JAMES F C HAINE v ROLLS ROYCE PLC [2004] UKEAT 0028_04_2409

EMPLOYMENT APPEAL TRIBUNAL

BAILII case number: [2004] UKEAT 0028_04_2409

Case No Appeal No. UKEAT/0028/04

Venue 52 MELVILLE STREET, EDINBURGH EH3 7HF

Between

JAMES F C HAINEAPPELLANT

ROLLS ROYCE PLCRESPONDENT

Before

Lord Johnston Dr A H Bridge Mr R P Thomson

Date 24 September 2004

[1]APPEARANCES For the Appellant Mr D Whyte, Solicitor Of- Messrs Bishops Solicitors 2 Blythswood Square GLASGOW G2 4AD For the Respondents Mr L McNeill, Advocate Instructed by- EEF East Midlands & Mid-Anglia Barleythorpe OAKHAM Rutland LE15 7ED SUMMARY CONTRACT OF EMPLOYMENT Contract of service or for services LORD JOHNSTON: This is an appeal at the instance of the so-called employee against a finding of the Employment Tribunal sitting in Glasgow that he was not in fact employed by the respondents but was an independent contractor.

[2]The background to the matter is that the appellant was employed in a series of contracts by the respondents concerning the skippering of a yacht and connected services. His employment ceased at the end of one of such contract periods, a point not insignificant in itself. The Tribunal heard evidence and concluded as follows:- "In the instant case the Tribunal was satisfied, on the totality of the evidence before it, that the elements essential to the existence of a contract of employment and without which the contract cannot have the potential to be so regarded, were present and thus the potential existed for the contract to be a contract of service. The Tribunal then went on to identify a number of indicators, some of which tended to point to the true nature of the contract being that of a contract of employment and others which pointed, in the Tribunal's view, with equal force towards the contract being a contract for the supply of services. Some of the indicators were indicators which were consistent equally with the existence of a contract of employment and of a contract for the supply of services. Having carried out that process the Tribunal was satisfied that the position, without the expression of parties' intention contained in Clause V of the written agreement, was uncertain and ambiguous. In those circumstances the tribunal considered the terms of Clause V of the written agreement. The Tribunal considered that those terms which clearly and unequivocally indicated that parties had, at the time of entering into and renewing each such contract, considered the contractual relationship which they intended to create and had agreed that that would be a relationship of principal and principal, to be determinative in its conclusion. The Tribunal held that, at the material time, the applicant was not an employee in terms of Sections 230(1) and (2) of the Employment Rights Act 1996 for the purposes of Section 94 of that Act. The Tribunal accordingly concluded that it did not have jurisdiction to entertain the applicant's complaint of unfair dismissal."

[3]Mr Whyte, appearing on behalf of the appellant, sought to challenge certain findings made by the Tribunal Chairman, as either being erroneous or irrelevant, thus, he submitted, the balance which the Tribunal Chairman found to be very even, should be tipped in his favour. He referred particularly to the issues of profit making and acceptance of risk, both of which are featured in the authorities as relevant considerations in determination of what is sometimes a difficult question as between a contract for services and a contract of service.

[4]Mr McNeill, appearing for the respondents, argued that, in fact, the matter was not as balanced as the Tribunal Chairman had held, but, in any event, he had come to the right conclusion.

[5]We adopt entirely what Mr McNeill said in this respect. The contract itself contains clauses such as elements of control or freedom, an obligation of indemnity in favour of the appellant, and, indeed, a declaration that he is to be treated as a principal. It also refers to a fee. Quite apart from any findings in fact, therefore, made by the Tribunal Chairman, these factors are all indicative, and, in our view, conclusively indicative of this being a contract for services. It is also to be noted that both the respondents and the Inland Revenue treated the appellant as self-employed in respect of income tax and national insurance.

[6]If there was any further doubt in the matter, the findings in fact made by the Tribunal on pages 10 and 11 of the decision, with regard to freedom of movement and control or lack of it, are all indicative of self-employment.

[7]In these circumstances we are in no doubt that the Tribunal Chairman reached the correct decision and this appeal is dismissed.