip, on 1 March 2011. During the trip the Claimant
made a number of statements to the Second Respondent concerning the vessel.
The Second Respondent regarded the information being provided as questionable.
It is stated that because contradictory information was supplied by the Claimant,
his technical competence came into question. The Second Respondent lost all
faith in the Claimant’s ability to perform to the standard required by a Chief
Engineer. The Second Respondent considered that it was a health and safety
risk to keep the Claimant on the vessel and so removed him from the vessel two
weeks early. The Second Respondent then informed Deeside Crewing Services Ltd
that the Claimant would not be accepted on any of the vessels operated by them
by reason of his incompetence. Deeside Crewing Services Ltd met with the Claimant
to discuss his performance and reported the findings of this meeting to the First
Respondent. The First Respondent decided to terminate the Claimant’s
employment on the grounds of his inability to complete his duties to the
required standard during his probationary period. The Claimant sought a
reconsideration of that decision and the First Respondent decided to confirm
the dismissal.
9.
The First Respondent then goes on in the form to deny that the
statements made by the Claimant constitute a qualifying disclosure in terms of
Part IV A of ERA. If the Claimant did make any qualifying disclosures, the First
Respondent denied that the dismissal was by reason of any disclosure or that he
was otherwise subjected to any detriment in respect of them. The First Respondent
asserted that the Claimant had insufficient continuous service in terms of
section 108 of ERA to raise an unfair dismissal claim. It denied that any
sums in respect of notice or holiday pay or anything else were due.
10.
The Second Respondent lodged an ET 3 stating that the Claimant did not
have a contract of employment, whether express or implied, with the Second Respondent.
They asserted that the Claimant was employed by the First Respondent.
11.
Thus it can be seen that the ET1 and both ET3 forms showed that there
was, on the face of them, a dispute between the Claimant and the Respondents as
to the events which had happened, but more importantly for the purposes of this
case at this stage, as to who the Claimant’s employer was. Therefore a PHR was
fixed to determine two preliminary issues, namely the identity of the true
employer and the start date of the Claimant’s employment.
12.
The Claimant was represented at that hearing by Mr McGuire,
advocate, and both Respondents were represented by Ms Rennie, solicitor.
The decision reached by the ET was that the Claimant’s final period of
employment with the First Respondent began on 21 September 2010 and that
the Claimant’s employer at the date of his dismissal was the First Respondent.
In the reasons given for that decision it is clear that the focus was on the Claimant’s
position that he was employed by the Second Respondent. Counsel invited the ET
to consider the reality of the situation and made submissions based on the
well-known case of Ready Mixed Concrete (South East) Ltd -v- Minister of
Pensions [1968] 2 QB 497. There was some conflict in the evidence
between the Claimant and witnesses called for the Respondents. The solicitor
for the Respondents submitted that the arrangement by which the Claimant was
employed was well known within the industry and was not in any way a sham. She
referred to the case of Tilson -v- Alstom Transport A2
/2009/2611/EATRF. The ET set out its decision with reasons comprising
17 paragraphs. Those reasons discussed the submissions of parties’
representatives and include reference to workers employed by agencies. It is
clear from the last paragraph that the question which the ET dealt with related
to the submissions put by parties to the effect that control was exercised by
the Second Respondent. The ET did not accept that and found that the Claimant
was employed by the First Respondent although working on board a vessel
operated by the Second Respondent.
13.
The solicitors acting for the Claimant wrote to the ET on 9 May 2012
referring to the PHR and stating: –
“The 2 issues that were to be addressed at the PHR were: (a) the
identity of the employer and (b) whether there was continuity of employment.
The decision of the ET was that:
1. The claimant’s final period of employment with the first
respondents began on 21 September 2010.
2. The claimant’s employers were the first respondent at the
date of his dismissal.
3. That the proceedings are dismissed against the second
respondents.
The claimant’s claims are for “normal” unfair dismissal under
s.98 ERA and also unfair dismissal under s.103A ERA. It is clear from the
judgment that the issues relating to the identity of the employer as defined
under s.230 ERA were determined at the PHR.
We submit, however, that the identity of the employer under
43 K (1) (a) and 43 K (2) (a) of the Public Interest Disclosure Act 1998 (PIDA)
was not considered. Submissions were not heard on the extended definition of employer
under PIDA and we understand from counsel that employment judge Henry stated
that if submissions on the point had not been made he could not make a
determination on this.
We therefore apply under regulation 34 (3) (e) of the Employment
Tribunals (Constitution & Rules of Procedure) Regulations 2004 for a review
of employment judge Henry’s judgment in respect of the dismissal of the claim
for unfair dismissal under S 103 A ERA against the second respondents.
We enclose the witness statement of one of the respondent’s
witnesses, Heather Hughes, that was produced for the PHR and refer the tribunal
to paragraph 8. In light of her comments we submit that it is in the interests
of justice for the judgment to be reviewed.” [Emphasis added]
14.
Thus the Claimant’s solicitors sought a review of the decision made at
the PHR on the basis that submissions on the ‘extended definition of the
employer under PIDA’ were not heard. At first sight that seems an odd basis on
which to seek a review. (I should also say witness statement to which
reference was made in paragraph 8 does not on its face deal with protected
disclosures.) The solicitors produced written submissions for the review. In
those submissions they stated, amongst other things, the following: –
“The claimant submits, however, that he falls within the
definition of “worker” under s43 K (1) (a) ERA and VOS [the second respondent]
falls within the extended definition of “employer” under 43K (2)(a) and therefore
VOS should remain as second respondent in respect of the claim that he suffered
a detriment under s47 B ERA.”
The submissions detail an argument concerning the protection
afforded by PIDA.
15.
The Respondent’s solicitors wrote a letter, not produced before me in
which they objected to the review being held. They also lodged written
submissions in response. They objected to the review being held. Having done
so, they asserted that there is no such extended definition as was referred to
by the Claimant’s solicitors, giving details of their arguments in support of
that contention. They then made a variety of arguments concerning the control
test for employment and cases concerning persons employed by agencies. They
stated that the ET had dealt with the matter now argued, not explicitly, but by
implication.
16.
The Claimant’s solicitors lodged further submissions in which they set
out arguments concerning the protection which they argued that their client was
entitled to under the “whistleblowing legislation”. They stated that he should
be permitted to pursue a claim against the Second Respondent under s47B in
addition to the claim under s103A against the First Respondent.
17.
On 15 June 2012 the solicitors for the Respondents
advised the ET that they did not consider an oral hearing to be necessary and
that matters could be dealt with most efficiently and effectively through
consideration of written submissions already submitted together with an updated
submission which they attached. In that updated submission, the solicitors for
the Respondents made arguments relating to the law on protected disclosures.
18.
The review hearing was held in Aberdeen on 4 July 2012. The
decision was that the Claimant’s application for review of the judgment was
granted and following consideration of the written submissions, the ET declined
to vary or provoke the judgment but confirmed its terms. The ET stated: –
“It was with some hesitation that the application for review was
granted by me. The issues surrounding the true identity of the claimant’s
employers were canvassed fully at the hearing that took place in March.
Evidence was led about the situation that pertained and practice around the
engagement of the claimant and other crew.
The primary position taken by counsel for the claimant at the
PHR was that the true employers were the second respondents but that in the
alternative it was the first respondents. On checking my notes it was apparent
that although the definition of the employer in terms of sections 43K and 43k
(sic) of the Act may have been mentioned in passing counsel for the claimant,
quite properly in my view, focused on what might be regarded as the more
general legal tests used to identify an employer/employee relationship. I
indicated, as reflected in the claimant’s solicitor’s letter, that I could not
deal with the submissions that were not made to me. No argument was presented
in relation to the specific terms of the sections or that they would assist in
some way in coming to the correct conclusion. Nevertheless in fairness to the
claimant and given that this is a matter of some considerable importance to him
I allowed the review to proceed in order that this argument to be considered as
I accepted that it was in the interests of justice to do so.”
19.
The judgment then goes on to quote the terms of section 43 K of
ERA. It is noted that these provisions in turn refer to and modify s230 of the
Act. The ET then states that it is not accepted that the ET required to have
regard to the definitions contained in these sections if, following
consideration of the matter, the decision was that the First Respondent were
the true employers applying the legal tests that the ET had been asked to
apply. It is stated that even if the ET had been referred specifically to the
sections they would have had no impact on the decision as the ET was satisfied
that the First Respondent employed the Claimant under a valid contract of
employment. There are then some observations made about agency workers and the
ET comments that the witness statement to which it was referred contained
nothing which would indicate an employment relationship. The judgment ends
with a confirmation of the terms of the original judgment.
20.
It has been necessary to narrate at length the events which led to the
confirmation of the judgment because at the hearing before me it was argued on
behalf of the Respondents that the Claimant was seeking to introduce a new
claim in his application for review. That argument was anticipated by counsel
for the Claimant, who stated that if it was made, the answer to it was that
there was no cross appeal on the allowance of a review. Counsel argued that
the matter she wanted to argue, that is that the Second Respondent should
remain in the case by operation of s43K (1) (a) and (2) (a), was before the ET
at the review. If the Respondent wished to argue that it should not have been
considered, then it should have cross appealed.
21.
While the solicitors for the Respondents did object to there being a
review, in their written submissions they set out their answers to the
submissions made by the Claimant’s solicitors on the new point. Counsel for
the Claimant argued that by doing so the solicitors for the Respondents had
entered into the argument which had been raised on behalf of the Claimant. She
argued that the ET had erred in law in rejecting that argument and in failing
to give proper reasons for that rejection.
22.
The solicitor for the Respondents argued that it was untenable to state
that the Respondents had accepted that a detriment complaint had been pleaded
in the claim form. She said that no claim under s47B is discernible from the
claim form. Any such claim should be the subject of amendment and would be
objected to as time barred. She went on to address me on the substance of the
claim under that section.
Discussion and Decision
23.
The Respondents objected to the review, but provided written arguments
on the basis that review may be allowed despite their objection. Thus the ET
was provided with extensive written submissions by both parties. There was a
procedural problem in that counsel for the Claimant told me that the Claimant’s
solicitors did not receive the Respondents’ updated submissions, but she
accepted that the ET did, and she made nothing of it. The ET agreed to hold a
review, albeit with some hesitation.
24.
The decision to confirm the original decision made at the PHR did not
deal with all of the matters raised in the written submissions. It is
understandable given the context that this happened. It was a review of a
decision taken after evidence in which the Claimant asserted he had been
employed by the Second Respondents and that his employment commenced in 2004.
The ET did not uphold that claim at the PHR and found that he was employed by
the First Respondent between September 2011 and March 2012. The Claimant did
not seek to argue on review that that determination was incorrect. Instead he
sought to argue that as well as being an employee of the First Respondent and
entitled by s.103A of ERA to claim that he had been unfairly dismissed by the First
Respondent, he was also entitled to argue that the Second Respondent was his
employer by virtue of s.43K(2)(a) of ERA. The Respondents’ written submissions
objected to there being a review, but also gave their arguments on the s.43K
point, and as stated above asserted that the point had been dealt with by
implication in the original decision.
25.
I have every sympathy for the ET which was faced with a confusing
situation, but I have decided that the decision does not cover all matters
raised. At review the ET should have been asked to consider firstly whether a
new point was being raised. If there was no new point, but an argument that a
point already raised had been wrongly decided, then argument on that should
have followed. If it was held to be a new point, the ET should have been asked
to consider whether that new point required amendment. If it did, then the ET
should have been asked if it was prepared to allow amendment, in light of the
nature of the claim and any arguments made on time bar. If a decision was
reached that the new point could be considered, the arguments should have been
made and a decision given.
26.
The decision on review does not deal with the points set out above. The
ET states that s.43K was mentioned only in passing at the PHR, and states that
it could not deal with a submission not made. It goes on however to allow
review to take place. The rest of the decision bears to deal with s.43K but it
does not reflect the written arguments put by either party. It does not engage
with the argument that the Claimant made that he had a relationship with both Respondents
at the same time. It does not deal with arguments put by the Respondent in
opposition. Rather it deals with the significance or lack of it that the
section has to the question of who was the employer.
27.
Counsel for the Claimant argued that if I allowed the appeal I should
decide that the decision to dismiss the case against the Second Respondent was
wrong, and that I should reverse that decision. Failing that, I should remit
to a freshly constituted ET. The solicitor for the Respondent argued that I
should refuse the appeal, and failing that, if I found that the reasons given
were inadequate, I should direct the ET to supplement or clarify its reasons
before I determined the appeal, as in the case of Barke v SEETEC Business
Technology Centre [2005] IRLR 633.
28.
I have decided that the appeal must be granted, on the basis that the
decision does not deal with all the matters raised. I can see no reason why it
should not be remitted to the same ET, in order that the application for review
is heard again. It is for the Claimant to consider whether or not to seek
permission to amend as part of the application for review.
