Ogilvy v Easams Ltd [1998] UKEAT 490_98_0106

EAT
Ogilvy v Easams Ltd
[1998] UKEAT 490_98_0106 · 1998-06-01

JUDGE PETER CLARK :

By an Originating Application presented on 27 October 1997 the Appellant, Mr Ogilvy, described himself as a self-employed consultant specialising in the provision of sales, marketing and business development to the Information Technology industry.The nature of his complaint was that in April 1997 he had entered into a Consultancy Services Agreement with the Respondent, which he described in his pleading as a contract for services and contended that in breach of that contract the Respondent had terminated the agreement before he had completed 75 days work at £150 per day; in fact he had only completed 30 days work. He claimed the difference by way of damages for breach of contract. By its Notice of Appearance the Respondent disputed the claim on its merits and also contended that the Tribunal had no jurisdiction to entertain the breach of contract claim because the Appellant was not employed by the Respondent.The matter came before an Industrial Tribunal sitting at London South on 4 February 1998. By a decision with Extended Reasons dated 17 February 1998 the Tribunal held that it had no jurisdiction to entertain the claim for breach of contract as the Appellant was not an employee. Secondly, it dismissed his further complaint under Section 13 of the Employment Rights Act 1996. This appeal is concerned only with the first finding of the Tribunal.The Tribunal record, in paragraph 5 of their reasons, that it was common ground that the Appellant was not working under a contract of employment and found on the evidence that there was here a genuine contract for services.Secondly, the Tribunal directed itself to S. 3 (2) of the Industrial Tribunals Act 1996, (the Act), and the Extension of Jurisdiction Order 1994, (the Order), and held that its jurisdiction did not extend to a claim for breach of a contract for services.

The Appeal

The Appellant has not appeared and is not represented before us today. However, we have taken into account the grounds of appeal, settled by Mr Crabbe, a Legal Consultant. Essentially two points are taken. First, that the Chairman found that the Appellant was an employee in paragraph 3 of the Reasons. Secondly, that in any event the agreement between the parties was a contract in connection with employment and thus the claim is justificiable before the Industrial Tribunal.

Conclusion

We are quite satisfied, first, that the Industrial Tribunal found that the Appellant was engaged by the Respondent under a contract for services and not a contract of employment. The use of the expression "employed as a self-employed consultant" by the Chairman in paragraph 3 of the Reasons does not alter that view.Having so found, we are equally satisfied that as a matter of law the Tribunal was correct in concluding that it had no jurisdiction to entertain the Appellant's complaint based on an alleged breach of a contract for services. It is necessary to read Article 3 of the Order and Section 3 of the Act together.Section 3 of the Act, (formerly S. 131 of the Employment Protection Consolidation Act 1978) provides, so far as is material:
"(1) The appropriate Minister may by order provide that proceedings in respect of- (a) any claim to which this section applies, or (b) any claim to which this section applies and which is of a description specified in the order,
may, subject to such exceptions (if any) as may be so specified, be brought before an industrial tribunal.

(2) Subject to subsection (3), this section applies to-

(a) a claim for damages for breach of a contract of employment or other contract connected with employment,(b) a claim for a sum due under such a contract..."Article 3 of the Order provides:

"(3) Extension of Jurisdiction

Proceedings may be brought before an Industrial Tribunal in respect of a claim of an employee for the recovery of damages or any other sum, other than the claim for damages or for a sum due in respect of personal injuries, if-(a) The claim is one to which S.131 (2) of the 1978 Act applies and which a Court in England and Wales would, under the law for the time being in force, have jurisdiction to hear and determine.(b) The claim is not one to which Article 5 applies.(c) The claim arises or is outstanding on the termination of the employee's employment."It is therefore apparent that the claim by the Appellant, so far as is material, must be a claim for damages for breach of either a contract of employment or a contract connected with employment, and must arise or be outstanding on the termination of the employee's employment.If the Consultancy Services Agreement in this case was not a contract of employment, as the Chairman found and was entitled to find, in our view, can it nevertheless as a contract for services be a contract connected with employment? The answer, in our judgement, is plainly in the negative, not least because of the definition of 'employment' in S.42 of the Act, namely:
"'employment' means employment under a contract of employment and 'employed' shall be construed accordingly."
It is clear to us that in extending the jurisdiction of Industrial Tribunals to hear and determine breach of contract claims Parliament intended that the new jurisdiction would be limited to breach of contract claims by employees, defined in the same way as employees who enjoy protection against unfair dismissal rather than the wider group of workers covered, for example, by the race and sex discrimination legislation and the former Wages Act legislation, now contained in Part II of the Employment Rights Act 1996. Indeed, in this case the Chairman appears to have accepted that the Appellant was a 'worker' for the purposes of S. 13 ERA, but that no unauthorised deductions had been made from his wages.An example of a contract connected with employment is to be found in the EAT case of Rocket Cargo v Green [1997] IRLR 581, in which we note, incidentally, that Mr Crabbe appeared for the Applicant. There, the EAT presided over by Kirkwood J upheld an Industrial Tribunal decision that the Applicant employee could enforce a compromise agreement, reached with his employer following termination of his employment, under the Industrial Tribunal's breach of contract jurisdiction.In these circumstances we find that the Industrial Tribunal Chairman's approach was correct in law and accordingly this appeal must be dismissed.