Mr M Holmes v H.A. Boulton (Flooring) Ltd: 1401328/2024
EMPLOYMENT TRIBUNALS
Case No 1401328/2024
Between
Mr M HolmesClaimantH.A. Boulton (Flooring) LtdRespondent
Before
Employment Judge YallopMiss Brooke-Ward (instructed by counsel) for claimantMrs Simpson (instructed by counsel) for respondentDate 29 March 2025
REASONS
[1]Michael Holmes was employed by the Respondent, H.A. Boulton (Flooring) Limited, doing screeding work from 2007 to 2012. On 30 November 2012 he was dismissed for gross misconduct. In or around late April 2013 he began undertaking screeding work for the Respondent again. Mr Holmes says he was an employee. The Respondent says he was an independent contractor.[2]In mid-November 2023, the Respondent decided to wind down its activities. Mr Holmes’ last day of work was 29 January 2024. Mr Holmes claims that he was unfairly dismissed and is entitled to receive a redundancy payment, arrears of pay, pay in lieu of notice, his untaken but accrued holiday pay and other payments, including an award in respect of the Respondent’s failure to provide him with a written statement of particulars of employment.[3]The Respondent contests the claim. It says that on 2 February 2024, it gave Mr Holmes his outstanding pay in respect of the work he had done, and as Mr Holmes was not an employee or a worker, he is not entitled to receive any of the other payments.
The hearing
[4]I conducted a Preliminary Hearing on 7 March 2025 to determine the following issues:a. Was the Claimant an employee of the Respondent within the meaning of section 230 of the Employment Rights Act 1996?b. Was the Claimant a worker of the Respondent within the meaning of section 230 of the Employment Rights Act 1996?[5]Mr Holmes and Nigel Lynch (Company Director of the Respondent) both gave sworn evidence. There were no other witnesses.
Preliminary matters
[6]Before I heard any evidence, I agreed with the parties that I would waive the requirements relating to the bundle set out in the Notice of Preliminary Hearing dated 16 November 2024, and the hearing would proceed using the bundle provided to the Tribunal on 5 March 2025. I noted that there had been correspondence with the Tribunal regarding disclosure after the Tribunal had issued the Notice of Preliminary Hearing, and decided that it was in accordance with the overriding objective to proceed.
Findings of Fact
[7]The relevant facts are as follows. Where I have had to resolve any conflict of evidence, I indicate how I have done so at the material point.[8]The Respondent is a floor screeding contractor, which undertakes both commercial and residential work. Mr Lynch explained, and I accept his explanation, that almost all of the Respondent’s contracts were with construction companies that were undertaking particular projects. The Respondent would tender for screeding work on a project and if successful, would enter into a contract with the construction company to provide the screeding services.[9]Mr Holmes was employed by the Respondent doing screeding work from 2007 to 2012. Initially, his role was as a screeding labourer, but he was subsequently promoted to the role of screeder. Neither party has been able to produce a copy of Mr Holmes’ contract of employment during that period. Mr Holmes said that he does not remember signing one. However, he confirmed in his oral evidence that it is likely he would have done, and that the terms under which he worked during that period were reflected by the blank contract in the bundle. He agreed that his terms of employment included a 39-hour week, overtime pay for work on Saturdays and Sundays, 28 days’ paid holiday a year, sick pay, and the free provision of tools and equipment. With regard to Mr Holmes’ pay during this period, the Respondent said that he was paid an hourly rate. Mr Holmes confirmed that that was the case, but that the rate changed depending on the job.[10]Most of Mr Holmes’ work as a screeder required him to have assistance from a labourer/screeding pump operator (SPO). Whilst he was employed by the Respondent, the SPO who worked with Mr Holmes was also an employee of the Respondent and was under the Respondent’s control.[11]On 30 November 2012, Mr Holmes was dismissed for gross misconduct relating to an incident outside work that occurred on the night of 19/20 November 2012. Some months later, he approached the Respondent and asked if he could work for them again. Mr Lynch felt that Mr Holmes had demonstrated remorse for his actions, so he decided to offer Mr Holmes work on a self-employed basis.[12]Mr Holmes conceded that when he returned to work for the Respondent it was agreed that he would be self-employed. However, he said that this was only to be for a trial period of a few months, as he needed to win back the Respondent’s trust and respect again. The parties agree that there was never any written contract governing their relationship during this second period of work, and the Tribunal was not shown any contemporaneous documents evidencing a trial period. In Mr Lynch’s oral evidence, he denied that a trial period was discussed with Mr Holmes. Mr Lynch said that no such period was necessary, as the Respondent was aware of Mr Holmes’ capabilities, and it was only taking him back on a project-by-project basis. I prefer Mr Lynch’s evidence on this point. Mr Holmes did not give evidence as to how the trial period was supposed to come to an end. Had the Respondent told Mr Holmes that he would be self-employed for a short period and would then be employed if all was well, I would have expected to have seen, or at least heard, some sort of evidence that Mr Holmes had questioned his status during the following 10 years that he worked for the Respondent. Mr Holmes was clearly aware throughout that time that the Respondent continued to view him as a self-employed sub-contractor because it was on that basis that Mr Holmes paid tax. I therefore find that no trial period was agreed.[13]The exact date when Mr Holmes started working again for the Respondent is unclear, but it is not disputed by Mr Holmes that the gap between his two periods of work would be sufficient to break any continuity of employment. In the bundle there is a labour allocation record for the week ending 3 May 2013, which shows that Mr Holmes worked for the Respondent on 29 April 2013. The parties agree that Mr Holmes was working again by that date.[14]During his second period of work for the Respondent, what Mr Holmes was paid depended on the job. He would be paid a fixed fee, a day rate, or according to an amount per square metre. He received his pay weekly, based on the work he had done in a particular week, even if the project he was working on was still ongoing.[15]It was agreed between the parties, and is clear from the ‘Sub-contractor Payment Certificates’ in the bundle - which range in date from 17 June 2018 to 29 January 2024 - that the day rate and price per square metre varied substantially between jobs. Mr Lynch gave evidence that the pay for each job was negotiated with Mr Holmes before each project started, although that pay would be influenced by the amount the Respondent had negotiated with the end client. Mr Holmes gave evidence that the Respondent set the rates that he was paid, although the amounts varied depending on the circumstances, for example because of the job’s location. He said that the Respondent calculated the amounts and told him what he would get. He also said that other screeding gangs could negotiate rates with the Respondent as they had bigger teams.[16]I find that the Respondent offered Mr Holmes’ work at a proposed price that took into account the amount the Respondent stood to earn from the job in light of the Respondent’s negotiations with the end client. However, there was then some room for negotiation. In finding this, I take into account that the parties agreed Mr Holmes would sometimes turn down jobs, which would then be given to other screeders. Mr Holmes said that when he turned down a job this was usually because he did not have a big enough team. That included Ready Mix Screed jobs, which he could not do, as he did not have the manpower. He said that he only turned down jobs that he was not capable of doing.[17]The fact that Mr Holmes was able to turn down work suggests that he had some control over whether or not to accept jobs at the price the Respondent offered. If the Respondent offered a price for a job that he was not happy with, I find that he could have discussed this with the Respondent and made a counter-proposal. At that stage, the Respondent could decide whether to negotiate with him further, or to offer the job to other people who did screeding work for the Respondent. Miss Brooke-Ward argued on Mr Holmes’ behalf that if such negotiations had taken place, there would be documentary evidence. However, it is clear from the parties’ evidence, and the contents of the bundle, that most work matters were deal with verbally. I therefore conclude that the lack of written evidence of negotiations does not indicate that none took place.[18]Mr Holmes said that he was assigned work daily, although he was given more notice of long jobs and work that required him to travel a long distance. Mr Lynch agreed that the Respondent tried to provide as much notice as possible, but refutes that Mr Holmes was assigned work. I find that the Respondent gave Mr Holmes some notice of work, although for smaller jobs the notice might be short. However, as I have already noted, Mr Holmes was not assigned work but was offered it and had the option to turn it down.[19]Mr Lynch gave evidence that where a job Mr Holmes had been given was aborted through no fault of his own (for example, because the site was not ready for the screeding work to be done), the Respondent would do their best to pay Mr Holmes. However, that could not always be guaranteed, and would depend on the circumstances, including what the Respondent was able to recover from the end client. I accept this evidence. The payment records in the bundle evidence that Mr Holmes was paid in respect of particular aborted days, and I found Mr Lynch to be a more reliable witness than Mr Holmes in relation to the way that pay was dealt with between the parties.[20]It was agreed that if Mr Holmes worked overnight, he would be paid more. Mr Holmes said this constituted overtime. Mr Lynch said that if the client wanted work to be done overnight, the Respondent would negotiate a night shift rate with the end client and with Mr Holmes, meaning he would be paid more if he agreed to do a night shift. I accept Mr Lynch’s explanation, which is consistent with the findings I have made about the way in which Mr Holmes was paid.[21]Once Mr Holmes had been given a job by the Respondent, Mr Holmes had flexibility about how he did that job. He explained that if he took on a job that was remunerated based on metres squared, the more quickly he worked, the more he would get paid because he would be available earlier to take on other work. He might therefore work longer hours and take shorter breaks. He also agreed that he could work shorter hours, but said that if he left a site early he needed to let the Respondent know and explain the reason, in case the end client questioned his absence. In relation to longer jobs, he said that the Respondent would give him a quota of what he should achieve on each day, but that was not always the case. However, he agreed that provided a job was completed on time, the Respondent did not have any issue with how Mr Holmes organised his day, including the length of his breaks.[22]Mr Holmes was not told by the Respondent which tools to use to do a job, but he gave evidence that he did receive supervision from the Respondent on some jobs. When asked whether that was a reflection of the need to comply with the end client’s needs, he agreed that it was. Mr Lynch explained that Wayne Crotty, the Respondent’s Contracts Manager, was the screeders’ point of contact at the Respondent if there was a problem with a job, and if there was a problem with a screeder’s work the end client would contact Mr Crotty. In the event that a client complained about a job and it turned out Mr Holmes had made an error, Mr Holmes accepted that he would have had to go back and fix it, in contrast with the position in his initial period of employment where the Respondent bore the financial cost to rectify errors.[23]The Respondent held insurance in respect of the work being carried out by Mr Holmes. Mr Lynch gave evidence that this applied to all of the screeders who worked for the Respondent, including the limited companies who had their own policies, as the Respondent wanted to ensure the insurance was adequate.[24]Mr Lynch confirmed that when Mr Holmes attended a job for the Respondent, he was required to complete a health and safety form and provide it to Mr Crotty. The form set out the method statement and risk assessments that had been approved by the end client and set out how the job would be done. The Respondent also had an external health and safety consultant who would do site checks and report to the Respondent whether those health and safety requirements were being met. The parties agree that drug testing was also sometimes carried out. Mr Lynch confirmed that it had become common practice on bigger sites to conduct random testing and that people within the industry were aware more from being told about it verbally than anything else. He said that if a drugs or alcohol test was requested and the person refused, they would be told to leave. If someone tested positive, they would be banned from the site.[25]Mr Lynch gave evidence that Mr Holmes did not have to work exclusively for the Respondent and the Respondent did not have to provide Mr Lynch with work. He referenced a text message conversation from October 2023, which is at page 207 of the bundle, in which Mr Lynch had said the following: ‘…We had a job for Wed which has been cancelled. So right now no work for the rest of this week. Find work elsewhere if you can. Possibly works next week, Wayne will know more tomorrow.’ Mr Holmes then replied: ‘..No problem will speak later’. When asked about this message, Mr Holmes accepted that the message showed the Respondent did not have to offer him work and that there was no requirement for him to work exclusively. He confirmed that when he did not do work for the Respondent, he was not paid.[26]When Mr Holmes accepted a job, it was up to him to find an SPO and agree with that SPO how much they would be paid. The Respondent would pay the SPO directly, but only after Mr Holmes told the Respondent how much the SPO should receive, as the amounts varied.[27]The Respondent paid some of Mr Holmes’ travel expenses. Mr Holmes agreed in his evidence that he would pay for the fuel in his van and for his van insurance, and that he would not get paid separately for travel time. However, the parties agree that the Respondent did pay any parking costs and congestion charges Mr Holmes incurred whilst working for the Respondent.[28]There was a dispute between the parties regarding who provided Mr Holmes’ tools and equipment. Mr Lynch said that for safety reasons screeders were provided with some of the personal protective equipment (PPE) they needed, including dust masks, safety glasses and high viz jackets, but that other items such as boots, knee pads and hard hats had to be provided by the screeder themselves, or purchased from the Respondent. Mr Holmes said that the Respondent covered the cost of most of the tools and equipment he needed for his work, but that he paid for items personally from time to time. When asked about when he would pay and when he would not, he said especially in the beginning he had paid, and that he did not know why it varied. When he was asked to look at specific instances when deductions had been made, he suggested they were one-offs when he did not look after equipment, like when he lost a knee pad and had to replace it. Mr Holmes gave similar evidence in relation to the maintenance of his tools. He agreed that he had paid for a laser to be recalibrated once or twice, but said that the Respondent had paid the other times. He said he did not know why he paid on some occasions, but not on others.[29]The payment records in the bundle show that in 2018 Mr Holmes had £50 deducted from his pay for a straight edge and £40 for knee pads. In 2023, they show that £45 was deducted for knee pads, £25 for a trowel, £40 for floats and £50 for a 2M edge. The records in the bundle are not all of the records that the Respondent holds because of the restriction placed by the Tribunal on the bundle’s size; they were selected by the Respondent to evidence points that the Respondent wanted to make. It was therefore argued on behalf of Mr Holmes that the records provide a skewed view. However, even though the records have been selected by the Respondent, they show multiple deductions from Mr Holmes’ pay, including in the final year of his work. I was unconvinced by Mr Holmes’ evidence that he paid sometimes and not others but did not know why, and I prefer the evidence of the Respondent. I therefore find that the deductions were not made on a one-off basis, and they did not only occur towards the beginning of his second period of work, as is evidenced by the payment records in the bundle. I find that Mr Holmes was responsible for paying for his tools and for maintaining them.[30]When he attended a site, Mr Holmes was required to wear a high viz jacket that bore the Respondent’s branding. Mr Lynch gave evidence that the reason for this was that the construction company who was responsible for the overall delivery of the project would have multiple trades on site at any one time. For health and safety reasons, they needed to be able to identify immediately which people on site were linked with which contract. Mr Holmes confirmed in his oral evidence that it is common in the industry for subcontractors to wear high viz clothing that identifies for whom they are working.[31]The parties agreed that Mr Holmes worked for the Respondent regularly. There is also evidence of this in the bundle in the form of a table prepared by the Respondent setting out the dates on which Mr Holmes did not work. When asked about the information in the table, Mr Holmes confirmed that those days off would have included holiday and sick days, and that the number of days he did not work were well in excess of the number of days he used to be off when he first worked for the Respondent as an employee. He also confirmed that it was up to him how he would spend the days he was not working.[32]Mr Holmes gave evidence that he was allowed to take holidays but had to give two weeks’ notice. Mr Lynch gave evidence that the Respondent asked screeders to give them advance notice of when they would be unavailable to enable the Respondent to plan its work, but these indications were voluntary. Having found that Mr Holmes was under no obligation to accept work, it follows that he did not have to give notice to take holiday. This is supported by Mr Holmes’ oral evidence, where he agreed that he was never told he could not take holiday unless it would jeopardise a job he had already agreed to do. Mr Lynch also confirmed in his oral evidence that once Mr Holmes had agreed to do a job, the Respondent would have taken issue with it if Mr Holmes had then taken a day off that jeopardised that job.[33]The Respondent provided Mr Holmes with training at the Respondent’s expense. Mr Lynch confirmed that this was done because it enabled the Respondent to bid for more work, it increased the likelihood that bids would be successful, and it provided assurance that the work would be carried out to a high standard.[34]In 2014, Mr Holmes purchased a branded vehicle from the Respondent, which then became his and for which he became entirely responsible. There was a factual dispute, however, as to whether the Respondent insisted that the branding had to remain on the van. Mr Holmes said that he was persuaded to buy the van because the Respondent wanted him to look more professional, and that he had to keep the branding on the van after he had bought it, as then he was guaranteed more work. Mr Lynch said that that was not true; there was no requirement for the branding to remain on the van once Mr Holmes owned it. He explained that the Respondent had sold the van to Mr Holmes on the basis that he would repay the cost at a rate of £100 per week from his earnings. The Respondent retained control of the vehicle whilst the repayments were made, and then signed it over to Mr Holmes. My Lynch said the Respondent was willing to do this as Mr Holmes worked for them regularly and earned enough to repay the cost of the van. They had a very good working relationship, and the Respondent had no reason to believe that would not continue. I find that Mr Holmes was not required to keep the branding on the van. Once he owned it, he was clearly free to remove the branding if he chose to do so. The only action the Respondent could have taken would have been to stop giving him work, or to have given him less work. However, the Respondent had given him work in 2013 before he drove a branded van and there is no evidence corroborating Mr Holmes’ assertion that they would have given him less work had he removed the branding from the vehicle he bought in 2014.[35]The parties disagreed on whether Mr Holmes had to provide personal service. Mr Lynch said that if any substitute was qualified to undertake the work Mr Holmes had agreed to do, the Respondent would have been fine with that. However, he accepted that substitution had never occurred in practice. Mr Holmes gave evidence that he had to undertake the work personally, although when questioned he accepted that he had never been told that he could not send a substitute. I find that the basis of the agreement between the parties was that Mr Holmes would do the work himself. Mr Holmes and the Respondent had previously been in an employment relationship in which Mr Holmes was expected to do work personally for the Respondent. If when the Respondent started giving him work again, it had intended that Mr Holmes could substitute himself with someone equally qualified to do a particular job, that needed to be agreed explicitly. There is no documentation that suggests Mr Holmes was able to substitute himself and I accept his evidence that he was not told he could, which is consistent with the fact that no substitution ever occurred.[36]Throughout his second period working for the Respondent, Mr Holmes received a statement at the end of each month regarding his pay and deductions. He was paid under the Construction Industry Scheme and the Respondent deducted a fixed 20% from his pay. Mr Holmes registered with HMRC as a self-employed person and competed tax returns on that basis. During the coronavirus pandemic, he claimed self-employment income support grants.[37]In mid-November 2023, the Respondent decided to wind down its activities. The Respondent did not follow a redundancy process in respect of Mr Holmes, although it did in respect of those it considered to be its employees.[38]Mr Holmes' last day of work for the Respondent was 29 January 2024. Relevant law and conclusions[39]Section 230 Employment Rights Act 1996 states as follows:(1) In this Act “employee” means an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment.(2) In this Act “contract of employment” means a contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing.(3) In this Act “worker” (except in the phrases “shop worker” and “betting worker”) means an individual who has entered into or works under (or, where the employment has ceased, worked under)— (a) a contract of employment, or (b) any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual; and any reference to a worker’s contract shall be construed accordingly.[40]In Ready Mixed Concrete (SE) Ltd v Minister of Pensions and National Insurance [1968] 1 All ER 433, MacKenna J said: ‘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.’[41]This test entails:a. a requirement of personal service and mutuality of obligationb. the exercise of control over the individual’s performance (which may allow for autonomy on a day-to-day basis, provided the employer retains ultimate control); andc. whether other provisions of the contract are consistent with it being a contract of service. This may include financial considerations, such as taxation of earnings; the extent of the individual’s integration into the organisational structure; and the label attached by the parties to the contractual arrangements that govern their work relationship.[42]A tribunal should not adopt a mechanistic ‘tick-box’ approach to these matters. Instead, a tribunal should seek to paint a picture from the accumulation of detail and then stand back to make an informed, considered, qualitative assessment (Hall (Inspector of Taxes) v Lorimer 1994 ICR 218, CA).[43]In Richards v Waterfield Homes Ltd and another [2022] EAT 148, the EAT ruled that even where the worker had required to be paid under the Construction Industry Scheme, which applies only to the self-employed with associated tax benefits, a contract of employment could nonetheless be inferred from all the circumstances of the case.[44]With regard to worker status, a worker contract has three elements:(i) a contract whereby an individual undertakes to perform work or services for the other party;(ii) an undertaking to do the work or perform the services personally; and(iii) a requirement that the other party to the contract is not a client or customer of any profession or business undertaking carried on by the individual. In applying the statutory language, it is necessary to view the facts realistically and to keep in mind the purpose of the legislation, which is to provide protection for vulnerable individuals who are in a subordinate and dependent position in relation to a party who exercises control over their work (Uber BV & Ors v Aslam & Ors [2021] UKSC 5).[45]In Bates van Winkelhof v Clyde and Co LLP and anor (Public Concern at Work intervening) 2014 ICR 730, SC, Lady Hale drew a distinction between self-employed people who carry on a profession or a business undertaking on their own account and enter into contracts with clients or customers to provide work or services for them (who are neither workers nor employees), and selfemployed people who provide their services as part of a profession or business undertaking carried on by someone else (who are limb (b) workers under the Employment Rights Act 1996).[46]Applying the law to the facts, I have considered the following factors relating to Mr Homles’ employment status: a) Mr Holmes was required to provide personal service. b) In relation to mutuality of obligation, the Respondent did not have to offer work and Mr Holmes did not have to accept the work that was offered. Mr Holmes had an unfettered right to turn jobs down. However, it is clear that each time the Respondent offered Mr Holmes a particular job and Mr Holmes accepted it, an individual contract arose whereby Mr Holmes agreed to perform particular work personally and the Respondent agreed to pay him a fee. c) Mr Holmes did not have a contractual relationship with the end client. He provided his services as part of the Respondent’s business. d) Mr Holmes had flexibility about how he completed a job within the parameters agreed by the Respondent with the end client, so Mr Holmes would decide how many hours he would work, when he would take breaks and when he would leave the site. The Respondent did exercise some control in the sense that it ensured Mr Holmes complied with the health and safety requirements and specifications that the Respondent had agreed with the end client, but the Respondent did not supervise Mr Holmes’ work or have ultimate control over how he completed it. e) Both parties agreed at the outset that Mr Holmes would be self-employed and he completed his tax returns and paid tax on the basis that he was self-employed throughout the second period that he worked for the Respondent. f) Mr Holmes was in some ways integrated into the Respondent’s organisation. The Respondent provided him with training, asked him to indicate when he would not be available to accept work, offered him work regularly, paid his parking and congestion changes, and made arrangements to comply with what they considered to be their health and safety obligations in respect of him, including requiring him to wear a branded high viz jacket, providing him with PPE, and arranging insurance relating to his work. g) However, in other ways he was treated as external to the Respondent, as he was able to negotiate what he was paid, he was required to hire his own SPO, he had financial responsibility for any errors he might make, he was able to profit financially from sound time-management when performing his work, he was required to provide his own tools, he could cease working for the Respondent at any time once a project was completed, he was not required to work exclusively for the Respondent and he did not receive any employment-related pay or benefits, such as holiday pay, sick pay or a pension.[47]Taking all of these factors into account, I find that Mr Holmes is not an employee, as there was no mutuality of obligation between Mr Holmes and the Respondent. However, Mr Holmes did provide personal service as part of the Respondent’s business to an end client with whom the Respondent had a contractual relationship and the Respondent exercised some element of control over his work. I therefore find that Mr Holmes was a worker. Approved by: Employment Judge Yallop 29 March 2025 Judgment sent to parties on: 22 April 2025 By Mr J McCormick Notes All judgments (apart from judgments under Rule 51) and any written reasons for the judgments are published, in full, online at https://www.gov.uk/employment-tribunal-decisions shortly after a copy has been sent to the claimants and respondents. If a Tribunal hearing has been recorded, you may request a transcript of the recording. Unless there are exceptional circumstances, you will have to pay for it. If a transcript is produced it will not include any oral judgment or reasons given at the hearing. The transcript will not be checked, approved or verified by a judge. There is more information in the joint Presidential Practice Direction on the Recording and Transcription of Hearings and accompanying Guidance, which can be found here: www.judiciary.uk/guidance-and-resources/employment-rules-and-legislation-practice-directions/