“2. The Company shall endeavour to supply such Staff as the Client may require to work under the Client’s direction and control. 3. The Company shall act as an employment business in respect of this Agreement and may engage the Staff either under contracts of service or contracts for services. The Company shall supply to the Client the names of the Staff and shall pay all fees due to the Staff under their contracts for services to the Staff …. 14. The Client shall provide a minimum of 48 hours’ work per full week (or pro rata) for each of the Staff. … 15. The Client hereby confirms its intention to hire any Staff that are hired for at least three months, save where it has indicated the contrary to the Company. ... 26. The Client shall be responsible for providing to the Staff day-to-day instructions relating to the services required and accordingly the Client agrees to be responsible for acts, errors and omissions of the Staff at all such times as if the Staff were engaged directly by the Client. …”
“The Consistent Group only offers self-employed contracts to its staff. What this means is as follows: 1. You can work for anyone else as well as working for Consistent. 2. You can refuse to do the work offered for any reason; however, you are obliged to tell one of Consistent’s supervisors if you wish to do so and you will not be paid for any time not spent working. 3. You may send a substitute to work in your place, provided that he is suitable for the position. His work is then your responsibility and, unless you have notified Consistent to the contrary, Consistent will pay you and you will be responsible for paying him. … 4. Unless you have already refused to the work offered, you must send a substitute to do your work if you do not do it yourself. 5. You will not have any of the rights that an employed person normally has in law not to be unfairly dismissed. 6. Consistent is not obliged to pay you the national minimum wage; however, it does pay the equivalent adjusted for your accommodation and/or meals. … [paragraph 6 then set out how the pay was calculated].”
“3.20 Ms Bachorska wanted to work many hours. But sometimes she wanted time off. When she asked for it, it was refused. In practice, she had to work when required.”
“13. … The concept of employee is narrower, although both concepts require that there must be some obligation to perform services personally. The absence of any such obligation will mean that the status is not that of worker or employee.”
“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. … Freedom to do a job either by one’s own hands or by another’s is inconsistent with a contract of service, though a limited and occasional power of delegation may not be.”
“3.12 It is to be noted that the circumstances enabling the substitution to take place arose solely when the claimant could not do the work personally: not merely because she did not want to do it or chose for whatever reason not to. And there was an obligation to provide a replacement (‘shall ensure’). Thus work must be done by the claimant and if she could not do it, she must provide a substitute: so the contract provided. Further, I learnt, any substitute had to undergo a health check, as befitted those working in the food processing industry. 3.13 But again, the documents are ambiguous. … [The supplemental document] … provided, unconditionally, at paragraph 2:- ‘You can refuse to do the work offered for any reason’. This is far more generous than ‘there can only be a substitution if you cannot do the work’. [The ET then referred to paragraph 3 of the supplemental document and, after observing that that document was not a contractual document, continued] ‘It does not cover quite the same ground as the contractual terms under ‘Substitution’ It does not specify the circumstance (that the claimant cannot do the work) which in the contract triggers the right to send a substitute ….” (Emphasis added)
“5.1 The contract … does not unambiguously reflect the actual relationship between [Consistent] and the claimants. It purports to be a contract for services. It seeks expressly to avoid the relationship of employer and employee that would be created by a contract of service. But if a contract is to remove from a person the rights the law normally gives for his protection, the terms in which the denial is expressed must be clear. It appears above that this contract is self-contradictory as to the claimants’ obligation to work. Thus the provisions in the contract as to that obligation do not with unambiguous clarity serve to release the claimants from it. I had to decide from all the circumstances whether the claimants were in fact bound by contract to work to [Consistent’s] order. The assurance that they did not have to formed no part of any agreement between them. 5.2 The further attempts in the contract to make it appear not to be a contract of service are insufficient to gain that end. Its provision as to whether there may be substitution is restrictive. Substitution is only permitted where the claimant ‘cannot’ do the work personally: otherwise there is an obligation to do it. … What is involved in the words used here is, in the words of McKenna J in Ready Mixed Concrete, ‘a limited or occasional power of delegation’. Even where she cannot do the work, the claimant must warrant the substitute’s competence. Otherwise, presumably, there will be no substitution, only perhaps a sickness absence. The provisions as to substitution here were not inconsistent with a contract of employment.”
“5.4 (1) Since I could not rely on the purported contract alone to reflect accurately the real relationship between [Consistent] and the claimants, I strove to infer from all the material before me what were the terms of the agreement (there certainly was an agreement) between them. (2) Ambiguities and contradictions in documents I resolved against the party relying on the document for their advantage – in this case [Consistent and WCF]. (3) I found that if there were a strong or established practice, it suggested an agreed term: the parties acted according to what they believed their rights and obligations in practice were. (4) Thus, I noted that [Consistent] told the claimants what to do and where to go; and they provided transport to get to work. (5) I noted that [Consistent] in one part of their purported contract placed an obligation on the claimants to work as required. (6) I noted further [Consistent’s] insistence that at least for the first three months of any claimant’s employment, ‘any staff introduced by us shall remain employed by us and may not work at your hotel through any other medium (e.g. self-employed …)’. (7) [Consistent] may not claim the advantage of being employers in their relations with [WCF], and also claim the advantages inherent in the claimants’ being self-employed when the obligations of an employer seem too onerous. (8) They saw themselves as employers of the claimants. (9) The picture that I saw was of the claimants going to work at [WCF’s] factory when they were told to and having no practical alternative – that is, no more alternative than an employee ever has to stay away from work: this was their job; they did it when they were told to because [Consistent] told them to do it.”
“5.5 In their agreement with [WCF], [Consistent] secured a minimum of 48 hours’ work a week for the claimants and, subject to a proviso, a minimum period of 3 months’ employment. In deciding what [Consistent] saw as their obligations, I bore this in mind. It seemed difficult for them to deny an obligation to provide work, and yet make these two stipulations. If in making the agreement with the claimants [Consistent] had openly revealed having secured these terms, it would have gone without saying that they had to provide the benefit of the terms to the claimants: an implied obligation to provide work. Again, they may not seek one advantage from [WCF] but not carry its import through for the benefit of the claimants. They behaved as though they regarded themselves as the claimants’ employers. 5.6 I decided that the claimants were obliged to work as required by [Consistent]. They were not allowed to decide whether to work: indeed, if it did not suit [Consistent], they were refused a day off. I decided further than the claimants’ obligation was to do the work personally subject to a limited and constrained ability to delegate. 5.7 I decided further that there was an implied obligation on [Consistent] to provide them with work. [Consistent] could not properly have included the provisions as to working week and period of employment in their agreement with [WCF] without having such an obligation.”
“5.8 The only way in which [Consistent] might escape the finding that they were not [sic: the ‘not’ appears to be wrong] obliged to provide the work was in reliance on the purported contract. I asked myself what was its purpose. At almost every turn, the documents provide for the evasion by [Consistent] of the obligations put by law upon employers for the protection of employees. There is a contradictory, inconsistently-worded attempt to achieve the appearance that the claimants’ work is voluntary; similarly that there is a liberal right to delegate. They are told that they do not have the right not to be unfairly dismissed, or to be paid the National Minimum Wage. The reason why the documents sometimes speak with a forked tongue is that in fact [Consistent] wanted to keep a fairly tight control over the claimants. They were given accommodation (and made to pay for it and put in peril of eviction, at a moment’s notice as it turns out). They were given transport to work at [WCF’s] factory. They were told when and where to work. Here was an arrangement seen to be entirely for the advantage of [Consistent]. They wanted to compete in their business without the encumbrance of employees with rights, and yet to kept a tight enough hold on them to assure their ability to provide enough labour for [WCF].”
“26. I do, however, have some concerns about the failure by the Chairman to indicate why he was preferring Ms Bachorska’s evidence over that given by the witnesses for [Consistent]. Indeed, it is not clear from the decision that the evidence he accepted was disputed at all. It would have been desirable if at least a brief indication had been given as to why he had assessed the evidence in that way, but there is no explanation.”
“55. There is a difference between a sham and a variation. Where the court finds that the contract or certain terms within it are a sham it is making a finding that they never did reflect what the parties true intentions were. Where there is a variation, the agreement as originally entered into is valid and properly reflects the intentions of the parties but subsequent words or conduct create new rights and obligations which may even contradict the original terms. 56. The possibility that the express terms may be dismissed as a sham was recognised by Peter Gibson LJ in Express and Echo v. Tanton[1999] ICR 693 . That was a case which concerned whether there was an obligation personally to perform the work. The Court of Appeal emphasised that the answer to that question had to be determined by asking what legal obligations bind the parties rather than by focusing on how the contract was actually carried out. So in that case the fact that in practice the individual had always personally carried out the work would not demonstrate that there was a contractual obligation to do so, and the Employment Tribunal decision was overturned for wrongly drawing such an inference. 57. The concern to which tribunals must be alive is that armies of lawyers will simply place substitution clauses, or clauses denying any obligation to accept or provide work in employment contracts, as a matter of form, even where such terms do not begin to reflect the real relationship. Peter Gibson LJ was alive to the problem. He said this (p 697): ‘Of course, it is important that the industrial tribunal should be alert in this area of the law to look at the reality of any obligations. If the obligation is a sham, it will want to say so.” 58. In other words, if the reality of the situation is that no-one seriously expects that a worker will seek to provide a substitute, or refuse the work offered, the fact that the contract expressly provides for these unrealistic possibilities will not alter the true nature of the relationship. But if these clauses genuinely reflect what might realistically be expected to occur, the fact that the rights conferred have not in fact been exercised will not render the right meaningless. 59. Applying this principle here, in my judgment the Tribunal was entitled to say that this was a situation where there was no realistic possibility that these claimants, as heavily dependent as they were on the economic power of the agency, would be free to accept work as and when offered, nor to work for someone else whilst the contract they had signed remained in place. They had come from Poland expecting to work for the agency, their continued accommodation depended on doing such work, and there was no realistic chance of their working elsewhere, at least whilst the agency needed their services. On these matters the formal document bore no relationship to reality. Tribunals should take a sensible and robust view of these matters in order to prevent form undermining substance, and this is precisely what this Chairman did. I detect no error of law. 60. In my view, therefore, there is a mutuality of obligation between the parties which continues even when the worker is not working pursuant to a pre-agreed work stint. Furthermore, the nature of these obligations is plainly located in the field of work. It has not been, and could not sensibly be, suggested that these claimants are providing these services in the course carrying on a business or profession. There can be no real doubt that the provision of personal services is the essential feature of the contract. 61. It follows in my judgment that these claimants are workers for the periods they actually worked (which would bring them within the Minimum Wage legislation); and that status will continue in the gaps between work if the above analysis is correct.” ‘Of course, it is important that the industrial tribunal should be alert in this area of the law to look at the reality of any obligations. If the obligation is a sham, it will want to say so.”
“19. It follows that, if the appellate process is to work satisfactorily, the judgment must enable the appellate court to understand why the judge reached his decision. This does not mean that every factor which weighed with the judge in his appraisal of the evidence has to be identified and explained. But the issues the resolution of which were vital to the judge’s conclusion should be identified and the manner in which he resolved them explained. It is not possible to provide a template for this process. It need not involve a lengthy judgment. It does require the judge to identify and record those matters which were critical to his decision. If the critical issue was one of fact, it may be enough to say that one witness was preferred to another because the one manifestly had a clearer recollection of the material facts or the other gave answers which demonstrated that his recollections could not be relied upon.”
Showing the 50 most senior of 77.