Parceline & Anor v Darien & Anor [1995] UKEAT 107_95_0410

EAT
Parceline & Anor v Darien & Anor
[1995] UKEAT 107_95_0410 · 1995-10-04
MR JUSTICE MORISON : By a unanimous decision which was entered in the Register on 16th December 1994, an Industrial Tribunal sitting at Bedford held that Patrick and Clyde Darien who are both black were unlawfully discriminated against on the grounds of their race.There are two issues raised by this appeal.The background facts relating to them may be shortly stated. The Darien brothers worked for Parceline the well known parcel collection and delivery company from its depot at Rushden. The terms under which Patrick Darien did his work is relevant to the first issue which arises on this appeal, namely whether the provisions of the Race Relations Act 1976 applied to his contractual relationship with the company.Parceline employs some drivers and owns some vans, but part of its work is performed for it by means of contracts entered in to with drivers, described as owner/drivers in the standard form agreements. Parceline also engages a number of people to work for it on a casual basis, either as a regular casual or as what might be loosely called a `casual casual'.Patrick Darien entered into an owner/driver agreement with Parceline. The contract is described as an "Owner/Driver Contract for Services". The contract contains a description of the vehicle to be used, and its registration number. Effectively, under the contract the person named as owner/driver (in this case Patrick Darien) agrees to provide the vehicle, and to put it neutrally, a driver to undertake delivery and collection duties as required by Parceline.Patrick Darien and his father traded under the registered business name "Darien and Darien Transport". The contract referred to this partnership name. With Parceline's consent, Patrick's brother Clyde drove the vehicle on two of the five days of the week during which the vehicle was provided. Thus Patrick Darien drove the vehicle on Mondays to Wednesdays, his brother on Thursdays and Fridays. This was a set pattern. Clyde Darien worked for Parceline as a regular casual on the three days his brother was driving and this also was a set pattern.It was common ground between the parties on this appeal that neither of the two brothers was an employee for the purposes of the 1978 Act, which defines employment as:

"Employment under a contract of employment."

and a contract of employment as:

"A contract of service or apprenticeship."

An Industrial Tribunal had previously held that Patrick Darien was not an employee, and there is no appeal from that decision. However, in the course of it the Industrial Tribunal placed great emphasis on their conclusion that the owner/driver contract did not require Patrick Darien personally to execute any work under it. That was not a finding which was strictly necessary to their conclusion that he was not an employee, but it clearly played an important part in their reasoning.However, the discrimination legislation is more widely based. Section 78(1) of the 1976 Act defines employment as:
"... employment under a contract of service or of apprenticeship or a contract personally to execute any work or labour, ..."
The first question at issue is whether Patrick Darien worked for Parceline under a contract personally to execute work or labour. The Industrial Tribunal which comprised the same Chairman and one of lay members which had made the earlier decision, concluded that he was. They said this in paragraph 5 of their decision:
"5. We are satisfied that there is jurisdiction to hear the complaint on the basis of the findings made by the tribunal during the preliminary hearing that Mr Patrick Darien was a self-employed sub-contractor who, whilst not having to personally perform all the work under the contract, nevertheless, did perform the bulk of that work, merely employing a substitute from time to time. In any event, we are equally satisfied that the nature of the relationship between Mr Patrick Darien and Parceline falls within the ambit of Section 7 of the Act ..."
That finding is challenged by Parceline on this appeal.It is not entirely clear whether the Industrial Tribunal are saying that Patrick Darien was obliged personally to perform some of the work, or whether he was not obliged personally to perform any of it, but nonetheless did so. We think there is force in the criticism made of this paragraph by Mr Chowdhury on behalf of Parceline. He makes the point that, essentially the same Tribunal had earlier concluded that Patrick Darien was not under any contractual obligation to do the work himself.It was common ground between Mr Chowdhury and Miss Hyde on behalf of the respondents to this appeal, that the proper test to be applied of the language to the statute has been helpfully formulated in a decision of the Court of Appeal in Mirror Group Newspapers v Gunning [1986] ICR 145 . At page 151 B Oliver LJ, said:
"In my judgment, what is contemplated by the legislature in this extended definition is a contract the dominant purpose of which is the execution of personal work or labour, ..."
At page 156 letter F Balcombe LJ, said:
"In my judgment, one has to look at the agreement as a whole, and provided that there is some obligation by one contracting party personally to execute any work or labour, on then has to decide whether that is the dominant purpose of the contract, or whether the contract is properly to be regarded in essence as a contract for the personal execution of work or labour, which seems to me to be the same things in other words."
The ratio of this decision is binding upon us as it was upon the Industrial Tribunal. It seems to us that what must be looked at are the terms of the contract as a whole, and to ascertain whether essentially it amounts to a contract for the personal execution of work or labour, or not. Contracts do not always spell out with clarity what is expected under them. Further the employment relationship is dynamic and changes may occur in the working relationship, which to a lawyer, but often not to the parties may amount to a variation of the underlying contract of employment. Whilst what happened in practice may be an indication of what the contract required, especially where the contract itself is not entirely clear, it would be contrary to logic, authority and principle for a Tribunal to reason that because personal work was regularly executed in purported fulfilment of the contract, the contract required it. The personal execution of work is a necessary but not a sufficient condition in the sense that all persons who are under a contract personally to execute work will personally do such work, but not all persons who do such work are under such a contract. What matters is what was in the minds of the parties at the time the contract was made, judged objectively having regard to the words used by the parties to the contract, and to the relevant surrounding circumstances. The relevant provisions of the contract are not spelt out in the decision with which we are concerned. Recognising that what the Industrial Tribunal had said was not satisfactory, Miss Hyde invited us to look at the written contract and form our own view as to it predominant purpose having regard both to its terms and to the way it worked in practice and we were helpfully provided with a copy of it.Having looked at the contract, we are all of the very clear view that its predominant purpose was the provision by Patrick Darien of personal services. The contract describes itself as a `contract for services by Patrick Darien'; it expressed itself as being a retainer of his services; his services are to be rendered as an owner/driver; he is to be provided with a uniform which he is required to wear when carrying out work under the contract. Clause 8 says that Patrick Darien is self-employed, and clause 9 deals with Patrick Darien's Health & Safety obligations. Clause 12 refers to:

"... the service you provide ..."

and clause 14 provides that:
"... you as owner/driver are under no obligation to accept work when it is offered."
Clauses 19 to 21 are personal obligations, and clause 22 is a covenant against disclosure of confidential information which is imposed upon Patrick Darien as owner/driver.It seems to us clear that when looked at as a whole, this was a contract requiring Patrick Darien to render personal services to Parceline in the named vehicle. None of the provisions of the contract to which we have referred is consistent with the contract being for the provision of a vehicle and driver. For example, any driver other than Patrick Darien would not be bound by the covenant against confidentiality.Mr Chowdhury invited us to the view that the predominant purpose of the contract was the collection and delivery of parcels, but as it seems to us that purpose can be described as the ultimate purpose for which Patrick Darien's personal services were being rendered. The true choice is between this being a contract for Patrick Darien's personal services on the one hand, or a contract for the provision of a vehicle and driver on the other. In either case the ultimate purpose is the collection and delivery of parcels, and the existence of such a purpose does not distinguish one case from the other. When faced with the true choice, we have no difficulty in concluding that the contract was for the personal performance by Patrick Darien of duties as an owner/driver of the specified vehicle. We were not persuaded that the express contractual position had been effectively superseded by Clyde Darien's involvement. There is no provision in the contract for the work to be performed by any one other than the named driver. There is insufficient material before us to enable us to say whether Clyde's involvement was by way of variation of this contract, or by reason of a new and separate contract between him and Parceline. We are inclined to agree with Mr Chowdhury that the latter was less likely than the former. But the fact remains that Patrick Darien was the only driver for the Monday to Wednesday period and his brother for the other two days. To that extent, Patrick Darien was under an obligation to render personal services for the first three days of the week on an exclusive basis, and that would satisfy the test in the Mirror Group case.Accordingly on the first issue, we conclude that the Tribunal reached the correct conclusion, although we would respectfully adopt different reasoning from them.As to the second issue, Mr Chowdhury accepted that he had to show that the Tribunal's conclusion that Patrick and Clyde Darien had been discriminated against on the grounds of race was perverse.We do not consider that the Tribunal's conclusions on this issue can be faulted. The complaint made by the two brothers arose from the way their services were dispensed with by the company. In paragraph 9 of their decision the Industrial Tribunal said:
"9 With this in mind we approach that which occurred in this case. It is clear to us from the evidence before us that there were no complaints of any substance against Mr Patrick Darien nor indeed against Mr Clyde Darien. Had there been serious complaint the first respondents would have had the sanction of terminating the owner driver contract. The respondents were faced with having to reduce from 5 to 2 the number of owner drivers at the Rushden depot. The respondents were unable to show us how the 3 owner drivers were selected. There was no objective measurement of productivity nor did the respondents appear to have taken experience and length of service into consideration, even although this was an important factor in their deliberations, so they told us. We have reminded ourselves that this is not a case of selection for redundancy where an employer must show that his selection of an employee is not based merely on personal likes and dislikes. Mr Patrick Darien, who is black, and two white owner drivers, Messrs Williams and Tipper, were all selected to go. However, Mr Williams was known to have secured a position as an owner driver in Birmingham before the 6 September, being the date of the implementation of the geographical changes at the Rushden depot and Mr Tipper was working as a casual for the respondents from the 6 September. In those circumstances, 3 owner drivers may well have been selected at the same time but the fact remains that only Mr Patrick Darien of the 3 so selected was left further work. We feel that the proper inference to draw from this is that Mr Patrick Darien was discriminated against on the grounds of his race for we can find no other explanation put forward with any conviction by the respondents. As for Mr Clyde Darien, again there were no criticisms of substance against him and even although casual work was clearly available on Monday 6 September, and Mr Prickett knew that there was more work than had been anticipated, Mr Clyde Darien was told that there was no work available for him and that he should wait to be contacted. He was never so contacted and, bearing in mind that casual employees are still used by the respondents and indeed have been since the date of the reorganisation we find it incomprehensible that no work was offered to Mr Clyde Darien and in those circumstances we infer that he too was discriminated against on the grounds of his race."
We cannot fault the reasoning of the Industrial Tribunal in relation to either `employee', and to be fair, Mr Chowdhury very properly felt unable to pursue this part of the appeal in relation to Patrick Darien.The essence of the reasoning of the Industrial Tribunal is visible from the passage we have quoted. In each case the Tribunal looked for a rational explanation for their treatment other than race. In neither case could such a reason be found. In those circumstances the Industrial Tribunal was fully justified in inferring that race must have played a part in their treatment. Such a conclusion was entirely in line with well known authority (see for example Noone ). We consider that the Tribunal's decision on this point was a model of its kind.We cannot leave this case without recording out gratitude to both Counsel for their excellent skeleton arguments and for the way they deployed their oral arguments. This was a very well presented and argued appeal on both sides, and we are grateful to them.

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MS C HYDE : Sir, can we have an order for legal aid taxation?

MR JUSTICE MORISON : Yes you may have such an order.