Keith Carter & Co v Trotter [1995] UKEAT 388_95_0606

EAT

Keith Carter & Co v Trotter

[1995] UKEAT 388_95_0606 · 1995-06-06

JUDGE SMITH QC :

This is an appeal by Keith Carter & Co, a firm of solicitors, against the decision of an Industrial Tribunal sitting at London (South) on 7th December 1994, whereby the Industrial Tribunal held unanimously that the applicant before the Industrial Tribunal, Miss Heather Trotter, a newly admitted solicitor, had been an employee of the respondent firm and the Industrial Tribunal made a declaration accordingly under the Wages Act 1986 that she was entitled to a sum equal to 25/31st's of £800.00 for the period 1st - 25th May 1994, which she had actually worked and ordered the respondent firm to pay that sum to her, that sum being £645.16.

We have to decide today whether or not there is an arguable point of law justifying the appeal of the firm of solicitors, who are appellants before us, proceeding to a full hearing. We have heard submissions this morning from Mr Kesaria, who has put his case very clearly and helpfully before us.

The parties are both solicitors, and the issue before the Industrial Tribunal was whether the applicant before them was employed by the firm or whether she was self-employed, that was main issue before the Industrial Tribunal. The applicant submitted that she was an employee, and had been an employee from the beginning on terms that were originally "commission only" terms, but which had been varied at the end of February 1994 or thereabouts, to an arrangement whereby she was employed on the basis that she should receive a salary at £800.00 per month, and, hence her claim to 25 days out of the 31 for the month of May that she had actually worked being that proportion of that monthly salary.

It was the respondent firm's submission before the Industrial Tribunal that she was self-employed, on the basis that she was to get paid commission as and when it was earned, and that any payments made to her were advances against commission. Those were the rival contentions that were made before the Industrial Tribunal.

The Industrial Tribunal held, as we understand their reasoning, that she was an employee, and, in particular, they held on the dispute of fact, as we understand their decision, that there had been a variation which had the result, as they express it, at the end of paragraph 11 of their decision, to the effect that they found:

"... the Tribunal finds that the Applicant was an employee of the Respondent, initially on remuneration to be calculated on a commission basis but altered before the end of February to be on a basis of payment of £800 per month."

And they make it clear in paragraph 12 what they mean by the expression "on a basis of a payment of £800 per month", when they say:

"The Tribunals finds that the payment of £800 was for a calendar month but that the salary would be calculated on a day to day basis so that the outstanding payment (regarded as an unlawful deduction for the purpose of the Wages Act claim) would represent only for days worked and would therefore be a sum equal to 25/31 of £800 i.e. £645.16."

We have listened to the submission made to us, the first submission being to the effect that there was common ground, so to speak, that the applicant was originally to be paid on a "commission only" basis. Well that is quite true, there was common ground to that effect, and the Tribunal rightly so found, that that was the original arrangement. But it does not follow from thatat all, in our judgment, contrary to the submission that was made to us, that because the applicant was employed on a commission only basis that that was not an arrangement that amounted a contract of service so that she was employed on a commission only basis. It is common experience of course for people to be employed as employees on the basis that they only receive commission, so we cannot agree that there is any force in the submission which was made to us that, in some way, because of that common ground, the burden of proof shifted on to Miss Trotter in any way to establish that she was an employee. On the contrary, in our judgment, there was nothing inconsistent between her being paid on a "commission only" basis and her being an employee. Commonly, employees are paid on a "commission only" basis.

Then there was a second point made, to the effect that there was no deduction of tax or national insurance made from these payments made each month, which is correct, but that is only one factor to be taken into account by an Industrial Tribunal, as a fact finding Tribunal in deciding on which side of the line any given relationship falls.

Then it is submitted that there was a letter written contemporaneously by the solicitors, by Mr Carter, a letter written on 18th March 1994 which sets out the original arrangement, in the first two paragraphs, and then the variation in the third paragraph. It is right to say that that letter does put forward the contention that was clearly advanced by Mr Carter at the hearing, to the effect that the payment of £800.00 per month was an advance against commission. It is submitted before us that the Tribunal should have given far more weight to that contemporaneous letter, on the one hand, as against the oral evidence that was given before the Tribunal on the other hand. It being pointed out to us, correctly as far as we know, that there was no letter sent by Miss Trotter disputing that way of putting the matter as set out in Mr Carter's letter. However, in our judgment, it must be entirely a matter for the Industrial Tribunal to decide what weight it attaches to that kind of disputed question of fact. Sometimes letters written quite close to the event can be very powerful, but equally, sometimes, oral evidence can be very powerful. Here it is quite clear from their decision that the Industrial Tribunal preferred the oral evidence given before them in relation to the correct characterisation of the £800.00 per month. They concluded, as, in our judgment, they were entitled to do, that the £800.00 per month should be characterised as salary and not as an advance against commission.

Then next it is submitted that there was far too much weight given to the label on the notepaper, describing Mr Harris, who was involved in this matter, as an associate solicitor on the one hand, and the contrast that the Tribunal made between that description of Mr Harris, as an associate solicitor, and the description of the respondent before us, as an assistant solicitor, on the other hand. But, in our judgment, the Tribunal were careful to direct themselves in paragraph 9 that they were:

"... concerned with the actual status of individuals not with the labels ..."

They directed themselves correctly, as a matter of law in that respect, and then simply concluded, provisionally, as they put it, that normally an assistant solicitor, in their experience, would be an employee. They put it in this way at the beginning of paragraph 11:

" On the face of it, the Tribunal would consider that someone named as assistant solicitor would normally be an employee."

In our judgment, they were fully justified in stating the matter in that way.

Then it was submitted to us that in this case the Industrial Tribunal gave too much weight to matters relating to control. We cannot agree with that submission. Of course no one test is ever decisive, but control is always an important matter of consideration, and even assuming, as we do, that there are requirements that solicitors who have been admitted for less than three years should be subject to control, in various ways, as Mr Kesaria had correctly no doubt pointed out to us, nevertheless, in our judgment, the Industrial Tribunal were fully entitled to give some weight as they did to the aspects of control, which they illustrate in paragraph 11 on their decision.

We have reminded ourselves that it is now clearly established that the question of whether or not a person is employed or self-employed is usually to be regarded by an appellate court as a question of fact to be determined by the trial court, in this case, of course, the fact finding tribunal, the Industrial Tribunal. That, in our judgment, is clearly established by recent authorities of which Lee Ting Sang v Chung Chi-Keung [1990] PC ICR 409 is the most important example, especially perhaps from Lord Griffiths judgment at page 415 at C and D:

"The decision will depend upon the evaluation of many facts and there will be many borderline cases in which similarly instructed minds may come to different conclusions. It is in such situations that an appeal court must not interfere and it is in this sense that the decision is said to be one of fact."

That is in reference to a decision as to whether somebody was an employee or an independent contractor.

Looking at the matter in that way, it is apparent to us that we must look at the Industrial Tribunal's decision, and can only upset it, or allow the matter to be argued that it should be upset, if the Industrial Tribunal has or may have misdirected itself in law, or although correctly directing itself, has or may have reached a decision which it could not reasonably have reached on the facts. Looking at this particular decision we are quite satisfied that there was ample material here on which the Industrial Tribunal could reach the conclusion which it did reach. As far as we can see, looking at the matter carefully, as we have done, there is no hint of any misdirection of law. On the contrary, in our judgment, the Tribunal correctly directed themselves with regard to the law, and reached findings of fact which they were justified in reaching in the light of the evidence which was before them. Accordingly of the view here, despite the able submissions that have been presented to us this morning, we are unanimously of the view that there is no arguable point of law that arises with regard to this appeal, and so for the reasons that I have given, the appeal must be dismissed.