H & J Quick Ltd (t/a Quick Co) v Ball [1997] UKEAT 964_96_0306

EAT
H & J Quick Ltd (t/a Quick Co) v Ball
[1997] UKEAT 964_96_0306 · 1997-04-15

JUDGE PETER CLARK :

This is an appeal by the employer, Quick Co, against a decision of a Chairman of Industrial Tribunals sitting alone at Manchester on 10th May 1996 that the respondent employee, Mr Ball, had been continuously employed by the appellant for a period of not less than two years so as to qualify for statutory unfair dismissal protection under s.108(1) of the Employment Rights Act 1996 ["ERA"]. Extended reasons for that decision are dated 19th July 1996.

The Facts

The tribunal was concerned with three periods during which the respondent worked for the appellants.The first period was from 19th October 1992 until 31st May 1993. In October 1992 the appellant decided to close down its leasing operation ["TVL"]. It approached Clayton Management Selection ["CMS"] with a view to recruiting an administrator/administration manager. CMS introduced the respondent, who completed a successful interview and commenced work with the appellant on 19th October 1992.During the first period the appellant paid CMS a fee and they in turn paid a daily fee to the respondent. The Chairman found that during the first period the respondent was not employed by the appellant under a contract of service. There is no cross-appeal against that finding.The second period was from 1st June 1993 until 2nd May 1995. From 1st June 1993 the appellant accepted that the respondent was employed by it under a contract of service. He was put on the books. He received the usual employee's benefits such as holiday pay, health insurance, sick pay, pension benefits and the like.During the second period the TVL work was diminishing. In April 1994 the respondent took up the position of office manager. The TVL work continued to form a small percentage of his duties.The third period extended from 2nd May to 28th June 1995.On 2nd May 1995 the appellant wrote to the respondent in these terms:
"Dear Keith,
As you know, Angus has been in contact with other Operations Directors with a view to seeing if there are any other suitable vacancies within the Group, I have now had a reply and unfortunately there is nothing currently available. The position of Office Manager at Quickco has been made redundant for the reasons already outlined and therefore we give notice of termination of employment with effect from the 2nd May 1995.There is however some residual work left on TVL, if you are interested in undertaking this on a contract basis, please let me know and I will ask Paul to contact you."The respondent replied on 3rd May 1995, stating:
"With regard to your offer of taking some TVL work on a contract basis as I stated at our meeting I will need consider this and will let you know of my decision in due course."
A total payment of £6,021.48 was made to the respondent by the appellant by way of a termination payment.The respondent was interested in the residual work on TVL. He negotiated a rate of pay for that work of £15 per hour home rate and £12.50 per hour office rate. That residual work was work of the kind he had carried out during the second period in addition to his duties as office manager. At a meeting with management shortly after 2nd May he was asked whether he would go as a self-employed person. The respondent declined and said he would prefer to stay on the payroll. The appellant agreed. He remained on the payroll and for the five days on which he worked on TVL for the appellant during the third period he received payment based on the appropriate agreed hourly rate. Those five dates were 17th, 24th May and 1st, 23rd, 28th June 1995. On those dates he worked between 6 and 10 hours per day.On 28th June he was informed that that would be his last day of work and in due course he received a form P45 from the appellant showing his leaving date as 28th June 1995.

The Tribunal decision

The Chairman correctly determined that the key question was whether the respondent could count the third period as continuous with the second period. If so, he had more than two years continuous service; if not, his claim failed.In answering that question the Chairman made the following principal findings:(1) that the relationship between the parties during the third period was governed by a continuous contract of service. He was an employee, not an independent contractor, throughout that period.Alternatively, if he was not continuously employed throughout the third period then:(2) continuity was preserved throughout the second and third periods by virtue of s.212(3(b) of the ERA, in that his absences from work during the third period were on account of a temporary cessation of work; alternatively(3) that he was absent from work during the third period in circumstances such that, by arrangement or custom, he was regarded as continuing in the employment of his employer, by virtue of s.212(3)(c) ERA.Accordingly he had more than two years continuous employment so as to found the tribunal's jurisdiction to entertain his complaint of unfair dismissal.

The Appeal

The first question is whether the Chairman's finding in paragraph 27 of the reasons that during the third period the respondent was employed under a contract of service is sustainable.Mr Carr, on behalf of the appellant, submits that it is not. First he submits that in paragraph 27.1 of her reasons the Chairman erred in finding that the factors which she there considered indicated a contract of service. There was no mutuality of obligation in the sense that the appellant was required to provide work and the respondent to do it. Nethermere v Gardiner [1984] ICR 612 . That is not what the Chairman found. Her finding was that there was no mutuality of obligation in that the respondent was not obliged to do the work if he found separate employment elsewhere. We infer from that express finding that the Chairman found that the respondent did agree to do such work as was provided by the appellant unless and until he found other permanent employment. He did not do so, and performed the work on each of the days that it was available until his last day of work on 28th June . We so conclude, bearing in mind the Chairman's self-direction at paragraph 12.6 of the reasons, and the factual findings made at paragraph 8.12.Secondly, he contends that in weighing the factors for and against a contract of service in paragraph 27.1 the Chairman overlooked her earlier findings in paragraph 25 of the reasons that during the first period of absence the respondent did not receive any holiday pay, pension benefits, profit related pay or use of company car, being benefits enjoyed by employees of the appellant, which contributed to her conclusion that during the first period the respondent was not employed under a contract of service. We cannot accept that compartmentalised approach to the Chairman's reasons. It is clear from her reference to work during the third period being on an "ad hoc" basis that she bore in mind that those benefits ceased on 2nd May 1995. She nevertheless concluded that on balance the relationship during the third period was that of employer/employee. That was a conclusion which as a matter of fact the Chairman was entitled to reach. O'Kelly v Trust House Forte PLC [1983] ICR 728 .Mr Carr next submits that even if the Chairman was entitled to conclude that work done on the five separate days during the third period was done under a contract of service, nevertheless the first of those days was 17th May. There is nothing to bridge the gap between 2nd to 27th May. Accordingly there was a break in continuity.In our judgment the answer to that submission is provided by Mr Nicholls. He points out that by s.212(1) ERA:
"(1) Any week during the whole or part of which an employee's relations with his employer are governed by a contract of employment counts in computing the employee's period of employment."
Here, the Chairman found that the agreement between the appellant and the respondent for TVL work to be done during the third period was reached "shortly after" the 2nd May. Once the contract was made, in our judgment, relations between the parties were governed by a contract of employment. The original contract was terminated on Tuesday, 2nd May. Thus, provided the new contract was entered into before Saturday, 13th May all relevant weeks up to the expiry of the two year period commencing on 1st June 1993 were covered by a contract of employment. We accept that this is a fair reading of the Chairman's finding that the agreement was reached shortly after 2nd May, there being no evidence as to the precise date of that agreement, and we hold that from the date of the agreement the parties' relations were governed by a contract of employment, even although the respondent was not required to work everyday. Colley v Corkindale [1995] ICR 965 , 971B-C. Employment Protection (Part-Time Employees) Regulations 1995 (SI.1995/31) .For these reasons we uphold the Chairman's conclusion that the respondent was continuously employed from 1st June 1993 until 28th June 1995, on the basis that the parties entered into a fresh contract of employment on or before 13th May 1995, which continued until terminated by the appellant on 28th June.Accordingly it is unnecessary to consider the Chairman's alternative findings made on the basis that there was no contract of employment in existence during one or more of the weeks in the third period.This appeal is dismissed.