Line v Professional Connection Ltd [1991] UKEAT 639_90_2011

EAT
Line v Professional Connection Ltd
[1991] UKEAT 639_90_2011 · 1991-11-20
MR JUSTICE TUCKER : The Appellant seeks to appeal from a decision of the Industrial Tribunal held at Southampton on 5 November 1990 whereby his application for compensation on the grounds of unfair dismissal was dismissed. The Tribunal found that the Appellant did not have two years continuous service.The grounds of Appeal are that the Respondent had conceded the length of service issue on a former occasion, that the facts relating to the Appellant's employment were not in dispute but that the Tribunal erred in law in reaching the decision that the Appellant had not been employed prior to 1 May 1988.The concession to which I have referred, on the part of the Respondent was made in a letter dated 18 June 1990 and in his grounds of Appeal the Appellant draws attention to that. He points out that the Tribunal considered the agreed facts of the Appellant's employment, considered authorities referred to by him and his submissions of law, considered other authorities that he had not referred to but which they themselves cited but nevertheless decided that he had not been employed prior to 1 May 1988.The Notice itself does not condescend to particulars of the error in law, but the Appellant has appeared before us and has developed it. The Appellant, who is a financial consultant has, in our opinion, only his own ingenuity to blame for the position in which he finds himself. For reasons which we have no doubt were to his financial advantage, and let us assume perfectly legitimate reasons he so arranged things that, as the Tribunal found, his services were provided to the Respondent by or through a company called Corridon Ltd. There is no doubt, and the Appellant has frankly told us, that it was Corridon Ltd who paid his wages. Corridon deducted tax on a PAYE basis. Corridon deducted National Health Insurance contributions. Corridon owned the car which was provided for the Appellant's use and, as he has frankly told us in his tax return to the Inland Revenue the Appellant at all material times was describing Corridon as being his employer.We find difficulty in accepting that a man can describe himself to the Inland Revenue as being employed by one company for tax purposes, and come before this Tribunal and describe himself as an employee of another company for industrial relations purposes. Nevertheless we looked to see what the realities of the situation were and as the Appellant correctly submits to us, the question is whether this was in reality a contract of service or a contract for services. The Appellant relies heavily on a letter addressed to him dated 7 May 1987 written by Richard Carver the Respondent's managing director. That letter was before the Tribunal and they made extensive reference to it. Having read the full letter to ourselves we feel that the Tribunal referred to all material parts of it, but let it be clear we have read the whole letter.The tests which the Appellant, perfectly correctly formulates for us and no doubt formulated for the Tribunal to consider, were these. First, who had control of his services or service? Who controlled what he did? to put it shortly. Second, was he offering an exclusive service to the company by whom he contends he was employed? - and he contends that he was working full-time for them. And third, who had the power to, for example, suspend or dismiss or to say what holidays he should take? Those are all matters which he places before us but were all considered by the Tribunal.We have mentioned the fact that it was Corridon Ltd who paid him and who made deductions for tax purposes. Those may be and often are very material factors but it is perfectly correct for the Appellant to contend that they are not necessarily conclusive. What the Appellant asks us to do is to look at the intention of both parties, at any rate from 1 May 1987 which was the date referred to in the letter I have mentioned.In their reasons, which were full reasons, the Tribunal as has been indicated, referred to that letter. They say at para. 6(b)
"In 1987, a new arrangement was reached. It was confirmed in a letter written by Mr Carver, on behalf of the respondent, to the applicant."
It refers to his appointment as financial director and company secretary of the Professional Connection, the Respondents, and other companies. They refer to the recital in the letter that this appointment "constitutes your full-time job and you will devote the whole of your time and attention to pursuing the interest of the company".They then deal with the provision for payment which they set out in full and which it is unnecessary for us to repeat. It relates that the Appellant's services will be provided by Corridon Ltd from 1 May to 30 June and through Corridon Ltd from 1 July to 31 August 1987 and then the letter says this, and this we feel is a material passage:
"With effect from 1 September 1987, you will become a full-time employee of the Professional Connection Ltd."
and the salary details are then set out.What was the purpose of that if he was already a full-time employee of that company? The Appellant has in our view been unable to furnish us with a satisfactory explanation. In fact, at his own instigation, his appointment was deferred, unfortunately, as it turns out for the purpose of these proceedings from 1 September 1987 until a later date, hence the finding by the Tribunal that he was not an employee until 1 May 1988.The Tribunal heard submissions from Mr Carver who appeared to represent the Respondent at that hearing. Mr Carver conceded that the Appellant's job content and work had remained the same ever since his appointment on 1 May 1987. Mr Carver told the Tribunal however, that the Applicant only became an employee from 1 May 1988. That the Applicant, now the Appellant, claimed in his Originating Application that to be the case and that it had been planned for September 1987 but at the Appellant's request had been deferred and Mr Carver was arguing in the circumstances that the Appellant did not have at the date of dismissal, that is to say in February 1990, two years continuous service.The Appellant referred the Tribunal, perfectly properly to two authorities and they recite them in their decision. They themselves as they were perfectly entitled to do, took account of two others and they reviewed the law as set out in those authorities. Having done so they asked themselves the correct question in our view which was this - "We asked ourselves whether in reality, the applicant was, during that period, employed under a contract of service". They felt the position was ambiguous. It could be one, it could be the other and they said:
"..it is for that reason that we look at what the parties have themselves decided the relationship should be. We are quite convinced that that was, and for very good reason, a contract for services until 30 April 1988. We are influenced in reaching that conclusion by the wording of 7 May 1987 letter and, particularly, the applicant's memorandum of 26 January 1988. That discloses that any tax and National Insurance, in respect of the applicant, was being paid by Corridon Ltd. He was, without doubt an employee of that company.."
and we reiterate that is how the Appellant described himself to the Inland Revenue. The tribunal continue:
"The Fees for the applicant's work were being paid by the respondent to Corridon Ltd."
In para. 11 they say:"If this truly was a contract of service from the beginning, then we are bound to say that what took place was an attempt to deceive the Revenue".That was not the case. They found this:
"..This is a case where the parties have, in effect, carried on with a system, which had been used prior to 1 May 1987, of the respondent (or earlier the group of which it is part) buying in the services of the applicant from Corridon Ltd. It is clear from the applicant's memorandum of 26 January that that had certain financial benefits to him and for that reason the parties genuinely and properly entered into a contract for services. The applicant was not an employee prior to 1 May 1988."
Accordingly they dismissed his application.We would make this point. The fact that on an earlier occasion the Respondent, through their solicitors had by letter made a concession as to the length of service, of course in no way binds the Tribunal who have an obligation to examine it and when it came to the hearing it is clear that the Respondents were of a different view. The Tribunal were no doubt fortified in the view they took of the matter, by the fact that in his Originating Application the Appellant himself had clearly asserted that his employment began on 1 May 1988 and in their Notice of Appearance the Respondents confirmed that this date was correct. There is in our opinion no error of law to be identified, nor is there any question of any perverse finding of fact.The decision reached by this Tribunal was one which they were fully entitled to reach on the facts. They posed for themselves the proper question of law. They applied the proper test to the facts as they found them. We can see no error in the way in which they approached the matter. The Appellant is clearly of another view, but that is not sufficient for us to say that his Appeal should go forward.We have examined these facts. We have examined the law which the Tribunal applied to those facts. We can perceive no error in the Tribunal's approach. Therefore this Appeal has to be dismissed.