Essex & Herts Health Services v Sudani [1994] UKEAT 508_94_2811

EAT

Essex & Herts Health Services v Sudani

[1994] UKEAT 508_94_2811 · 1994-11-28

MR JUSTICE HOLLAND : On 11 April 1994, an Industrial Tribunal sitting for London North, had before it a preliminary issue arising from an application based on unfair dismissal. The issue was as to whether the applicant had been continuously employed by the Respondent for a period of not less than two years ending with 29 June 1993, that is, the effective date of the termination of such employment.

(a) which reads as follows:

"(1) ...,section 54 does not apply to the dismissal of an employee from any employment if the employee- (a) was not continuously employed for a period of not less than [two years] ending with the effective date of termination..."

In the event, there was an unanimous decision on this preliminary issue favourable to the applicant with as a result the Respondent's Appeal. The facts are short, but give rise to complications. The appellant is a doctor who practices as a urologist and at all material times has been engaged as such with the National Health Service. His case is that from 1 August 1990 to January 1992, he worked at Old Church Hospital as a Supernumerary Registrar in surgery and urology and that hospital (it is common ground) is within the Barking, Havering and Brentwood Health Authority.

In January 1992, he became Staff Grade Doctor at St Margaret's Hospital, a hospital within the West Essex Health Authority. That appointment was evidenced by a letter of 12 May 1992 from that Authority to Mr Al Sudani. It reads so far as material as follows:

"...Dear Mr Al-Sodani

APPOINTMENT OF STAFF GRADE DOCTOR

1. I am instructed by West Essex Health Authority to offer you a whole time appointment as a Staff Grade Doctor from 6th January 1992 for a period of one year in the first instance.

This appointment will be subject to review on 5th October 1992 when the Health Authority will decide whether to offer you a further contract of service subject to the Terms and Conditions of Service of Hospital Medical and Dental Staff (England and Wales) ("the TCS"), and to the Conditions of Service of the General Council of the Whitley Councils for the Health Services (Great Britain), as amended from time to time, copies of which may be seen in the Medical Personnel Department..."

We turn to paragraph 5:

"...5. For the purposes of Section 1(2) of the Employment Protection (Consolidation) Act 1978, the date when your continuous period of employment began is the date of commencement. Previous NHS service not treated as continuous under the provisions of the Act may however be reckoned for certain purposes under the TCS, and this date is 1st January 1987 (date of commencement of continuous NHS service)..."

We then turn to paragraph 14:

"...14. If you wish to accept this appointment on the terms specified above, please sign and date the form attached to this letter and return to me. A second signed copy of the letter is also attached which you should also sign and keep for future reference.

This offer, and acceptance of it, shall together constitute a contract between the parties.

Yours sincerely,

For West Essex Health Authority

On the documents that were before the Industrial Tribunal, it would seem that there was in the event no signature forthcoming from Mr Al Sudani to the attached form of acceptance signifying agreement with the terms of that offer.

Before moving on with the chronology in this matter, it is helpful to interpose first, that we have before us the Terms and Conditions of Service referred to in the text of the letter. Those come in document headed "National Health Service, Hospital Medical and Dental Staff (England and Wales) Terms and Conditions of Service April 1986". The introduction to the document starts as follows:

"i. This handbook sets out the Terms and Conditions of Service of Hospital Medical and Dental Staff in England and Wales. It supersedes the booklet issued in April 1981, and incorporate the amendments agreed between the Secretary of State and the medical and dental professions subsequent to that date.

ii. The remuneration and conditions of service set out in this handbook have been approved by the Secretary of State under Regulation 3 of the National Health Service (Remuneration and Conditions of Service) Regulations, 1974 (S1 1974 No 296)..."

Our second interpolation invokes Section 1(2) of the 1978 Act. That reads:

"(1) Not later than thirteen weeks after the beginning of an employee's employment with an employer, the employer shall give to the employee a written statement in accordance with the following provisions of this section.

(2) An employer shall in a statement under this section-

(a) identify the parties;

(b) specify the date when the employment began;

[(c) specify the date on which the employee's period of continuous employment began (taking into account any employment with a previous employer which counts towards that period)]..."

On 21 December 1992, a further letter was sent to Mr Al Sudani, this time with the heading "Essex and Herts Health Services". That letter read so far as material:

"...Dear Mr. Al-Sodani,

APPOINTMENT OF STAFF GRADE DOCTOR IN UROLOGY

1. I am instructed by the West Essex Health Authority to offer you a whole-time appointment as a Staff Grade Doctor from 6th January 1993.

2. a) Your duties which are assessed as amounting to ten basic sessions and up to a maximum of three regular additional sessions, are specified in the job description you have already received.

b) The Authority will nominate from time to time the Consultants in the relevant speciality to whom you will be responsible. Initially, you will be responsible to the Clinical Director of General Surgery..."

Turning then to the balance of the letter, paragraph 5 thereof is in identical terms to the like paragraph in the earlier letter, as is paragraph 14. Yet again, the letter is signed this time on behalf of Essex and Herts Health Services. The further feature of this chronology is that on 11 January 1993, Mr Al Sudani signed a letter of acceptance in these terms:

"...I accept the offer of appointment on the terms made in the foregoing letter and on the terms and conditions of service mentioned therein..."

Before departing from these two letters, although we have not seen fit to repeat for the purposes of this Judgment the full contents thereof we are entirely satisfied that those contents are consistent with being the terms of a contract of employment. Therein are terms which relate to payment of salary, which relate to contract, which relate to leave entitlement and which relate to procedures for settling matters of grievance and matters of discipline.

If we pause here in the course of this Judgment and focus upon the latter letter, on the face of it that provides that the employers of Mr Al Sudani were the West Essex Health Authority, that the employment commenced on 6 January 1993, so that it was from that latter date that continuous employment began for the purposes of the Employment Protection (Consolidation) Act 1978 . It necessarily follows that on the face of that document there is an immediate answer to the preliminary issue raised before the Industrial Tribunal and that is as to the period of continuous employment preceding the date of termination. Plainly on the face of that document, that period of continuous employment is identifiable very substantially less than the two years specified as the minimum period by Section 64. How then, did there come to be a live issue before the Industrial Tribunal? As to this, Miss O'Rourke submits to this Tribunal as apparently she submitted to the Industrial Tribunal, that the starting point for consideration of that document is Section 140(1) of the Act. That reads so far as material:

"...any provision in an agreement (whether a contract of employment or not) shall be void in so far as it purports- (a) to exclude or limit the operation of any provision of this Act or; (b) to preclude any person from presenting a complaint to, or bringing any proceedings under this Act before, an industrial tribunal..."

On the basis of that statutory provision, she then pursues the argument as follows: the letter just referred to, seemingly a contract of employment, served to fall foul of Section 140. It did that, because in her submission, it mis-stated the employers in that the employers should not have been identified simply as the "West Essex Health Authority", but more importantly, it mis-stated the date of commencement of continuous employment. Instead, of 6 January 1993, it should have clearly specified the 1 August 1990, that is the date on which recent continuous employment with the National Health Service, that is, as she would submit with the Secretary of State, commenced. That argument was advanced to the Industrial Tribunal and in the event that Tribunal expressed itself as follows:

"1 The facts were not in dispute they are that the Applicant had commenced employment at the Old Church Hospital as a Registrar in the Surgery/Urology Department in August 1990 and this hospital was within the Barking and Brentwood Health Authority.

2 In January 1992, the Applicant moved to the Urology Department of St Margaret's Hospital, Epping, Essex, which was administered by the Essex and Hertfordshire Health Authority, which is now known as the North Essex Health Authority. Both these authorities are under the administration of the Regional North East Thames Health Authority and that in turn is answerable under the National Health Service to the Secretary of State for Health.

3 It was agreed that the Applicant's Terms and Conditions of service were those as negotiated under the National Health Service in April 1986 and is uniform for all doctors employed in the National Health Service at this grade.

4 The Whitley Council regulates the terms of agreement under which the Applicant worked in both his first employment and his later employment. The Respondents argued that, schedule 13 paragraph 18 of the Employment Protection (Consolidation) Act 1978 did not apply as these health authorities were not associated employees within that paragraph. We were referred to Gardiner v London Borough of Merton 1980 IRLR which specifically dealt with the position of local authorities and we accept that these health authorities who administered the hospitals in which the Applicant worked were not associated employers within the definition set out in paragraph 18 of the schedule.

5 However, on looking at the reality of the situation, we find that the Applicant was in fact employed by the National Health Service, ie by the Secretary of State for Health, who administered the National Health Service under the uniform terms and conditions dated 1986 which applied to all doctors working in the Health Service. Having been referred to the National Health Service Act 1977, we conclude that the true employer of this Applicant was the Secretary of State acting through its agents who administered the system. The local administrator of the Health Service was the Regional Health Authority which in turn delegated its powers to the Local Health Authority:- we refer specifically to section 1 and section 8 of that Act.

6 We find therefore on these facts that the Applicant commenced employment on 1 August 1990 and continued in employment with the National Health Service and therefore the Secretary of State until his employment was terminated by the agent of the Secretary of State on 29 June 1993. The Applicant therefore has sufficient continuity of the service to qualify for the right not to be unfairly dismissed..."

We interpose at this stage. We are told by Miss O'Rourke who appeared before the Industrial Tribunal that the only evidence before the Tribunal were the letters already cited in this Judgment. There was no oral evidence called before the Tribunal and for the most part, its deliberations were based upon submissions as to Law.

This Tribunal takes the view that the real issue here starts, not with the statute, but with the contract, that is in particular with the letter of 21 December 1992, which purports on it's face to be a contract of employment, which contract of employment has the benefit of signatures on behalf of the employers, together with the signature of the applicant himself. Plainly, prima facie, it is that document which governs the whole issue, it is that document which purports to satisfy the requirements of Section 1(2) in so far as it identifies the parties, in so far as it identifies the date of commence and in so far as it identifies the period of continuous employment. The key issue for the Industrial Tribunal had to be what did the document mean? Was it the contract of employment? or was there some means of finding the employment to be different from therein set out, notwithstanding the operation of the parole evidence rule? Further in any event, having regard to the terms of Section 140(1) was any term of that letter void, as purporting to exclude or limit the operation of any provision in the Act, alternatively void as per purporting to preclude Mr Al Sudani from presenting a complaint to an Industrial Tribunal?

Those being the issues plainly raised, they were issues which in the judgment of this Tribunal could only be resolved by first hearing evidence. In the event, not only did the Industrial Tribunal not hear any evidence about this matter, they did not even refer to this essential document in the reasons given for the decision. Very regrettably and no doubt for reasons which emerged from the way in which the matter was presented to them, they did not begin to start resolving the issue that was confronting them, that is the issue as to the date at which this employment commenced, that is the period of continuous employment preceding the date of termination.

Looking at the Reasons as set out, those Reasons do not begin to bear upon this fundamental issue. That fundamental issue was a mixed question of law and fact. It was essential first for the Tribunal to hear evidence and find the facts and thereafter apply the law to it. It is plain that this exercise simply was not undertaken. It necessarily follows that when in the last paragraph the Tribunal expresses itself as follows "...We find therefore on these facts that the Applicant commenced employment on 1 August 1990 and continued employment...until 29 June 1993..." that was a finding which reluctantly we have to say, no reasonable Tribunal properly directed could arrive at. Thus it is that, notwithstanding that we are a Tribunal which can only react to errors of law therein as we identify it, is a manifest error of law and one that must mean that this Appeal has to be sustained.

However in our own deliberations we have not stopped there. We have gone on to pose to ourselves the following issue: let us suppose that the Industrial Tribunal had no option but to find the terms of the letter of December 1992 to be void, what other terms should be put in their place? That raised the key question; who employed Mr Al Sudani and from what date. Focusing upon that issue, this Tribunal directs itself that employment and the identity of an employer are respectively issues of mixed law and fact. Those issues are to be discerned from a substantial number of cases bearing upon this problem; cases arising with respect to various exercises of relevant judicial discretion. It is, however, axiomatic that employment is to be discerned by a reference to a number of indicia. There are, as the Courts have identified over the years, a number of factors which bear upon the questions as to whether there is employment and as to the identity of the employer. Reverting to the case that is currently before us, we are concerned to look at, first, the power to employ; second the question as to whether that power has been purportedly exercised; third, the hiring of Mr Sudani; and fourth, the dismissal of Mr Sudani. Averting to the other factors bearing upon our mind, who paid him? Who had a right of control over him? And who further was responsible for his safety when acting in the course of his employment? All those factors are factors which in our judgment should be brought to bear upon this particular issue. We remind ourselves that currently there is no evidence upon which to base the consideration of those factors, save for the two letters already referred to and that which can be discerned from them. On the basis of those two letters, it is manifest that West Essex Health Authority have a strong claim to be the employers of Mr Al Sudani, initially from 6 January 1992 and subsequently from 6 January 1993. As a health authority, that body undoubtedly had power to employ Mr Al Sudani and on the face of the letters they were exercising that power. They were the employing authority as identified in the Terms and Conditions of Service already referred to. Yet further in the event, it was that authority who hired Mr. Al Sudani and ultimately, it was that authority who dismissed him. Yet further, it was that authority that paid him and it was that authority which in the body of the letter, established its machinery for its control and established further, the machinery to deal with grievances and discipline.

On the face of it, therefore, there is a powerful case albeit on unlimited evidence for putting forward West Essex Health Authority as the employer and a correspondingly powerful case for taking the date of commencement of employment to be 6 January 1993 with the only alternative apparent case being 6 January 1992. Not so, submits Miss O'Rourke. Her case is that the employer was the Secretary of State and she bases that submission initially upon the National Health Service Act 1977 and in particular on Section 1 and 2 thereof. Section 1 reads:

"1 (1) It is the Secretary of State's duty to continue the promotion in England and Wales of a comprehensive health service designed to secure improvement- (a) in the physical and mental health of the people of those countries, and (b) in the prevention, diagnosis and treatment of illness,

and for that purpose to provide or secure the effective provision of services in accordance with this Act.

(2) The services provided shall be free of charge except in so far as the making and recovery of charges is expressly provided for by or under any enactment, whenever passed.

2 Without prejudice to the Secretary of State's powers apart from this section, he has power-

(a) to provide such services as he considers appropriate for the purpose of discharging any duty imposed on him by this Act; and

(b) to do any other thing whatsoever which is calculated to facilitate, or is conducive to incidental to, the discharge of such a duty..."

Submits Miss O'Rourke, in particular on the basis of the latter Section, that the Secretary of State has the widest possible powers to further the aim set out in Section 1 and that as a matter of law, those powers must include the power to employ, notwithstanding that that is not expressly provided for in the Section.

The second submission is that in exercise of that power, he has acted as employer of, amongst other persons, Mr Al Sudani. She would submit that the exercise of that power is effectively as an undisclosed principal in the name of West Essex Health Authority. In making this submission, she maintains that means that he is the employer for the purposes of the 1978 Act. She would distinguish his role from that of "a holding company" in as much as she recognises that a holding company does not employ for the purposes of the Act, employees of subsidiary companies, hence various provisions in the Act to deal with that situation. "No" she says, "his position is to be distinguished from that of a holding company; he is the employer for the purposes of the Act and therefore, turning to Section 64, one's concern is the period of continuous employment with him, that is, with the Secretary of State."

That then leads to her final submission that is Mr. Al Sudani has been in that same continuous employment, since 1 August 1990, that is, from the date on which he returned from other activities into regular full-time employment with the National Health Service. Thus it is, she submits, the period of continuous employment as at 29 June 1973 will exceeded the minimum two years.

Those then are the bold proposition advanced by Miss O'Rourke. We are only able, presently to deal with them so far as we can as propositions of law, having regard to the comparative absence of any factual basis in the Reasons as propounded by the Industrial Tribunal, but we are first, entirely satisfied that Section 2 of the National Health Service Act 1977 does not give the Secretary of State a power to employ a hospital doctor. First, it does not say so. Second, no such power is in our judgment, implicit in its terms and third, the exercise of any such power would be inconsistent with the balance of the Act. In the judgment of this Tribunal, the scheme created by the Act, involves employment being devolved to health authorities which are plainly, from the balance of the Act, the instruments with which the Secretary of State achieves the ends that have been set him by Parliament. We entirely accept that the Secretary of State inevitably has an oversight over the activities of authorities and in particular, he has an oversight over the expenditure of public money, which in its turn must inevitably mean an oversight over the standard terms to be introduced into the contracts of employment for hospital staff. But that is, in our judgment, a long way away from making him an employer of any such member of his staff. We are entirely satisfied that that notion was not created by the Act and indeed, it is plain on the face of the Act, that it was precisely the opposite that was intended and achieved in the statute. We refer first, to Schedule 5 of the Act, paragraph 10 which reads as follows:

"10. (1) Subject to and in accordance with regulations and such directions as may be given by the Secretary of State, an authority...may employ such officers as it may determine at such remuneration and on such conditions of service as it may determine; and regulations and directions under this sub-paragraph may contain provision..."

Plainly, that provision gives the power to an authority to employ; plainly it is the absence of any like provision that tells us that the Secretary of State does not have similar powers. So as soon as one then turns to the product of that paragraph in terms of directions, that is, the terms and conditions of service, therein there is a constant contrast drawn in terms between "the employing authority" and the Secretary of State; a contrast which reflects the role of the former in employing the staff, the role of the latter in having an oversight over the National Health Service, not acting as an employer.

Yet, further in our deliberations on law, we have considered the logically following proposition. Let it be supposed that Miss O'Rourke is right and that there is a power provided by Section 2 of the 1977 Act to employ hospital staff. Turning then to such facts as there are in this before us, it would seem that that power in the instant situation at least is being exercised by the Secretary of State through an apparent "agent" that is the West Essex Health Authority. Assuming that to be the state of affairs and noting, incidentally, that it is only the authority that is referred to in the letter and it is only the authority that emerges from the terms and conditions as "the employing authority" , the question is immediately raised as to which of the two bodies, Secretary of State or Authority is "the employer" for the purpose of the 1978 Act.

To this Tribunal, it seems to manifest that the answer to that question is that the employer is the apparent "agent" , that is, the West Essex Health Authority. How do we arrive at that conclusion? Well first, we look at the written particulars provided by in accordance with Section 1(2). The parties, as identified for that purpose, were the West Essex Health Authority and Mr Al Sudani. Then further, we turn to Section 54 itself. Mr Al Sudani complains that he has been unfairly dismissed by his employer. His IT1 specifies the Authority as his employer and Miss O'Rourke pressed in the course of argument, was understandably forced to concede that the employer for that purpose was the West Essex Health Authority inasmuch as the Secretary of State has not dismissed her client. Indeed, but for a problem about entitlement, her client would have had an Appeal from the Authority to the Secretary of State pursuant to paragraph 190 of the Terms and Conditions, with respect to his dismissal. Let it then be assumed that the West Essex Health Authority is the employer for the purposes of Section 54, what then of the employment referred to in Section 64 itself? Miss O'Rourke was forced to submit that for that purpose, the employment changed. We were now no longer concerned with employment with the West Essex Health Authority, but now with a totally different employment and that is with the Secretary of State. One has only to cite that conflict between two sections within the same part of the Act and, relevant to the same aspect of the Act, that is, unfair dismissal, to appreciate that her argument as to law simply does not stand up to examination.

On that our view is quite clear so that as a matter of fact (so far as there is fact before us) and as a matter of law, there was here only one employer and that was West Essex Health Authority and further, the term of continuous employment on the evidence presently before us, started on 6 January 1993. This Tribunal could have anticipated a serious issue arising, had it been appropriately investigated as a matter of fact by the Tribunal below and that is as to whether that material employment started on 6 January 1993 or 6 January 1992. We can express no further views about that issue, given that there was no proper investigation of it by the fact finding Tribunal, but we comfort ourselves that even if there had been any such investigation, the issue was not material for the purposes of the application made by Mr Al Sudani.

Thus it is, having given the best attention we can to submissions of Miss O'Rourke, we find ourselves forced by different routes to allow this Appeal. We would like, however, some assistance as to what course we should now take.