On Line Design and Engineering Ltd, R (on the application of) v Engineering Construction Industry Training Board [2010] EWHC 2776 (Admin)

Case No CO/569/2010[2010] EWHC 2776 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT
Venue Royal Courts of JusticeDate Friday, 22 October 2010
Strand
London WC2A 2LL
B e f o r e:
MR JUSTICE OUSELEY
Between
THE QUEEN ON THE APPLICATION OF ON LINE DESIGN AND ENGINEERING LIMITEDClaimantv
Between
ENGINEERING CONSTRUCTION INDUSTRY TRAINING BOARDDefendant
Computer-Aided Transcript of the Stenograph Notes ofWordWave International LimitedA Merrill Communications Company165 Fleet Street London EC4A 2DYTel No: 020 7404 1400 Fax No: 020 7404 1424(Official Shorthand Writers to the Court)
Mr A Hogarth Qc Appeared for ClaimantMs C Davies Appeared for Defendant
J U D G M E N T
[1]MR JUSTICE OUSELEY: On Line Design and Engineering Limited, the appellant, operates a business with two components both in the field of engineering. It provides an engineering and design service to clients from its own premises. It also operates an employment agency, supplying designers, CAD operators, chartered and project engineers to its clients, at whose premises and under whose daily control the employees of the appellant work. The clients of the agency side of the business include the operators of large oil refineries, off-shore platforms and major gas installations.[2]The Engineering Construction Industry Training Board, the respondent, is a statutory charity charged with raising an annual levy for the purposes of training construction engineers. It is one of two such bodies, the other being the Construction Industry Training Board. Its levy is raised on engineering construction companies, putting it very simply, and the sum levied is calculated by reference to the total emoluments of a company's work force. But the rate of levy varies according to whether an employee is "site" or "off site". The rate is higher for site or on site employees than it is for off site employees.[3]The Board raised the levy on the appellant in the sum of £138,474 for the year 2007 and £137,196 for the year 2008. It treated a substantial proportion of the appellant's employees as site employees and thus applied the higher rate to them. The appellant appealed to the Employment Tribunal under the provisions of the Levy Order raising a wide variety of issues, almost all of which are not now pursued. After a number of case management hearings, concerned amongst other matters with disclosure by the appellant of the details of the work done by its employees and where, the hearing of the appeal took place over 7 days in November 2009, following which the Employment Tribunal Chairman, Employment Judge Manley, produced a careful and thorough judgment. It held that the appellant operated a single business and was a "leviable establishment". It held that the employees based at the appellant's own premises, carrying out design work there, attracted the lower rate of levy as off site employees but that the rest, including all the agency employees, were site employees. It reduced the levy for 2007 to £132,927 and increased the levy for 2008 to £181,675.[4]The appellant appeals from that decision on a point of law, directly from the Employment Tribunal to the High Court by virtue of section 11(1) of the Tribunals and Inquiries Act 1992, such an appeal not being one of those required to go via the EAT to the Court of Appeal. The appellant contends that the Employment Tribunal erred in law in concluding that its agency workers were all site employees. It had adopted an erroneous approach; it should have concluded that they were off site employees. The respondent contends that the Tribunal was correct in its approach, and in any event that the appellant had provided no evidential basis to the Employment Tribunal, as the Employment Tribunal had found, on which it could properly conclude that the agency employees were indeed off site. The statutory provisions[5]The Industrial Training Act 1982 set up the Industry Training Board and created the power, by Levy Order, for the Board to raise a levy, and provided for appeal against the levy to the Employment Tribunal. The basis for the imposition of the levy and for its rate is contained in the then annual Levy Order. The Industrial Training Levy (Engineering Construction Industrial Training Board) Order 2007, SI609, is in the same terms as the 2008 Order, SI535, so far as material. There is a change in the wording of the 2009 Order, SI548, to which I shall come.[6]A levy can only be imposed on a "leviable establishment", which, by Article 3(1)(a) means:
"An establishment engaged during the necessary period wholly or mainly in the Engineering Construction Industry ..."
. It is accepted that the Employment Tribunal was entitled to conclude, as it did, that the appellant was a leviable establishment and a single leviable establishment. I shall return to the meaning of "Employment Construction Industry" in another context.[7]The levy has to be calculated in accordance with Article 4. Article 4.3 provides that the levy is 1.5 per cent of the total emoluments of a site employee and 0.18 per cent of the total emoluments of off site employees of the leviable establishment. Clearly, potentially significant sums may turn on the numbers in each category.[8]Site employees are defined as follows:
"'Site' employee means an employee (...) the activities of whose employment take place wholly or mainly at the site where activities falling under paragraph 1(a) of schedule 1 to the Industrial Training Order are carried on"
. An off site employee is an employee "other than a site employee".[9]Paragraph 1(a) of schedule 1 to the Industrial Training (Engineering Construction Board) Order 1991 SI3005 provides, as far as material:
"1. Subject to the provisions of this Schedule, the activities of the engineering construction industry are the following activities ... (a)the activities of— (i)fabrication, assembly, construction, erection, installation, fitting, testing, inspection, maintenance, repair, replacement or dismantling on site of any chemical, electrical or mechanical apparatus, machinery or plant of a chemical works, gas making or gas treatment works, nuclear or thermal power station, nuclear waste reprocessing site, hydro-electric station, oil refinery or oil terminal or other apparatus, machinery or plant concerned with exploration for or exploitation of oil or gas, metal smelter, steel mill, paper mill or brewery, the processing and production of human and animal food, pharmaceutical, cosmetic and petrochemical products, cement, concrete bricks, distilling alcohol or other products, glass, paper and sewerage or any other installation involving processing of any product; (ii)planning, designing, commissioning or procuring by way of contract or otherwise of any apparatus, machinery or plant mentioned in head (i) above carried on in association with any activity mentioned in that head or in association with any project for such an activity; (iii)supervision of the fabrication, assembly, construction, erection, installation, fitting, testing, inspection, maintenance, repair, replacement or dismantling of any apparatus, machinery or plant mentioned in head (i) above when carried out on site; (iv)the erection and/or dismantling of the main framework of buildings, being framework of steel or other metallic construction, or of other structures consisting wholly or mainly of steel and/or other metal, not being either structures forming part of a building, electric lines or structures designed for the support thereof, walls, fencing, hoardings, exhibition stands, scaffolding or contractors' plant; ..."
The order also contains provisions demarcating the line between engineering construction and non-engineering construction, which has its own training board.[10]I make two observations at this stage. First, on the face of the Order, the fact that an employee is off site and levied at a lower rate, unless he falls into the site category and is levied therefore at a higher rate, would require the Training Board to show why an employee fell into the category on which the higher rate would be levied. However, it is not in dispute that the employer alone knows or has the ready means of ascertaining the nature and location of the employee's work and it is for the employer to provide the evidence to justify not classifying an employee as a site employee.[11]Second, one possible reading of the definition of site employee would mean that someone who carried on paragraph 1(a)(ii) work in planning and design, in an office block remote from any place where physical engineering construction work was actually carried on, was an on site employee; but the Training Board before the Tribunal accepted that the use of the word "site" and the definition of site employee was not intended to cover those who carried out the activity in paragraph 1(a)(ii) of planning and design on a site where none of the activities in paragraph 1(a)(i), (iii) and (iv) were carried on. The Training Board's approach to the statutory interpretation of site employee was accepted by the Employment Tribunal as one which favoured the levy payer. This distinction was enacted in the 2009 Order where, in the definition of site employee, the reference to paragraph 1(a) of schedule 1 to the 1991 Order is now qualified by the addition of "(i), (iii) and (iv)", obviously omitting what might otherwise have been the crucial reference to (ii). The submissions[12]In brief, Mr Hogarth QC, for the appellant, submits that the Employment Tribunal found, or should have found, that most of the appellant's agency employees were undertaking work that fell within paragraph 1(a)(ii). The Tribunal should therefore have also found that they were doing so in the office premises of the appellant's client, that those office premises were not a site where engineering construction activities within 1(a)(i), (iii) or (iv) were carried on, and that it was irrelevant that those office premises might be within or next to a very large industrial installation, such as the oil refineries or gas works of the client, where inevitably some work falling within (a)(i), (iii) and (iv) would always be being carried out, even if only by the client's own employees. The "site" which mattered for the definition of site employee was the area of physical engineering construction activity, colloquially the safety or "hard-hat" area, not the whole of the area of the installation in relation to which the office might be a small part or even separated but contiguous.[13]Mr Dale Martin, for the Training Board, submitted that the appellant had not raised this issue before the Employment Tribunal and could not raise it now. In any event, the Tribunal had found that the appellant had provided insufficient evidence, on the nature of the work done by its agency employees and on the particular location of their work, to enable any conclusion that they were not site employees to be reached. The Employment Tribunal had correctly recognised that office locations remote from the industrial installations would probably not be sites for the purposes of the definition of site employee. It was right to adopt that approach, or alternatively it should have adopted the approach of saying that if the office premises at which the agency staff carried out planning and design work within paragraph 1(a)(ii) were within the area of the installation, broadly judged, they were on a site where inevitably, as the appellant contended as well, engineering construction activities would be carried out, and that they were therefore site employees.[14]Mr Hogarth identified apparent anomalies which could arise if the appellant's argument were rejected. He submitted that a distinction could arise between the client's own employee, who might be not be leviable at all, doing planning and design work under the leadership of an agency employee, and the agency employee who would be leviable and leviable at the higher rate. The higher rate could also be triggered by client activity to which the presence of agency staff in planning and design could be wholly irrelevant. Mr Martin submitted that these consequences were recognised and accepted within the statutory structure and definitions. The agency staff in question would be working on engineering construction sites, undertaking engineering and construction activities, and would be benefiting from the training work of the Board in skills and safety procedures.[15]Mr Martin referred me to a number of authorities dealing with how the word "site", sometimes as part of a larger phrase, had been applied to particular factual circumstances in different statutory contexts. These included Commissioners of Customs and Excise v East Midlands Aggregates Ltd [2004] EWHC 856 (Ch), Re Hochtief Ltd 20 November 2009 before the First Tier Tax Tribunal, and ABB Zantingh Ltd v Zedal Building Services Ltd [2007] 77 ConLR 32 in the TCC. I did not find these helpful because of the different statutory contexts and different language being considered. The cases were also cited indifferently as between those where the court was exercising an error of law jurisdiction on appeal, as here, and those where it was exercising an original jurisdiction. What could be drawn from them, however, is that the courts had not adopted technical, legalistic or narrow approaches to what, in any of the contexts, constituted a "site", but had instead taken a broad, straightforward, purposive approach, appealing at times to common sense.[16]I was also referred, by way of guidance on the approach to be adopted to the interpretation of the provisions of the complex legislation in the Industrial Training Board Levy Orders, to two further authorities. I mention them though I do not think that what they have to say is of much importance in this particular case. In Engineering Industry Training Board v Foster Wheeler John Brown Boilers Ltd [1970] 1 WLR 881 (Court of Appeal) Lord Wilberforce said at 886 A to D: "This appeal depends on the construction of the Industrial Training (engineering Board) Order, 1968. This instrument, like others in the same field, raises questions of construction of a special and difficult character. It endeavours to bring within general expressions and definitions, which are rather fluid and loose in texture, types of industry and industrial activity of a varied and complex character which can seldom be accurately brought within any of them. In this respect it rather resembles legislation concerning the selective employment tax. The great variety of combinations which are dealt with can be seen by a glance at the Order itself and its various paragraphs and the tables, and I need not expand upon them. So when one is trying to interpret an order like this the processes of strict analysis are seldom conclusive and indeed they often lead to confusion. The answer tends to depend much more on what one may call impression -- certainly a cultivated experience impression; but still impression; and that is why they are committed in the first instance to an industrial tribunal; and that is why respect has to be paid to the findings of this body. Now, the Order here in its key paragraph uses words with which the courts are familiar enough in many contexts -- such words as 'article', 'manufacture', 'instal', 'erect', 'structure', 'plant' -- none of which are very precise. I have been very much helped by the tribunal's explanation of these words in their context; but I think the decision must ultimately be made on rather broader ground. In the first place, it is essential to construe this Order and its schedule as a whole".[17]It is notable that the Court of Appeal eschewed precise definitions, recognising the chameleon nature of the words in that legislation. Where a meaning is a matter of impression, courts should be careful before disturbing the meaning derived from the informed impression of a specialist Tribunal. More importantly, in an error of law jurisdiction, if a phrase is properly construed and understood, the question of fact and degree in its application is a question for the factual decision maker. It is only where that decision on fact and degree can be shown to involve some error of law, for example an irrational judgment or that the evidence has been misunderstood or ignored, that its decision will be overturned.[18]I was also referred to the principles of construction in this area as distilled by Newman J in Mark Wilkinson v Construction Industry Training Board 10 October 2000 at paragraph 8, in which he said:
"In my judgment the cases establish: (1) that the appropriate process of interpretation should involve, and largely depends upon, 'a cultivated and experienced impression'; (2) that an appellate court should proceed with care before disturbing the decision of the experienced Board to which parliament has committed the decision; (3) that the process of interpretation should recognise the purpose of the legislation comprises 'an endeavour ... to bring within general expressions and definitions which are rather fluid and loose in texture types of industry and industrial activity of a varied and complex character'; (4) that the scheme of the legislation has been designed with care so as to separate industrial activities and ensure that the relevant activity falls within the scope of only one statutory instrument and liability for assessment for levy according to one instrument; (5) that if there is an ambiguity the interpretation should not be strained against the taxpayer"
. I accept all of what Newman J said there. The questions[19]In my judgment, it is important to distinguish between the tests applicable at two stages in the process of imposing a levy. The first question is whether a company is a leviable establishment. Once it is ascertained that it is wholly or mainly engaged in the engineering and construction industry, consequences follow for its employees in terms of levy. The tests for whether a company is a leviable establishment differ in part from those which determine whether one of its employees is leviable at a higher or lower rate as a site or off site employee. If the asserted anomaly arises as between employees of a leviable establishment and employees of a non-leviable establishment, that is simply the consequence of the distinction between leviable and non-leviable establishments in terms of their liability to pay a levy. If it is a striking contrast, it is one which has a rational explanation.[20]The second question is whether an employee is a site or off site employee. In deciding that, two questions have to be resolved. (1). Which is the site where the activities of the employee wholly or mainly take place? (2). Is that a site where paragraph 1(a) (i) (iii) and (iv) activities are carried on?[21]I recognise the dangers in dividing up the statutory phrase in that way, especially as the question may at times be more readily answered as a matter of informed judgment with the purposes of the statute in mind, looking at the phrase as a whole. But the approach I have just mentioned illustrates how central to the issue is the question of how "site" is approached. The Employment Tribunal Decision[22]With those introductory words I turn to the Employment Tribunal decision. Much of what it said, which bears or is capable of bearing on this issue, was in fact directed to other issues raised by the appellant and, in particular, to the issue of whether it was a leviable establishment at all because of the number of office workers it employed, and whether it was one or two establishments. The final issue considered by the Tribunal was dealt with under the heading "site or off site". The Tribunal considered the significance for the definition of site employee of the inclusion of the activities in all of the sub paragraphs of paragraph 1(a) of the Schedule, as activities the carrying on of which brought an employee of a leviable establishment within the category of site employee through his activities at the site. It recognised and applied, however, the concession of the Training Board to which I have referred, now embodied in the 2009 Order. The Employment Tribunal then continued at paragraph 24.4.3:
"However, this does make for some difficulties with respect to people carrying out those functions and others which might be under 1(a)(i), (iii) and (iv) and working for the Appellant based at the client's premises. The arguments as we understand them are as follows. For the Appellant it is said that 'off site' really refers to office based employees. They draw some support for that from the ECITB's own guidance ..."
It considered this guidance, which is not directly relied on before me, and said in paragraph 24.4.4 and onwards of the last piece of guidance: "...This would appear to contemplate that those carrying out design (such as a large number of the Appellant's workforce), might be considered to be site employees. The ECITB's argument is that 'site' should mean, and does in this case, the client's premises. 24.4.5 Because this had not been argued in detail earlier, we did not have detailed evidence on it, particularly contained within the witness statements. It is true to say that throughout much of the discussion between the Appellant and the ECITB at an early stage, the Appellant themselves said that their agency staff were based at the client's 'site'. Whether or not they meant that to mean that they should be levied at the 'on site' rate is not clear as they were, of course, arguing that they were not in scope at all. Having considered Stroud's Judicial Dictionary of Words and Phrases, there is not a great deal of assistance. We can see that the ECITB have interpreted 'site' in this case to include the client's premises. 24.4.6 we do not see how we can do better, on the information before us but to interpret this in the same way as the ECITB. If we apply the wording of the order in its strictest sense, that would have the effect of including the design consultancy itself as an on site activity (which has previously not happened). We therefore should construe it to the 'taxpayers advantage' and we do so. Where the work carried out in 1(a)(ii) (the design, planning etc) is removed from the site where the engineering construction might be carried out it would not be an on site activity. It is more complicated where agency staff are placed at the client's premises because we simply did not have enough information to say whether where they were based or carrying out their work was likely to be on site or off site. We had insufficient information even where we were told about an office 15 miles away. Again, the burden of proof rests on the Appellant to show that if they were in scope, the levy should be assessed differently and that they have different figures for on site and off site employees which they have not shown. 24.4.7 In our view, there is nothing wrong with the interpretation given to the site by the ECITB, that is that site means an engineering construction site. In some cases agency staff will clearly be working on site, particularly where they are, for instance, field engineers or where they are working very close to the production and any other activities carried out under 1(a)(i)".[23]Finally, it set out its conclusions on a number of issues, including on this issue, in paragraph 6. It said: "The question which emerged in a bit more detail over the course of the hearing but which was not set out in detail in the issues is with respect to the question of the amount of levy determined by the question of whether the employees are site employees or off site employees. Off site employees are those employees not on the client's premises carrying out activities under 1(a)(ii) (that is the design consultancy) and possibly some others based at client's premises where the appellant can show significant geographical and other distance from engineering construction activities".[24]The Employment Tribunal was concerned about the detail of the evidence it had received from the appellant and I should refer to it, noting Mr Martin's complaint that the Training Board had tried on many occasions to obtain disclosure from the appellant of just what its agency employees did and where. In the context of the argument about whether the appellant was one or two establishments and whether either of them was a leviable establishment, the Employment Tribunal records this at paragraph 826, in a mix of both noting and assessing evidence:
"The other discipline suggests to us that people engaged in activities covered in 1(a)(ii) (design and planning), making a total of approximately 252 people out of 304 carrying out activities of that sort"
. There was debate before me as to whether that was or was not a finding of fact.[25]The Employment Tribunal refers to the description of the work done at various of the appellant's client's installations, but the actual premises, where the work is done, and its relationship to the larger installation is not described. It is plain that the parties proceeded on the basis that almost all the agency staff were working in or close to the client's industrial premises or installations, or whichever word avoids pre judging the question of what is a site. Mr Martin said that it was not common ground, however, that all or most were in offices in or adjacent to those premises, because insufficient information was provided by the appellant and the Tribunal so concluded. The Employment Tribunal took the view that, for example, CAD operators work:
"... Is clearly connected to maintenance or repair, as that is identified by the operators.

(a) (i), or at the very least related activities under 1(c)"

. It continued:
"We had no or very little evidence on any significant numbers of people working for the appellant not carrying out ECI activities. Mr Laird's evidence with respect to the agency staff in particular was that only a very small proportion are engaged in activities which fall within paragraph 1(b) ... and said that no more detail can be provided because the day to day management is the responsibility of the client. Mr Ronson's evidence was that he gained an impression of what was required. He knew the clients and he knew most of the people who were available to them. He also had CVs which were up dated and, on some occasions, engineering work requests. He said, when asked by a Tribunal member, that he knew what the people were doing but 'hand on heart' he could not know precisely what they were doing. We remind ourselves that the appellant bears the burden of proving that they were not so engaged. 8.31 As far as field engineers are concerned, there is very little evidence they would be engaged on anything other than engineering construction. The difficulties with the appellant's evidence on this is that they indicated that they knew very little of what the employees were doing on a day to day basis as they were under the control and management of the client and, when they could give us evidence with respect to what they were doing, it was invariably in those areas which they believed were out of scope but which we believe are more likely to be in scope, field engineers and CAD operators for example". "
Scope", I should say, is related to a different question from whether an employee was a site or off site employee.[26]Finally, at paragraph 8.36, the Tribunal said:
"A dispute has arisen as to what percentage levy should apply to agency staff. This is because the ECITB levy different percentages for 'site' or 'off site' workers. Agency staff are not working at On Line House. They are based at client's premises. However, we have insufficient evidence to say where at client's premises each of them might be working and whether it is likely to be on an engineering construction site, very close to one, for instance, in an office or some miles away. We heard some evidence that many of them are office based and that, in some cases, that office may be some distance from engineering construction, in one instance, maybe some 15 miles away. We also heard that one client, Corus, had a huge site near Scunthorpe where a variety of activities were carried out. The ECITB have some guidance on this and this is referred to later where we discuss the meaning of 'site' and 'off site'"
. Conclusions[27]First, I reject Mr Martin's contention that the issue now raised about the significance of the activity and location of the agency employee for the rate of levy was not raised before the Employment Tribunal. It was certainly not the major issue. But it is clear from paragraph 8.36 of its decision and the evidence, and from the discussion and conclusions at paragraph 24.4 and in the concluding paragraph at sub paragraph (6), that the issue was raised.[28]Second, it is clear that the Employment Tribunal concluded that a significant number, but by no means all of, the agency staff were engaged in paragraph 1(a)(ii) work. It was not an insignificant element on the levy. I conclude they found, in paragraph 8.26, that 252 out of 304 were engaged in that activity, but even if I am wrong, their approach shows that, nonetheless, it was a significant number. It is also obvious that the Employment Tribunal accepted the common understanding that almost all of the agency staff worked in an area within or very close to the related industrial installations.[29]Third, I accept that the Tribunal made no findings of fact about the precise nature of the premises where agency staff carried out planning and design work, nor about the geographical or physical relationship of the premises, where they carried out that work, to the rest of the client's installation. I also accept that the Employment Tribunal was entitled to conclude that it had no sufficient evidence on those aspects in order to reach any findings of fact. I also accept that any such deficiency in the evidence was for the appellant to remedy, because it knew that it was raising the issue and it knew that it had the means of knowledge.[30]Fourth, the significance of the quality or deficiencies in the evidence is affected by the issue for which the evidence was necessary. The respondent's contention to the Employment Tribunal was, or at least at times included, a broad contention that the correct approach to "site" was to look at the area of the client's installation as a whole, what Mr Martin described in other ways as the area within the security fence around the installation or the area of its works, even if the offices were separated for example by a public highway or yet greater differences amounting to kilometres. Mr Martin did, however, accept that a point would come where the distance of itself between the office premises, if that was where the agency staff worked on planning and design, and the industrial installation of the client would mean that they were two different sites. Of course, if that very broad approach is right, evidence of the precise location of the place where agency staff carried on paragraph 1(a)(ii) activities, and its relationship to the rest of the client's installation by distance or barrier, would almost always be irrelevant. If, by contrast, the nature of the location such as an office, and where it is in relation to a larger installation, is capable of affecting the conclusion as to what is the site where the agency staff work, detailed evidence is required. If the argument is simply that agency staff in an office, even in the middle of an industrial installation, are not working at a site where engineering and construction activity within paragraph 1(a)(i), (iii) and (iv) is carried on, because the office itself is the site in question where no (i), (iii) or (iv) engineering construction activity is carried on, evidence would still be required that that is all that the employee in question did and that that is where he did it.[31]Fifth, the Employment Tribunal is not clear about what approach to "site" it adopted. At the end of paragraph 24.4.5 and at the start of 24.4.6, the Tribunal says that it is adopting the Training Board's very broad approach. In its conclusion at sub paragraph (6) the Tribunal says that an employee might be off site if the appellant could show "a significant geographic and other distance from engineering construction activities". This appears to be consistent with the Training Board's very broad approach. It is not clear to me what "other distance" could comprehend unless it covers physical barriers or site boundaries such as roads, nor is it clear why both those forms of separation are necessary, but that may be too strict a reading of the Tribunal's decision and its use of the conjunction. However, what the Tribunal also said in paragraph 24.4.6 appears to accept that, subject to what the evidence showed, a location at the client's premises where agency staff carried on 1(a)(ii) planning and design work might not be a site where employment construction activities were carried on. That is completely contrary to the Training Board's approach. A comment about the need for evidence of that sort only makes sense if such evidence is capable of showing such a location not to be a site where engineering construction activities were carried on, because it enabled a distinction to be drawn between the installation and the office site in or near it.[32]However, sixthly, it seems to me that whichever approach is adopted this appeal must be dismissed. This is because, even on the appellant's approach, the Employment Tribunal was entitled to hold that it did not have sufficient evidence to reach a view in relation to any employee or site as to whether the employee was site or off site, that the evidence was within the appellant's hands and it was the appellant and not the Board which could demonstrate what the position was. Having accepted, as I was invited to do by Mr Hogarth, that the issue had been raised which generated the need for that evidence, it was for the appellant to produce the evidence to enable the Tribunal to make findings of fact and to reach judgments as a matter of fact and degree. The provision of such evidence would have enabled any error of law in the approach of the Employment Tribunal to be discerned and ruled upon. Also, if it had failed to make findings of fact or to reach a lawful judgment reasonably open to it as a matter of fact and degree on the facts found, remission might have been possible. But here, the appellant simply did not provide sufficient evidence to enable satisfactory findings of fact to be made for the conclusion to be reached on the basis upon which the appellant submitted that the Employment Tribunal should have decided the issue. I do not consider that remission would be appropriate in those circumstances.[33]Although that is sufficient to dispose of the case, I do not feel that I should quite leave it there, given the argument which I have heard and the uncertainty over what the Employment Tribunal decided was the right approach. This particular issue only arises where the employee is undertaking only paragraph 1(a)(ii) work in offices in or near a larger installation where paragraph 1(a)(i), (iii) and (iv) work is being carried on by someone, whether an employee of the client or an employee of the agency. The question of whether the site where the employee carries out his activities is a site where activities in 1(a)(i), (iii) and (iv) are also carried out obviously depends on how the meaning and application of site is approached. The hallmark of the right approach should be a purposive and common sense approach, not one of technicality and rigidity. An informed impression is a good way of describing this task, though it is not quite an issue of interpretation but rather a question of recognising that there are a wide variety of circumstances in which the word may come to be applied and that that may not permit always satisfyingly logical or wholly consistent answers.[34]I would be very reluctant to accept as correct in law the adopting of any hard and fast rules for setting out how the application of the word "site" to a set of facts should be approached. I point out, however, that the higher levy indicates a greater need for benefit from the safety and skills training provided by the Training Board. Office workers carrying out 1(a)(ii) work in a leviable establishment, as at the appellant's own base, are levied at the lower rate, as would be agency staff carrying out work in offices remote from the site where paragraph 1(a)(i), (iii) and (iv) engineering construction activities were carried on. That accepted legislative structure and its consequences suggests -- I put it no higher -- that a purposive approach to the definition of site and off site employee, and hence site within the definition of site employee for whom the higher rate applies, is better met by considering the physical separation or intermingling of the office, where no engineering construction activities within 1(a)(i), (iii) and (iv) are carried on, from an area where those activities themselves are actually carried on and where the greater danger lies and where the need for greater training lies, rather than by treating what may obviously be one industrial complex or development as the engineering construction activity site when deciding whether the higher levy is payable. However, in any given case it may be appropriate to describe the whole area of industrial activity, including offices in its midst, as the site, or to do so even where the offices are separated by road or fences from that larger area.[35]But I would not adopt, on the other hand, the suggestion that the security fence to the whole installation must inevitably be the boundary of the engineering construction activity site, regardless of the nature of any internal separation.[36]I urge caution in respect of any test requiring remoteness or significant geographical distance, even up to kilometres, before a site where any (a)(ii) work is carried on can be differentiated from a site where 1(a)(i), (iii) and (iv) activities are carried on. Distance may be relevant but requiring remoteness is likely to be heading for error. Equally, it is unrealistic to treat only the area cordoned off for safety during actual engineering construction activities as the area capable of being an engineering construction site. In some cases it may be so but it is not always and inevitably so, in my judgment.[37]So, offices on or near a larger installation may or may not be a site or the same as a larger site where engineering construction activities are carried on. A conclusion will require an examination of the facts and the location in relation to the wider installation where engineering construction activities in 1(a)(i), (iii) and (iv) are carried on.[38]The appellant's contention that its agency employees were largely off site employees required it to provide the evidential basis for the judgment of that issue. As I have said, there was no sufficient basis upon which the Tribunal could find which, if any, were off site employees. The means of knowledge and the provision of evidence were in the appellant's hands and it was for it to provide the evidential basis for the judgment as to site and off site employee which it sought.[39]There was no error of law in the decision of the Tribunal and, accordingly, this appeal is dismissed.[40]Ms Davies?[41]MS DAVIES: Thank you, my Lord. That leaves the matter of interest on the award made by the Tribunal and the matter of costs --

MR JUSTICE OUSELEY: Yes.

[43]MS DAVIES: -- to be determined. In respect of interest, my Lord, the respondent submits that it is 8 per cent since 19 January, which is 273 days.

MR JUSTICE OUSELEY: 8 per cent from?

[45]MS DAVIES: 19 January, my Lord.

MR JUSTICE OUSELEY: Yes.

[47]MS DAVIES: Which on my calculation, my Lord, is £19,079.84.

MR JUSTICE OUSELEY: How much?

[49]MS DAVIES: £19,079.84.[50]MR JUSTICE OUSELEY: Right. And costs? I have got a schedule.[51]MS DAVIES: My Lord, yes. The respondent applies for its costs on an indemnity basis in this case. That application is made on the basis that the respondent says that the appellant's conduct has taken this case away from the normal position and that is because they have put forward, my Lord, a ground which is dependant on evidence which, as you have said in your judgment, they themselves did not produce at the Tribunal. Clearly, for the ground of appeal relied upon to succeed, such evidence would have needed to have been necessary before the Tribunal. The respondent submits that, on that basis, this appeal was doomed to fail through that lack of evidence.[52]A secondary point, my Lord, the respondent relies on the appellant's -- what the respondent says is unreasonable conduct -- in the way it has raised and then dropped various points during the appeal process. Dropping various points as late as last week shortly before the appeal hearing. I refer you, my Lord, in that respect to the chronology set out from paragraphs 5 to 14 in Mr Martin's skeleton which I believe was handed to you on Wednesday.[53]For those reasons, my Lord, the respondent says this is a case which has been taken outside the norm and costs should be awarded on an indemnity basis.[54]MR JUSTICE OUSELEY: Where is your schedule of costs? I have got -- sorry, you have sent up another one.[55]MS DAVIES: A revised schedule was faxed to the court yesterday afternoon, I believe.[56]MR JUSTICE OUSELEY: Yes. And the costs you want are £36,117.69, is that it?[57]MS DAVIES: Yes, my Lord, that is correct.

MR JUSTICE OUSELEY: Yes, Mr Hogarth?

[59]MR HOGARTH: Well, I have not received a revised schedule, but it is not far off the original schedule. Mr Martin's submissions owe a lot to exuberance of youth, if I may put it like that. The test for indemnity costs is a very strict test. This case, on the face of it, would not appear to be anywhere near the boundary between indemnity and ordinary costs. But, my Lord, can I just make this point, I accept we have lost this battle, this is one of a series of annual disputes between companies in this industry and the Training Board. We have established a test which is substantially different from the test which the Board wish to use as the basis for assessment and I would invite my Lord to reach the conclusion that, although we have lost on one issue, we have won on that issue and make an order that only a proportion of the respondent's costs be paid by the appellants.[60]My Lord, interest is in the court's discretion.

MR JUSTICE OUSELEY: Do you want to reply on indemnity?

[62]MS DAVIES: My Lord, only to make the point that, in terms of the test having been changed by your judgment, I think in fact it is clear that the judgment simply sets out the parameters in which the definition should be applied. I would invite the court to find that is not a victory for the appellants as you have been invited to find.

MR JUSTICE OUSELEY: Mr Hogarth, you did not have any points on the sum claimed of £36,117.

[64]MR HOGARTH: My Lord, it is not a million miles off our bill of costs. Our bill should be significantly higher because we have the running of the appeal. Our bill is very similar, one would normally expect the respondent's bill to be significantly lower. The reason why it is not is that the hourly rate charged by an associate solicitor at the respondents appears to be higher than the hourly rate charged by the senior partner of the appellant's solicitors, which is a somewhat unusual situation, and the rate charged by junior counsel appears to be higher than the rate charged by leading counsel, which again is a somewhat unusual position.

MR JUSTICE OUSELEY: Are you asking for it to go for a detailed assessment?

[66]MR HOGARTH: My Lord, we would like it to go to a detailed assessment.

MR JUSTICE OUSELEY: Ms Davies?

[68]MS DAVIES: My Lord, I would invite you to deal with this by way of summary assessment on the basis it was a day's hearing and it is something the court would be capable of dealing with by summary assessment.[69]MR JUSTICE OUSELEY: Do you wish to respond to the points about counsel's fees and solicitor's charge rate.[70]MS DAVIES: My Lord --[71]MR JUSTICE OUSELEY: Mr Hogarth's point that normally the appellant has higher costs because they prepare the bundles is normally right. You normally expect junior counsel to be charged less than Queens Counsel; you normally expect an associate solicitor to be charged less than a partner, although I appreciate there are differences in the size and location of firm.[72]MS DAVIES: My Lord, quite. I would invite you to take into account those differences. In respect of the similarity of the overall costs, I would ask you to take into account that the respondent in this case was in fact involved in the running of the case, in terms of preparation of the bundle and matters such as that. I am instructed, my Lord, that the respondent provided a detailed list of all the documents, including references to the page numbers in the trial bundle, and the bundle which you have before you is exactly in accordance with that save that there is a few extra pages. Further, my Lord, in respect of the comparison between counsel's fees, I would invite you to take account of the fact that documents provided by Mr Martin were lengthier and, in my submission, more detailed than those provided --

MR JUSTICE OUSELEY: Well, they certainly had those qualities.

[74]The appellant will pay interest at 8 per cent from 19 January, which, in the absence of dispute, I will take as Ms Davies' figure of £19,079.84. The respondent shall receive its costs but not on a indemnity basis. I do not think this is remotely a case for indemnity costs. There are proper concerns raised about the approach adopted by the Tribunal which, as I said, appears to be contradictory internally, and the very width of the Training Board's argument. It is true that the appellant has dropped points by the wayside over time, but rather than punish that with indemnity costs I would prefer to record appreciation for simplifying the case.[75]Finally, there is an issue as to the quantum of costs. Ms Davies has asked for summary assessment and summary assessment it will be, with the inevitable rough edges that go with that. The sum claimed is, as Mr Hogarth points out, very similar to that in total claimed by the appellant, which I accept is surprising for a respondent in relation to an appellant. I also accept that there are legitimate concerns about the amount charged by junior counsel for the respondent compared to the amount charged by Queens Counsel for the appellant. Doing the best I can, on a rough and ready basis, it is my judgment that the total sum payable should be reduced from £36,117.69 to a round figure of £27,000 including VAT.[76]Thank you very much.[77]MR HOGARTH: My Lord, I am grateful. I hope my Lord enjoyed our somewhat unusual journey into this esoteric jurisdiction of the court.

MR JUSTICE OUSELEY: I am grateful to everybody for their assistance.

Cited in 1 later judgment