MR A S BATTISTA v (1) JEDSON LTD (2) MR E NAZIF [2002] UKEAT 1182_01_1803

EMPLOYMENT APPEAL TRIBUNAL

BAILII case number: [2002] UKEAT 1182_01_1803

Case No Appeal No. EAT/1182/01

Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

Between

MR A S BATTISTAAPPELLANT

(1) JEDSON LTD (2) MR E NAZIFRESPONDENT

Before

Mr Justice Lindsay

Date 18 March 2002

[1]APPEARANCES For the Appellant Mr Perera (Representative) 25 Astley House Row Cross Street London SE1 5HU MR JUSTICE LINDSAY (PRESIDENT) We have before us by way of a preliminary hearing the appeal of Mr Antonio Salvatore Battista in Battista -v-(1) Jedson Limited

(2) Mr Ersin Nazif . Today Mr Battista has been represented by his friend Mr Perera, as, indeed, he was below.

[2]On 10 May of last year, Mr Battista put in an IT1 for unfair dismissal. He said that he had been employed from 1 February 1999 to 12 February 2001. He said he was a restaurant manager-cum-chef, and the two Respondents were described by him as Jedson Ltd as the restaurant owner, and, as for the second Respondent, Mr Nazif, as the sole director of that restaurant-owning company. He said that he had worked without payment and was owed £41,870 for wages. He said that he had put in £13,000 of his own money into the business and yet, he claimed, that he had found himself locked out of the premises, and, on trying to break the padlocks to enter (as he felt he was able properly to do) he was, he said, arrested by the police and he sought compensation for unfair dismissal and the £41,870 as wages.

[3]On 5 June of last year there was an IT3 put in by both Respondents. It was asserted that Mr Battista had never been an employee of either Jedson Ltd or Mr Nazif in the restaurant business; rather, it was claimed, that there had been a partnership in which the Respondents, in some relationship between them, put up the money and Mr Battista put in the catering skills and that the profits were intended to be shared fifty/fifty.

[4]The Respondent Company, Jedson, was claiming that it had put in £20,000 towards the business, but the restaurant was not profitable, it was said, and neither Mr Battista nor Jedson nor Mr Nazif drew money out of it, so it was said, and the restaurant had to close because of continuing losses. The IT3 said:

"The company [Jedson Ltd] agreed to sell the restaurant to the Applicant for £15,000. The Applicant insisted that the restaurant remained open whilst the transaction went through even though this would mean that further losses were incurred. It was therefore agreed that completion should take place within one month failing which the purchase price would be increased by £1,000 for each month that completion was delayed. The Applicant agreed to these terms."

[5]But, so went on the IT3, Mr Battista did not complete the transaction and his solicitors (it was claimed) ultimately said that he was not in a position to proceed and accordingly the Respondents closed the restaurant and it was claimed that the Applicant, Mr Battista, had been reported to the police because of a credit card fraud in that the bulk of card transactions at the restaurants from October 2000 onwards had, it was claimed, been paid directly into his own account.

[6]So that was the shape of the dispute between the parties and that went to a hearing on 30 July of last year at the Employment Tribunal and Mr Battista was, as I mentioned, represented by Mr Perera. On 13 August 2001 the Decision was sent to the parties and it was unanimous. It was the decision of the Tribunal at London South under the chairmanship of Mr B G Murphy and it was:

"The Applicant was not employed by either or both of the Respondents and his claim fails. The Originating Application is accordingly dismissed."

[7]On 17 September the Employment Appeal Tribunal received a Notice of Appeal. On 7 March of this year the learned Registrar refused Mr Battista's attempt to introduce some documentary evidence at this preliminary hearing and there has been no appeal against that before today and none is before us today.

[8]Mr Battista, by Mr Perera, has put in a Skeleton Argument and he says that there was no evidence of the relationship of partnership between him and either the company, Jedson, or Mr Nazif or any combination of the two and that the only possible conclusion was that truly what existed was the relationship of employer and employee. In his Skeleton he says:

" Once it was accepted by the Second Respondent that the Appellant was previously in paid employment, (the fact that he was self-employed is immaterial) as a gardener, the burden was on the Respondents to show that the nature of the relationship ceased and a new relationship was created."

But there is no such principle in law. One cannot infer that because Mr Nazif had previously used Mr Battista as a self-employed gardener that in the restaurant business there was some onus on the Respondents, or either of them, to show that he was not an employee. There is no such principle of law. Mr Battista criticised the Employment Tribunal's reception of the well known case, Ready Mix Concrete Ltd

[1968] 1 All ER 433

. We would readily accept that that case is usually used to distinguish between an employee with a contract of service on the one hand and a self-employed person and a contract for services on the other. But it cannot be said to be wholly inappropriate in testing for employment as against partnership. Thus, as to the question of whether the worker has undertaken to provide his own work in return for remuneration, well, here there were no wages paid to Mr Battista for over one hundred and five weeks. There were no wages, it would seem, even claimed by Mr Battista over one hundred and five weeks. Mr Battista and the company and Mr Nazif were held to have understood that the Applicant would run the restaurant and be the chef, and that the two Respondents would provide the finance. That could well lead to an implied promise that profits, if any, were to be shared equally and there is no finding as to any promise of remuneration of any other type. That type of promise of remuneration would, of course, be consistent with partnership.

[9]Equally, the third part of the Ready Mix test, which raises the question of whether there are other features inconsistent with a contract of service, was a perfectly proper question to be looked at by the Tribunal and the answer that the Tribunal came to took into account features such as that Mr Battista was not on the payroll; that he was not paid wages. There seem, consistently with him not being on the payroll, to have been no arrangements made for PAYE and National Insurance contributions to be paid in relation to him as an employee and there is an absence of any finding as to a promise to pay him wages. Mr Perera argues that the way the relationship came to an end is not consistent with there having been a partnership, but the difficulty there is that the reasons lying behind the way in which the partnership came to an end were not the subject of findings. One cannot tell whether it was a question of Mr Battista quite properly seeking to get into the premises on the one hand or a credit card fraud on the other. In any event, even supposing that Jedson or Ersin Nazif were acting wrongly in reporting him to the police and not letting him enter the premises, one does not prove that there was no partnership by proving something which would have been a breach of the express or implied partnership agreement.

[10]Mr Perera, for Mr Battista, argues that the company was one in which he held no shares and of which he was not a director but that it traded. That, he says, shows, in effect, that there was no partnership and shows also, therefore, that he was an employee. But that the company traded in catering does not disprove a partnership involving Mr Battista. What needs to be examined was whether Mr Battista was an employee. One does not prove he was an employee by showing that the company traded, as there is no reason why the partnership should not have been between the company and Mr Battista or between both the company and Mr Nazif and Battista. On either of those alternatives the company would have traded; hence proving that the company traded does not greatly assist Mr Battista.

[11]The company, by Mr Battista gave oral evidence below. The Tribunal said:

"Mr Ersin Nazif gave oral evidence to the Tribunal on behalf of himself and the First Respondent. Oral evidence was given by the Applicant, mainly through his son who was his interpreter. The Tribunal also received evidence, bundles of documents from both the Applicant and the Respondents."

A little later in their paragraph 7, the Tribunal says:

"(1) For some years the Applicant had worked as the Second Respondent's gardener but he had been undergoing training as a chef and in the summer of 1998 the Applicant and the Second Respondent agreed to open a restaurant together. Unfortunately, the basis of their business relationship was never formally addressed or reduced to writing but it was clearly understood between them that the Second Respondent would provide the finance and the Applicant would run the restaurant and be the chef. (2) On 18 June 1999, the First Respondent was incorporated as a trading vehicle for the restaurant and to hold the lease. The Second Respondent was the sole director and shareholder. (3) The Applicant found suitable premises for the restaurant and in due course the First Respondent took a lease of restaurant premises with effect from 24 June 1999 at 257, London Road, Mitcham. The Second Respondent stood as surety and he obtained a loan of £20,000, secured on his own home, to meet the expenses of starting the restaurant. The Applicant refurbished the premises largely, if not entirely, on his own and it opened on 14 February 2000. It was called "

Antonio Di Calabria" which was a name chosen by the Applicant. (4) Sadly, the restaurant was a financial failure and it incurred substantial losses which were met by the Second Respondent. " A little later they say:

"(5) The Applicant worked in the business for 105 weeks, which included the business of refurbishment and he received no wages. He purchased with his own funds various items of equipment at a cost of well over £2,000, which were used in the restaurant."

And a little later, they said:

"(6) ……….On the other hand, the Applicant had exclusive control over all aspects of the running of the restaurant, including the hiring of staff, the purchase of food and the hours of opening, within the limitations of the Restaurant Licence. (7) The Applicant's name was not shown by him on the payroll and he never made any claim for the payment of wages. Nor did he ever threaten to cease running the restaurant if wages were not paid to him."

[12]Counsel for the Respondents below, Mr Herbert, made certain submissions. In paragraph 9 the Tribunal says:

"a) On behalf of the Respondents, Mr Herbert submitted that the Applicant could not at any time have been an employee of either or both of the Respondents. Whilst the names of those employed at the restaurant were shown on the payroll, the Applicant's name did not appear. If the Applicant had been an employee, it would have been in his own interest to have put his name on the payroll but he did not do so and he never claimed wages. Instead, the Applicant relied on a loan to enable him to survive financially for the 105 weeks that he was working in the business. b) Mr Herbert submitted that the reality was that the parties were effectively in an equal partnership, the Respondents contributing the finance and the Applicant contributing his work and expertise in running the restaurant. The Applicant was in sole charge and control of the business and there was no element of supervision by either of the Respondents. c) Mr Herbert submitted that it is beyond belief that the Applicant would have been prepared to work in the restaurant for 105 weeks without wages if he had been an employee and entitled to be paid wages."

[13]And those submissions attracted the Employment Tribunal. In their paragraph 11 they said:

"The Tribunal agrees with Mr Herbert's submissions on behalf of the Respondents and the Applicant was not an employee of either or both of the Respondents. The relationship between the Applicant and the Respondents was much more in tune with a partnership than that of an employer and an employee."

We do not see that the Employment Tribunal misdirected itself in law and, of course, we must emphasise that it is only errors of law with which we can deal.

[14]On the footing that the Employment Tribunal did not go wrong in the directions which it gave itself in law, the matter therefore is dependent on fact, and we have looked at the facts and we have heard Mr Perera and we do not see any ground for being able to say that any of the facts found were without foundation in evidence given. In other words, there is no perversity here shown.

[15]The Tribunal weighed up the facts and concluded that there was a partnership and we are unable to see any error of law in that conclusion and accordingly, we must dismiss the appeal, even at this preliminary stage, because we have been unable to see any arguable error of law arising out of the Decision and out of the Notice of Appeal, and so we dismiss the matter even at this preliminary stage.