Adkins v Secretary Of State For Employment [1994] UKEAT 861_92_2406

EAT
Adkins v Secretary Of State For Employment
[1994] UKEAT 861_92_2406 · 1994-06-24
HIS HONOUR JUDGE LEVY QC: For many years before it went into liquidation, Mr and Mrs G Adkins to use a neutral word, worked for, the Company known as Abbotsgate Printers Limited. The Company went into liquidation on the 21st October 1991 and on the Company going into liquidation Mr and Mrs Adkins each applied for redundancy payments. The Secretary of State for Employment opposed the application on the grounds that each of the two Applicants were not employees by the Company and therefore were not entitled to a redundancy payment. Mr Adkins was the Managing Director of the Company and held 99% of the issued shares from October 1991 until liquidation.There was a hearing of the applications of Mr and Mrs Adkins before an Industrial Tribunal held at Hull on the 19th August 1992 when the application of Mr Adkins was held to have failed and was dismissed.Mr Adkins appealed from that decision and the Notice of Appeal stated as his grounds:
"To sum up therefore, I believe that working within a limited company. I was an employee of Abbotsgate Printers Limited:
(1)I paid P.A.Y.E. as everyone else did.(2)I did work on a practical day to day basis doing mostly manual work as opposed to managerial duties.(3)I worked regular hours.(4)I was entitled to the normal wage and holiday structure as laid down by the National Graphical Union (of which I am a member!) as were the other printers who worked for Abbotsgate.(5)On the day of the liquidation of the company I was as sackable as everyone else!"Mr Forrest, who has appeared for Mr Adkins today, has submitted in an admirable skeleton argument that the series of cases on which different tribunals have considered whether an applicant is, or is not, an employee in the context of company law have all failed to take account of the well known decision of Salomon v. Salomon & Co. [1897] AC22 and the various cases, such as Catherine Lee v. Lee's Air Farming Limited [1961] AC 12 where analysis has been made under other Acts of Parliament when the words "worker" or "employee" are defined in a similar way to that found in the Employment Statute. In Catherine Lee at page 13 the definition of a "worker" is:
"any person who has entered into or `works under a contract of service . . . with an employer . . . `whether remunerated by wages, salary or otherwise.'"
This is a very similar to the definition in the Act which we have to consider.Mr Kilcoyne, who appears for the Respondent to this appeal has said such an approach is misguided. Every case turns on its own facts. He has referred us to the passage in "Harvey on Industrial Relations and Employment Law", Volume 3, at the foot of the page Q614, at the top of the page Q[309] and the paragraphs "Contract of Employment" thereunder. In relation to the decision in Catherine Lee v. Lee's Air Farming Limited itself, Mr Kilcoyne has reminded us what the question was before the lower Courts in New Zealand and we find that at page 18 of the judgment from the Court of Appeal:
"We interpret the question to mean `whether on the admitted facts of this case the deceased could `hold the office of governing director of the Company and also be `a servant of the company.' Their Honours answered: `the question in its amended form' in the negative."
and that was reversed in the Court of Appeal.With respect to Mr Forrest, we think that the wholesale attack on all the past cases is doomed to failure. In the cases when the word "employee" has been considered whether in the Industrial Tribunal or Employment Appeal Tribunal or the High Court, is of any person claiming to be an employee the contract between "employer and "employee" have been simplified by the question posed in the phrase used by Bristow J in Withers v. Flackwell Heath Football Supporters' Club [1981] IRLR 307:

"are you your own boss?"

It is one which is a useful guide to an industrial tribunal.It is one which demonstrates that the test known as the Salomon principle has no application in the test to be performed by the Industrial Tribunal.The attack on principle set on one side, Mr Forrest attacks the judgment of the Industrial Tribunal on two bases. First of all he says that they have not done proper tests. Secondly, if they have done the proper tests they have not come up with the right answer.As to whether they have done the proper tests, this relates to a passage in the Reasons which at paragraph 5 which reads as follows:
"The tribunal has to decide whether or not these 2 applicants were employees. There have been many tests to decide whether a person is or is not an employee. There is the control test as to whether a person is under the control of someone else as to the way and manner in which he carried out his work; whether he is part of the organisation; the method by which he is paid, is he paid under Schedule E or is he paid as a self-employed person? No one factor is conclusive and it is for a court of tribunal to decide on the balance as to whether a particular person salls into the category of an employee or a self-employed person."
It is common ground that before the Industrial Tribunal there were two decisions cited. The first, Eaton v. 1. Robert Eaton Ltd and 2. Secretary of State for Employment [1988] IRLR 83, was an appeal to the Employment Appeal Tribunal against a unanimous decision of an Industrial Tribunal held at Birmingham where:
"The Tribunal dismissed an application by Mr Eaton for a redundancy payment to which he claimed he was entitled because he was employed . . ."
and Sir Ralph Kilner-Brown OBE JP, giving the judgment of the Employment Appeal Tribunal commenced the judgment as follows:
"The appeal is yet another instance, of which there are far too many, of individual directors alleging that an Industrial Tribunal has failed to ask itself the proper questions when considering whether or not there was a contract of employment either express or implied and if express, whether it was oral or in writing. Over the years Industrial Tribunals, the Employment Appeal Tribunal and the Court of Appeal have approached the question whether or not there is a contract of service or an agreement to render services as a self-employed person by looking at various factors and assessing in which direction they point and coming to a conclusion on balance. If Industrial Tribunals carried out the same process with relation to alleged employment of a director by a company, there would be no grounds for appeal and many attempts to appeal would be stopped in their tracks.
Without presuming or intending to lay down principles or guidelines because every case depends on its own facts we have over the years been able to identify some of the factors which crop up in these cases."The other case which was cited below was a decision of the Employment Appeal Tribunal which is unreported. On 3rd June 1987 Garland J, sitting with two colleagues, gave an extempore judgment in J R Wilson v. Trenton Service Station Limited . There the Industrial Tribunal took the point that though the parties each thought a Director of the Company had been treated as an employee, on proper analysis (undertaken by the Tribunal) he was not for the purposes of the Act.

(H) of the judgment:

"The Tribunal rightly took the view that they had to look behind the label to see the reality of the situation. After very careful consideration and after having their minds directed to the proper approach in law, they came to the conclusion that the appellant was not an employee but that his status and position were consistent with his being a director and substantial shareholder running what was to a large extent his business.
Now I say that the Tribunal approached the matter in the right way; they considered carefully the statutory definitions of `contract of employment' - `employer' and `employee' - and indeed of `employment' going to the correct statutory source."and then the learned Judge and his colleagues referred to the cases to which they had been directed.It may well be that the Tribunal setting out its Reasons was less than full in setting out all that they had had regard to, but seeing what they say in the paragraph 5, set out above and seeing what they also say in paragraph 6, we have no doubt that they did properly direct themselves, that they did consider the correct questions, and that they did come to a conclusion which they were entitled to come to on the facts . That is not to say that if we were considering the same question we would have come to the same conclusion, but that does not entitle us to interfere with a finding of fact properly made. We have to ask "did the Tribunal clearly go wrong as a matter of law?" "Did it make any perverse findings of fact?" We have anxiously and carefully looked into the facts as found; we have looked at the Notes of Evidence to see if there was material there to support the facts found and we have come to the conclusion that there was no error made by the Tribunal below.In the circumstances, while we have every sympathy for Mr Adkins in his predicament, we have no alternative other than to dismiss the appeal.