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	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Iles v. Ross Newton Recruitment [2000] UKEAT 568_99_1207 (12 July 2000) URL: http://www.bailii.org/uk/cases/UKEAT/2000/568_99_1207.html Cite as: [2000] UKEAT 568_99_1207

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APPEARANCES

 

For the Appellant	MR T LINDEN (of Counsel) Instructed by: Messrs Pattinson & Brewer Solicitors 30 Great James Street London WC1N 3HA
For the Respondent	THE RESPONDENT IS IN PERSON.


 


JUDGE WILCOX:

1. This is an appeal against the decision of the Employment Tribunal sitting in Birmingham on 2 July 1998. Their decision was to dismiss the Appellant's application for redundancy payment and for payment of monies in lieu of notice, on the basis that he was not an employee of the Respondent's. The Respondent's are an employment agency. The work performed by the Appellant was with a customer of that agency and had been so for some three years. The case before us is concerned turns upon a consideration of the approach of the Employment Tribunal in Birmingham as to what was the contract between the Appellant and Respondent and what were its essential terms? They concluded that he was not in fact an employee of the agency.
2. It is evident that the Tribunal in their extended reasons had few original facts to find in a case like this. It is not a case that turns upon disputed issues of fact and close findings of evidence orally given. As we can see from the recitation of material matters that they considered, much of the material before them was documentary. It was the construction of documents in a factual matrix that they had to consider. The Respondent Company employed the Appellant from 19 December 1994 until 19 February 1998. The customer that he worked for was GEC Alsthom Metro Cammell. He was there as a Drawing Office Clerk. He was paid through the Respondent recruitment agency.
3. The contract documentation is contained in two sets of documents. One, which can be, called the 'general engagement' and secondly is the single engagement. The starting point in law is that contained in McMeechan v Secretary of State for Employment [1997] ICR 549 CA. The material part of the judgement is that of Lord Justice Waite is at 562. It comments on the single engagement claim:

"Lord Meston's fundamental submission that no claim to single stint employee status as between the temporary worker and the contractor is maintainable in law has already been stated. I would reject it for the following reasons."

I go to the bottom of page 563 to letter H and the second reason:

(2)"There is nothing inherently repugnant, whether to good relations in the workplace or in law, about a state of affairs under which, in an employment agency case, the status of employee of the agency is allocated to a temporary worker in respect of each assignment actually worked, notwithstanding that the same worker may not be entitled to employee status under his general terms of engagement. In O'Kelly v Trusthouse Forte Plc [1983] I.C.R. 728 the industrial tribunal reached, fortuitously, a decision that both the general and the specific engagement failed to give rise to a contract of service. The important to the case, however, is that the tribunal did give independent consideration to both heads of engagement, and was held to have been right to do so. Indeed it seems to me to be an irresistible inference from the remarks of Sir John Donaldson M.R., at pp.763-764, that the tribunal was regarded as being under a positive duty so to do. Whether or not employee status should, or should not, be so allocated in any particular case will of course need to be resolved as a question of fact according to the particular circumstances of each case."

4. The fourth at (2) is the reason I identified earlier on page 563:

   (3) The force at (2) is not lost in cases, where following what appears to be a common, though potentially confusing practice, the agency and temporary worker have committed themselves to standard terms and conditions, which are intended to apply both to the general engagement and to the individual stints worked under it. The only result of that fusion is the same conditions that would have to be interpreted from a different perspective, according to whether they are being considered in the context of the general arrangement or in the context of a single assignment. That does not make the task of the Tribunal's any easier, and is liable to lead to the unsatisfactory consequence, the same condition may need to be given an additional significance in one context from that accorded to it in the other. Those disadvantages do not, however, supply any valid reason for denying the temporary worker or the contractor the right to have the issue of contractual status judged separately in the two contexts.

5. Later, following that passage Lord Waite J goes on to disapprove of Pertemps v Nixon. Later in the judgment and on different grounds also, he disapproves of Pertemps Group v   Nixon.
6. The Tribunal in the instant case made reference to McMeechan in paragraph 10 of their reasons. It seems that they sought to distinguish it on a question of fact, on the basis that in the instant case there is no separate and specific disciplinary code and also that the agency in McMeechan, had a degree of care and control over the Applicant because he was subject to a disciplinary procedure.
7. That seems to be the only application or reference to McMeechan in the course of the judgment. What is evident to us is that the Tribunal did not follow the approach of Lord Justice Waite in McMeechan. The Tribunal in fact at paragraph 11 in fact apply the Pertemps v Nixon case finding degrees of similarity in relation to it. It seems that in going down that road, that they have not considered the proper criteria and construed the contract between the Appellant and the Respondent, as they should. There are clues to that wrong approach. We look first of all to paragraph 6 of their findings. They set out the terms of the engagement at paragraph 6 (1) (a) and (b). I will cite them as the Tribunal did:

   1a) Subject to the contract the Company will use its best endeavours to offer engagements according to personal preferences, requirements or qualifications;

   1b) The Company reserves the right at its sole discretion whether or not to offer any assignment to the applicant in circumstances where the assignment is suitable for a number of similarly qualified personnel;

8. That is seen to be relied upon as indicating an absence of mutuality. So far as matters of control were concerned, I go to paragraph 10 of the findings:

10. "We have to consider the degree of care and control that the respondent company had over the applicant at any one material time. There is no provision in the contract for any grounds upon which the applicant could be dismissed by the respondent. There is an appendix and the appendix is a standard one which the applicant is agreed to and abiding by when working for what is described as the hirer. That appendix is appendix A attached to page A4 of the bundle and sets out generally between points (a) and (j) of what is "reasonably to be expected" when a person is employed on a temporary basis with the hirer, basically to comply with the reasonable requirements of the hirer's necessary employment terms."

Then the finding that there was no separate and specific disciplinary code or written code of conduct between the Respondent and the Applicant, whereby the Respondent could dismiss for instance the Applicant for his conduct or could dismiss or formally warn for lateness or attendance's. One must go to the wording of appendix 1 and appendix A. Appendix A at page 14 of the bundle before us sets out comprehensively terms and conditions, applicable to any engagement with a client:

APPENDIX 'A'

TERMS AND CONDITIONS APPLICABLE TO ANY ENGAGEMENT WITH A CLIENT

a) "Not to engage in any conduct detrimental to the interests of this Company or the Client.

b) To be present at such times and for the number of hours each week as required by the Client Company that you are assigned to.

c) To give to the Client faithful service of a standard which will ensure the continuation of the contract.

d) To take all reasonable steps to acquaint yourself and comply with any regulations for health and safety laid down by the Client and have regard to the safety of yourself and any other person at the Clients premises.

e) To comply with any disciplinary rules or other work regulations in force at the Clients premises where your services are to be performed to the extent that they are applicable to you.

f) To comply with the reasonable instructions and requests within the scope of the agreed services made upon you either by the Client or this Company.

g) That you are willing to work shifts and unsociable hours as and when required by the client.

h) That you are willing to work 'out of town' as and when required by the Client.

i) That you will not involve yourself in industrial relations matters which are the business of the Client and the Clients employees. Neither will you allow yourself to be represented by any of the Clients employees on any industrial relations matters.

j) That you understand and accept that for any work which you perform as part of this Contract for the Client which in this case is GEC Alsthom Metro Cammell Ltd that Employers Liability and Public Liability Insurance will be provided by the Client and not Ross Newton Associates Limited."

9. At page 12 of the bundle paragraph 2 is of particular importance:

2 a. For the purposes of the various employment statutes you are not, unless otherwise specifically agreed by separate letter an employee of the Company.

2 b Although the Company agrees to offer you reasonable and suitable opportunities to work (according to your qualifications), this contract does not thereby constitute a guarantee of continuing engagement nor of successive engagements.

2 c. You are not therefore entitled either to holidays or holiday pay nor to statutory sick pay under the regulations introduced as from April 6^th 1983.

Those passages are upon very much by the Respondent to this appeal to support the contention that the engagement is on a job to job basis and those provisions show how he was employed or 'engaged' to use a neutral term by the Respondent agent. The difficulty in that submission we find is that the engagement is specifically characterised as a contract for service. This is not something that has in error been fallen into by an unsuspecting employer or contracting party, this is a matter that the agency, the Respondent to this appeal, focused its mind upon and had to, by virtue of the legislation governing their business.

10. The conduct of Employment Agencies and Employment Business Regulations 1976 touched upon these matters. S/I 715/76. The Respondent conceded that part 3 clearly applies in this case and was the reason for the Respondent describing the agreement as one for service. I turn to clause 6 (a) and part 3:

6 (a) (3) "Contract shall on entering into a contract with a worker who is to be supplied to a hirer give the worker a written statement containing full details of the terms and conditions of employment of the worker including little over one. Whether the worker is employed by the contractor under a contract of service, or as self employed worker, that was applied in this case and a description was not as a self-employed worker. The description chosen by the Respondent in this case was that of a contract of service."

But more importantly, paragraph 4 of Appendix 1 of the engagement sets out what is described as a 'specific and fundamental obligation.'

4. "It is a specific and fundamental term of this contract that you be required at all times to abide by the conditions set out in Appendix A (attached) upon engagement with a client."

11. I have made extensive reference to the matters contained in Appendix A. Suffice it at this stage of my observations to say this. They relate to how the employee is to carry out his work, where he is to carry out his work and it is clear that any breach of those conditions is regarded as, or may be regarded as a fundamental breach. Then one comes to paragraph f of Appendix A:

f) To comply with the reasonable instructions and requests within the scope of the agreed services made upon you either by the Client or this Company.

A breach of that could of course give rise to a fundamental breach and lead to a situation where a termination of the engagement is contemplated.

e) To comply with any disciplinary rules or other work regulations in force at the Clients premises where your services are to be performed to the extent that they are applicable to you.

12. It is clear to us that those matters were incorporated into his contract. The Tribunal below should have found construing the terms of the general engagement and the terms of the specific engagement and from the perspective of the specific engagement. We are driven to the conclusion that in this case, the Tribunal below did not apply the proper test. They erred in law. It is clear to us that there are alternative ways in which we could dispose of this case at this stage:

To send it back to the Tribunal below to consider the matters, on the basis of the approach that we have identified.

The other way is for us to put ourselves in the position of the Tribunal below and to come to our own conclusion.

13. An Appeal Tribunal should be very wary of taking this latter course, where there is a question of mixed fact and law. Matters of primary fact are to be adjudicated by those who have the opportunity of seeing and hearing witnesses, as is an often aptly described as by an Industrial Jury. So we are careful not to go down that road unless it is justified. We look to the findings of fact here and we have come to the conclusion that we are in as strong position, as would be the Tribunal below, if it were remitted, to draw inferences from the primary facts  per se, and from the contract.
14. We have decided that it is appropriate in this case to save time and further expense to adjudicate and decide this question for ourselves. I have made extensive reference to Appendix A. I have made reference to the matters that were relied upon by the Respondent as militating against a finding that this was a contract for service. It seems to us, overwhelming, having considered what is contained in Appendix A that those provisions which give and control the "how and when" and the disciplinary matters, are wholly consistent with the status of employee, rather than an independent contractor.
15. In so far as there are parts of the general engagement relied upon by the agency, which would show that the contract does not constitute a guarantee of continuing engagement, or otherwise, seeks to undermine the conclusion, that this is a contract of service, we take the view that those paragraphs to which I earlier made reference, fall within s.203 of the Employment Rights Act 1996. They are provisions on contracting out. This is a balancing exercise. The balance in our judgment comes firmly down in favour of finding that this Appellant was a full time employee of the Agency Company. It is sufficient to say that we have taken into account such matters as there was no provision for holiday pay, and that there were restrictions on industrial representation.
16. We have taken into account all the matters that were rehearsed by the Tribunal below as militating against a finding that this was a contract for service. They did not in our judgment apply the correct test, where it comes to considerations of control, dismissal. We find that their decision in that relation cannot be supported on the evidence. We therefore allow this appeal and we hold that the Appellant was an employee under a contract of service. The Respondent has applied for leave to appeal. We refuse permission, which means that you have got to go to the Court of Appeal.