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	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Samrai v United Co-Operative Ltd [2007] UKEAT 0174_07_1307 (13 July 2007) URL: http://www.bailii.org/uk/cases/UKEAT/2007/0174_07_1307.html Cite as: [2007] UKEAT 0174_07_1307, [2007] UKEAT 174_7_1307

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APPEARANCES

 

For the Appellant	MR D MAXWELL (of Counsel) Instructed by: Messrs HBJ Gateley Wareing LLP Solicitors One Eleven Edmund Street Birmingham B3 2HJ
For the Respondent	MR S GORTON (of Counsel) Instructed by: Co-operative Employers Association Human Resources Department PO Box 53 New Century House Manchester M60 4ES


 


SUMMARY

CONTRACT OF EMPLOYMENT

Definition of employee

Whether locum pharmacist managing a branch was or was not an employee.


 


HIS HONOUR JUDGE PETER CLARK

1. This case has been proceeding in the Birmingham Employment Tribunal. The parties are Mr Samrai, Claimant, and United Co-operative Limited, Respondent. The Claimant complained of unfair dismissal. A preliminary issue was listed before a Chairman, Mr Dimbylow, sitting alone at a pre-hearing review, namely, whether the Claimant was an employee for the purpose of giving him one year's continuous employment during the year preceding the termination of his engagement (to use a neutral word) in November 2005.
2. By a judgment with reasons dated 26 September 2006 the Chairman found that the Claimant was not an employee during the relevant period. Against that judgment this appeal is brought by the Claimant.

Background

3. The Claimant is a well qualified pharmacist. On 11 September 1999 he commenced work with the Respondent as a locum pharmacist. He managed their branch at Handsworth Wood, Birmingham. On 19 January 2001 the Respondent wrote to him in these terms:

"Dear Raj

Following your discussions with Lyn Stanley prior to her leaving Co-op Healthcare, I now write to confirm that you will be employed by the company as a locum pharmacist at Handsworth Wood Pharmacy at the rate of £19 per hour.

You have undertaken to run the branch as a manager taking responsibility of the administration etcetera four days per week, acting as a tutor for the trainee dispensing technician as well as pre-registration tutor for our Nottingham student who will be joining us in July/August 2001.

Raj, I am pleased that you have given such commitment to Co-op Healthcare Limited and look forward to a long and fruitful partnership."

4. In October 2001 the Claimant accepted the Respondent's terms and conditions of employment set out in a written contract dated 18 September 2001. In March 2002 he decided that he preferred to be self-employed. The Respondent agreed to a change in the arrangements as they were anxious to keep him. The employment contract was terminated and he continued to work at the same branch but on the basis of a higher hourly rate of pay. He was not afforded sick pay, holiday pay or pension scheme membership enjoyed under his written contract of employment, but he had greater flexibility to take holidays over and above the standard employee entitlement granted by the Respondent and he could set off certain expenses against his income for tax purposes. He moved from schedule E to schedule D.
5. The Chairman found (reasons paragraph 9) that he was not obliged to do any minimum amount of work. He could walk away at any time. The Respondent telephoned him periodically and asked him if he would do the work. He did not have to say yes. The Chairman found that he declined, for example, if he wanted to have time off for a holiday but more powerfully if he wanted to, he did not have to state a reason. He did not have to accept work at all. He worked elsewhere at the same time. When he was an employee, his contract of employment expressly excluded working elsewhere without permission from the Respondent.
6. That arrangement continued until 2005 when the Respondent indicated that it wished to have an employed manager at the branch. The Claimant did not seek a return to his former employment contract. When a replacement was found he left and then claimed unfair dismissal.

The Chairman's Decision

7. The Chairman's reasoning is set out at paragraph 10 where he said this:

"Looking at the whole factual picture I find that the canvas shows self-employment. In coming to my judgment I prefer and adopt the submissions of the Respondent. Mr Maxwell made a very powerful and valiant effort to convince me in the other direction and this was a closely run case. I conclude that the Claimant took advantage of his much sought after qualification and his skills as a pharmacist. He cannot be criticised for that. He was able to dictate his terms to the Respondent. It was prepared to accept his request to change status on more than one occasion. I conclude that the term "self-employment" is not simply a label. It was the intention of the parties and particularly so on the part of the Claimant who was aware of and knew the risks that this would entail. It is not just a case of the Respondent avoiding the employment protection legislation. I use an analogy that appears in the case law; the Claimant made his bed of self-employment, now that he has been turned out of that bed, he cannot now complain that he was in fact an employee. Particularly noteworthy is that in his oral evidence the Claimant said to me, "I was self-employed, but they treated me like an employee"."

The Appeal

8. Mr Maxwell puts the appeal on the perversity ground recognising as he must the high hurdle which he faces (see Yeboah v Crofton [2002] IRLR 634). His principal submission is that the Claimant's working history encompassed three periods. During the first period, that is September 1999 to October 2001, he was, asserts Mr Maxwell, an employee of the Respondent. That submission is based on the Respondent's letter of 19 January 2001; the key document as Mr Maxwell submitted below (see Chairman's reasons paragraph 3). That letter reflects, he submits, an obligation on the Claimant to work a four day week.
9. During the second period it is and was common ground the Claimant was an employee under the terms of the written contract of employment. During the third and relevant period for continuity purposes, the Claimant reverted to his former status as a locum pharmacist. That was on the same terms as during the first period when, so the argument runs, he was an employee. Thus he was an employee throughout.
10. Turning to the Chairman's reasoning and in particular the issue of mutuality of obligations, Mr Maxwell argues that the finding at paragraph 9 that there was no obligation on the Claimant to do some minimum amount of work was simply perverse. The Claimant managed the Respondent's branch; he could not do so if he was under no obligation to do any work for the Respondent.
11. Mr Gorton reminds me of the limited circumstances in which the EAT can interfere with an Employment Tribunal decision in an area that is fact sensitive. Weighing the factors pointing towards and away from a contract of service is essentially one of fact for the fact finding Tribunal (see the approach of the House of Lords in Carmichael v National Power Plc [1999] ICR 1226).
12. On the issue of mutuality, he submits first that the finding of fact by the Chairman at paragraph 9 is not one which the Claimant can go behind. Given that finding, the necessary irreducible minimum for a contract of service is not met (see Carmichael and the earlier Court of Appeal authorities there approved). Further, the Chairman plainly had in mind, submits Mr Gorton, the judgment of the Court of Appeal in Massey v Crown Life Insurance Co [1978] ICR 590. At paragraph 10 the Chairman refers to the Claimant making his bed of self-employment. That echoes the words of Lord Denning MR at page 596D in Massey. It will be recalled that Mr Massey was himself a branch manager who chose to alter his status from that of employee to self-employed on the advice of his accountant.

Conclusion

13. I prefer the submissions of Mr Gorton. It seems to me that this is a case very like Massey where the Claimant was on any view employed under a contract of service during the second period, but then at his request chose to adopt self-employed status. There is no suggestion here that the alteration in terms of the Claimant's request was other than genuine; it was not a sham arrangement. The flexibility suited the Claimant. He was not, as the Chairman permissibly found, required to work if he chose not to for any reason or for no reason. I do not accept the proposition that the Claimant was necessarily an employee during the first period simply on the basis of the wording of the letter of 19 January 2001. Again as the House of Lords, particularly Lord Hoffman, made clear in Carmichael it is necessary to look at the overall factual matrix. It was not strictly necessary for the Chairman to decide whether or not the Claimant was an employee during the first period, but as I read paragraph 5 of his reasons he found, on the contrary, that the Claimant was self-employed during that period.
14. This is a case in which I am satisfied that the Chairman was entitled to find that the minimum obligation that the Claimant would work for the Respondent was missing. Plainly there was a contract between the parties during the third period under which the Claimant worked at the Handsworth Wood Pharmacy at an agreed rate of pay, the Respondent agreeing to pay that amount. However, the Chairman found that it was not a contract of service. In my judgment no error of law has been shown in his approach to that critical question. He reached a permissible conclusion on the facts as found.
15. Accordingly, this appeal fails and is dismissed.