Simms & Anor v Tanner & Hall Ltd [1996] UKEAT 1098_95_0406

EAT
Simms & Anor v Tanner & Hall Ltd
[1996] UKEAT 1098_95_0406 · 1996-06-04

JUDGE HULL Q.C. :

This is an appeal to us by Mr Simms and Mr Taylor from a decision of the Industrial Tribunal sitting at Bury St Edmunds under the Chairmanship of Mr Rees, with two industrial members, which sat there on 16th August 1995, their decision being registered on 4th September 1995.They tried a preliminary issue whether Mr Simms and Mr Taylor, who were workers in the scaffolding part of the construction industry, were indeed self-employed and therefore not qualified to make a complaint of unfair dismissal, or whether, on the other hand, they were employed people.Now it is well settled that for those purposes no court or tribunal is bound by the label which the parties choose to put on their relationship. People cannot make the relationship of independent contractors, which is what self-employment is, simply by saying that theirs is such a relationship. Equally they cannot create a contract of employment, simply by saying that that is what their relationship is. It being a matter of status like other relationships, in particular the relationship of landlord and tenant, the question whether (to use the old-fashioned language) there is a relationship of master and servant, or in more modern language employer and employee, is one which has to be looked at in the round on the basis of all the facts. Of course if there is a written agreement, the court must look first and foremost at the written agreement and say what it means, and then say (if this is a contention), whether it represents reality or whether it is simply a sham, the parties did not intend to be bound by it. In particular, one thinks of the cases relating to the Church of England and to other churches, such as the Presbyterian Church, in which the terms of employment of a minister of religion or curate are set out in documents. There are of course other occasions in which a contract of employment as it may be called or a contract for services on the other hand as it may be called, is reduced to writing, then the court looks first and foremost at what may be a long and detailed document to see exactly what the relationship of the parties was. If they are advised properly by lawyers or trade union officials who know what they are doing, then obviously what the parties say about it in their agreement may well be of paramount importance. It can never be conclusive because the tribunal has to look at all the facts.Now here this tribunal, dealing with this question, went through a great many of the facts because this was not one of those cases in which the parties had reduced their relationship to a detailed agreement which could be looked at first and foremost. They found, amongst other things, that each of these gentlemen had been treated as self-employed for purposes of revenue and national insurance. Those facts again would not be conclusive, because people sometimes do arrange their affairs not in good faith, perhaps deliberately intending to pay less tax than they should and putting a false label on the relationship. The tribunal went through the facts. Amongst other things they say that the employees were given a price for a particular job and if they finished early and did not work the full hours on that particular job, they could take any extra monies earned as a bonus, and decide either to go to the next site or take some time off and not work.It is the view of my colleagues who sit with me that that by itself could not possibly be conclusive, there are many tasks in which an employee is entitled as soon as he has finished the job to go off and take his day's pay. The tribunal no doubt should have considered that, and so far as we can see did consider that as one of the many facts in the case.Mr Taylor, of the two appellants, preferred to take six or seven weeks holiday each year. He preferred not to be engaged in any additional hours of work. He had apparently another business. The tribunal observe that one of the appellants employed his wife, he paid his wife wages for doing his books. They say as a finding of fact:
"It is quite apparent that the applicants worked on the basis that the respondent company were not obliged to give them work and the applicants could refuse to work. For practical purposes this had not occurred over the years but this quite clearly was the understanding between the parties on that particular point."
That is a decision of fact, we are not entitled to go behind decisions of fact, except in so far as it said, as it is here, that this was a perverse decision and one which no Industrial Tribunal properly directing itself could have arrived at. In other words, it was not a permissible option for the Industrial Tribunal.As I said, it is a careful and detailed decision. Amongst other things going through all the facts, they say:

"neither applicant had ever received any contract of employment"

They then referred to some of the very many authorities on this point. They refer to O'Kelly v Trusthouse Forte , Wyatt & Sons Limited v McCarthy and Readymix Concrete South East Limited v Minister of Pensions and National Insurance where it was said:
"Essentially there are three questions to be answered.
1) Did the worker undertake to provide his own work and skill in return for remuneration?2) Was there a sufficient degree of control to enable the worker to be fairly called a servant?3) Were there any other factors inconsistent with the existence of contract of service?"They cite from Young & Woods Limited v West where Lord Denning MR said:
"If the parties deliberately arranged to be self-employed to obtain tax benefits that is strong evidence that this is the real relationship."
They referred to the decision of the Court of Appeal in Hall and H.M. Inspector of Taxes v Lorrimer where that court agreed with the view expressed by Mummery J, the President of Employment Appeal Tribunal:
"It is not a mechanical exercise of running through items on a check-list to see whether they are present or absent from a given situation. The object of the exercise is to paint a picture from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted by viewing it from a distance and by making an informed, concerned, qualitative appreciation of the whole."
Then they say in paragraph 13:
" The tribunal has looked at the overall picture and this shows that the applicants throughout all the time they worked for the respondent decided how to carry out the scaffolding work, could have refused to work, were not guaranteed work by the respondent, determined when to take their holidays, worked to a priced job and could take time off if they finished such job early and treat any balance of the money to be paid for the job as a bonus, provided their own small tools and protective clothing apart from specialist jobs, were responsible for arranging their own pensions, ran their own business bank accounts, received no holiday pay or sick pay, paid their own tax and national insurance and engaged their own accountant to prepare their business accounts; the applicants, however, worked for the respondent for many years and for no-one else and the respondent supplied the scaffolding and provided the ladders to be used in the scaffolding work and the applicants usually used a lorry belonging to the respondent to take them to their place of work.
14. As a question of fact, and on the balance of probabilities, the tribunal having taken into account all the evidence and all of the above factors in this case and considering the overall picture is satisfied that the applicants in this instance, were not "employees" under the provisions of Section 153 of the 1978 Act but independent contractors and working under contracts for services and providing their own work and skill for remuneration."Now that was their finding of fact. As I say, we are pressed by Mr Tobin, who put the matter very moderately and fairly, we are very grateful to him, with the contention that this was a conclusion which the tribunal were not entitled to reach. He said that 99% or, at any rate, 90% of those who were called self-employed in the construction industry were in truth employees. That seems to us to be something which we are not concerned with. What we are concerned with is the question whether the tribunal were as a matter of law entitled to reach the conclusion that they did. We think they considered what appear to us to be the material factors, and as Mummery J said it is a matter of looking at those factors to see what they add up to as a picture. Of course it may be the fact that one tribunal may perceive a different picture from another, but as long as they do their duty and direct themselves in accordance with law, it is a decision of fact for them. I will just cite from one of the authorities to which we were referred Lee v Chung [1990] IRLR 236 , there the Judicial Committee of the Privy Council said at page 239.12:
" Whether or not a person is employed under a contract of service is often said in the authorities to be a mixed question of fact and law. Exceptionally, if the relationship is dependent solely upon the true construction of a written document it is regarded as a question of law: see Davies v Presbyterian Church of Wales [1986] IRLR 194. But where, as in the present case, the relationship has to be determined by an investigation and evaluation of the factual circumstances in which the work is performed, it must now be taken to be firmly established that the question of whether or not the work was performed in the capacity of an employee or as an independent contractor is to be regarded by an appellate court as a question of fact to be determined by the trial court."
We of course are an appellate court, more than that, we are required by the Statute which created our jurisdiction to decide only questions of law.We have all come to conclusion that whether or not we would have reached the same conclusion as this Industrial Tribunal, or whether or not another Industrial Tribunal would have reached the same conclusion, we are unable to say that it discloses an error of law. So in those circumstances the appeal must be dismissed.