Migrant Advisory Service v Chaudri [1998] UKEAT 1400_97_2807

EAT

Migrant Advisory Service v Chaudri

[1998] UKEAT 1400_97_2807 · 1998-07-28

JUDGE J HULL QC :

The judgment which I am about to give is the judgment of us all. This is an appeal to us by a charitable body called Migrant Advisory Service, which gives advice to immigrants in Southall. The Respondent to the appeal is Mrs Kulbinder Kaur Chaudri, a lady aged about thirty; she claimed was employed as an administrative assistant for 12 hours a week. She went in on Mondays, Tuesdays, Wednesdays and Thursdays, I believe it was, from 10 o'clock until 1 o'clock and she worked in the office.

At first, in the early part of 1994, she went in as part of her training: she was going for a national vocational qualification. After that, she said, she started to go in on a regular basis, from August 1994 until 12 September 1996 when her services, to use a neutral term, were dispensed with.

Mrs Chaudri claimed that between August 1994 and September 1996 she was, in fact, an employed person. She complained that she was dismissed when she told her "employers" that she was pregnant and she therefore wished to make a complaint of unfair dismissal and sexual discrimination on the basis of her dismissal, and she claimed compensation. The Migrant Advisory Service said that she was not employed at all, she was a voluntary worker.

The undoubted facts were fairly shortly stated. She had indeed been coming in during the period that I have mentioned. The hours were as mentioned. She was paid, at first, £25 a week, from August 1994 onwards and then, in April 1996 - when I believe the premises were changed - her wages, as she put it, increased from £25 to £40. So that was the situation.

Although she employed a legal representative Mrs Chaudri did not herself appear before the Industrial Tribunal which decided to try this question of employed or not employed as a preliminary issue, and sat in the person of Mr Rabin, its Chairman, on 2 September 1997. At this preliminary hearing Mr Rabin found that, indeed, Mrs Chaudri was employed and was not a mere volunteer.

As I say, the material was somewhat slender. Mr Rabin received the evidence of Mr Jones, the chairman of the organisation, and of Mr Sharma, the manager, and he was also shown a large number of petty cash vouchers covering, I think, 14 months towards the end of the period of alleged employment and those were in general labelled "voluntary expenses" and there was the £25 or, as the case might be, £40, authorised by Mr Gill, who was an advisor, or Mr Sharma the manager and, on occasions, signed for by this lady.

The Tribunal having heard that evidence had to decide what the situation was. Mr Rabin said that the issue for him was: was she a volunteer, only receiving expenses? On the other hand, he said, he had the statement signed by Mrs Chaudri - she was unable to attend and therefore he just read her statement. We too have seen her statement. We have been asked to read it: she set out her case, she set out the sums which she had received and in that statement she described herself as being an employed person.

So the Chairman went about his findings. He set out the history, which I have given, and he said:

"Mrs Chaudri was engaged under an oral contract by Mr Sharma to render office administration services to the Respondents for a fixed salary of £25 per week subject to increases/review. The Respondents mentioned that she was merely offered £25 as a contribution to her travel and subsistence expenses..."

Those were the rival contentions about the money she was paid.

"According to Mr Jones, this was the agreed flat rate which was paid to all volunteers. The rate was increased from April 1996 to £40 per week. Mrs Chaudri lived quite close to the Respondents' premises and as she worked from 10.00am to 1.00pm, she did not take a lunch break. The Chairman put it to Mr Jones that if she had walked to work and left at lunchtime to go home and make herself a meal, her actual expenses for the day would be negligible. Mr Jones accepted that but said that they just had a rule of thumb to pay a flat rate of £25 as expenses and this was confirmed by the petty cash vouchers which Mrs Chaudri signed every week which described the payments as "voluntary expenses". Those vouchers were actually completed by her and countersigned by her manager who was either Mr Sharma or his colleague Mr Gill."

"The Respondents", says the Chairman:

"continued to pay her salary even when she was off sick or had to leave early, and she was also paid holiday pay including payment during Bank Holidays and Christmas. Mr Jones vehemently denied this, and maintained that Mrs Chaudri only received her expenses payment for days which she worked. He said that she had no entitlement to holiday pay, sick pay or otherwise. However Mr Jones could not point to any voucher which showed that there had been a deduction or withholding of payment or expenses for any day when Mrs Chaudri did not attend for work. I do not know whether the 18 pages of photocopied vouchers are comprehensive and sequential, but in every case it appears that Mrs Chaudri received £25 per week, every week, until the rate increased to £40 and that too was consistently paid until she ceased to attend in September 1996.

Mr Sharma's explanation was that Mrs Chaudri never took more than the odd day off or that she had been absent sick. If she did, she would make it up by working another day and that was why the payment remained at the steady rate of £25/£40 per week throughout the period of her relationship with the Respondents. It is unfortunate that Mrs Chaudri was not present to deal with this matter in more detail but having looked at all of the petty cash vouchers I find it difficult to believe that she would not have been absent for one reason or another during the whole of the 25 months that she worked for the Respondents and that during that period no deduction was made because she never missed a day.

As regards the nature of her work this was dictated by Mr Sharma and Mr Gill who supervised it and I have no doubt that other than the question mark over the issue of salary, all the other indicators of employment, as opposed to self-employment, are present in the relationship between the Applicant and the Respondents."

Mr Wilson criticises that, for the Appellants, and says:

"well he does not set them out. What are the other indicators of employment on which the Chairman was relying?"

The Chairman, of course, is a lawyer, he knows what the indications of employment are: this is a very simple case and it is perhaps, in a way, like the elephant - you know one when you see one. However, he goes on.

He has the submissions on one side that she was a volunteer and was only being paid expenses; on the other hand, that he should look at the reality of the situation and the reality was that she was an employed person. He sets out the statutory provisions which apply to employed persons, or persons who are under contract (under the Sex Discrimination Act) to render personal services, even if it is not strictly a contract of employment. Then he says that the decision he has to make is this;

"Turning to the facts of this case the question which I have to ask myself is: were the payments made to Mrs Chaudri voluntary expenses, as so described, or a disguised form of salary or wages?"

Salary or wages are what are paid to an employee. Then he goes on:

"I accept Miss Nicholson's contention that the Tribunal must look to the realities of the arrangement and not to be deceived by a label which one or [the] other parties may apply."

Then he says he is entitled not to find conclusive the fact that there are no deductions of tax or National Insurance contributions. He says:

"...again one must look through the labels to the realities of the relationship. Mrs Chaudri was engaged at a flat rate of £25 per week which although stated to be in respect of travel and subsistence expenses, bore no relation to the expenses which she actually incurred in travelling to and from work or having at meals at work. As I suggested to Mr Jones, and as he was obliged to accept, it is possible that Mrs Chaudri actually incurred no expenses in her working week..."

Then he refers to the fact that:

"the Respondents unilaterally agreed to increase Mrs Chaudri's "expenses" to £40 per week although she apparently was doing no more work nor incurring any more expense in travel or subsistence. It was in fact a salary increase. It was accepted in the evidence that for the two year period in question Mrs Chaudri was the only volunteer who was permanently engaged by the Respondents. To that extent she can be distinguished from other volunteers who may have helped out from time to time. Her hours of work were regular and she normally worked Monday to Thursday."

He goes on to say that the receipt of this money throughout:

"indicates to me that Mrs Chaudri is telling the truth in her statement when she says that she was paid for holiday and sick leave. Those are factors which militate towards employment in the nature of the work that she did and her relationship with the Respondents is clearly well within the general definition and understanding of what is an employee. The sums which she received on a weekly basis were remuneration and therefore she is entitled to be treated as working under a contract of employment, albeit an oral one, throughout the period of her engagement with the Respondents. She is therefore entitled to pursue all her claims as set out in her Originating Application."

Now what is said about that by Mr Wilson is this; the Chairman should have asked himself these questions, first of all: was there an agreement? "He has not even answered that expressly", says Mr Wilson. What are the terms of the agreement? - Really there are no findings about those apart from what she actually did - Have the parties entered into a contractually binding relationship? - "The Chairman does not find that she was obliged to go in every day for four days a week", he says, "or that the employers were obliged to provide her with work and go on paying her" and, fourthly, whether this contract, if there was a contract, was in the nature of an 'employment relationship' and not some other relationship, such as a mere contract for services, or the work of a mere volunteer.

Mr Wilson refers to authorities which show that those are indeed legitimate tests which, no doubt, in proper circumstances any court or tribunal ought to put to themselves. There are various ways of putting it. He referred us to various cases and finally said this was a perverse decision because - and I am not going to go into all the details of the alleged perversity - here were two witnesses in person, Mr Jones and Mr Sharma, with nothing known against them, and, he says, here their evidence was being rejected in favour of that of the lady who did not even attend.

We have considered these submissions as carefully as we can. It is perfectly true that the Chairman did not analyse it in a way that a Tribunal might if it were considering documents, if it were considering evidence which it felt able to accept about the details of an alleged employment relationship. The Chairman had to go on very slender materials. In his view, this was a smoke-screen. The allegations that this was 'expenses' were just so much imagination. He had plenty of material for saying that. The idea that a charity can pay £40 a week without making any enquiry whatever about expenses the volunteer is incurring seems positively fanciful and there are obviously many reasons why they might wish to conceal the true nature of the payments. So the Chairman felt, with good reason, and found, that these were payments of a salary.

Having found that, of course, that meant that he had to reject the essence of the employers' evidence. They were not giving him evidence on which he could act. He had Mrs Chaudri's statement but above all he had the bare facts which I have mentioned. She came in four times a week. She did work regular hours. She was paid a salary and the evidence to the contrary was, quite simply, a smoke-screen. In those circumstances we ask ourselves how can there be any possible criticism of his decision that, in truth, she was employed?

Chairmen are not always attended by Counsel on both sides and they are not always in receipt of detailed, carefully analysed evidence, and we believe that they are not required in those circumstances to make a legal artifact in which they go through these headings, and analyse them in a jurisprudential fashion. No doubt Tribunals, who are headed by a legally qualified Chairman, of course, are sometimes able and well-advised to go in for such analysis. This Chairman was content to say how he found the reality of the situation. We think that he was well entitled to do so. He might have expressed himself differently, that was a matter entirely for him. We think he did enough. We most certainly do not think that his decision was perverse or that there were no grounds on which he could reach his decision. It would of course have been better if Mrs Chaudri had attended and if he had received evidence from her, as it was he merely had her statement and received that as evidence; he was entitled to do so.

In those circumstances we find this appeal is unsuccessful, it falls to be dismissed. We cannot find any error of law. The criticisms textually of this decision, the criticisms of detail, appear to us, in the circumstances, to be out of place and to carry the matter no further and merely, in effect, to be, with other observations made to us on the evidence, an invitation to us to substitute our own views for those of the Chairman. We are not prepared or entitled to do that. We accept that this Chairman was entitled, sitting as the Tribunal, to reach the conclusions he did and we must therefore dismiss the appeal. Those are the reasons of us all.