MR L R VERNON v EVENT MANAGEMENT CATERING LTD [2007] UKEAT 0161_07_0207

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2007] UKEAT 0161_07_0207Case No Appeal No. UKEAT/0161/07Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MR L R VERNONAPPELLANTEVENT MANAGEMENT CATERING LTDRESPONDENT
Before
Mr Justice EliasDate 2 July 2007
[1]APPEARANCES For the Appellant Miss January Scott (of Counsel) Instructed by: Messrs Burstalls Solicitors P O Box 31 Ocean Chambers 54 Lowgate HULL HU1 1JF For the Respondent Mr Over (Legal Representative) Messrs Over Taylor Biggs Solicitors 4 Cranmere Court Lustleigh Close Matford Business Park EXETER EX2 8PW SUMMARY Unfair dismissal – Exclusions including worker/jurisdiction Claimant worked as a casual worker. He presented claims for unfair dismissal, breach of contract by failing to provide pay in lieu of notice; and failure to provide written particulars. The Tribunal found that he did not have an umbrella contract giving him the status of employee even when he was not working, but that he was an employee during the periods when he was actually engaged. The issue therefore was whether he had continuity of employment pursuant to s212 of the Employment Rights Act 1996 . The Tribunal held that he did not, but as a consequence of misunderstanding the nature of the provisions. The EAT held that on a proper application of the principles, continuity was established. Accordingly the appeal succeeded and the case was remitted to the Tribunal for a hearing of the outstanding issues. THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT) This is an appeal against the decision of the Employment Tribunal sitting in Hull, which held that the employee's claims for unfair dismissal, breach of contract for failure to give notice and failure to provide a written statement of terms and conditions of employment were all dismissed. We will refer to the appellant as the claimant, as he was below.[2]The judgment states that the reason for dismissing the claims was that the claimant, who was a casual worker, was not an employee. An analysis of the decision itself indicates that this was, with respect to the Tribunal, an inaccurate description of what they had in fact found. It was rather misleading shorthand. What their decision established - and this is now common ground between the parties - was that the claimant was not in any employment relationship between engagements; that the claimant was, however, an employee with respect to each engagement; but that he could not establish the requisite continuity of employment pursuant s212 of the Employment Rights Act 1996 to bring any of these claims. The Background.[3]The background is this. The respondent is a specialist catering company. It provides catering at the KC Stadium in Hull for football matches, the occasional rugby match, concerts and so forth pursuant to a franchise. It also provides catering for private functions. It has relatively few full time employees, these being mainly of managerial status. It covers the catering events by engaging the services of workers from a large pool of casual staff as and when necessary.[4]The claimant began working in February 2003, when he was aged sixteen, for a predecessor of the company. The franchise to provide the catering has passed through a number of hands, the latest being the respondent. Over the years his work has changed. Initially he was involved in general catering duties, but once he reached the age of eighteen, he served behind the bar in the restaurant.[5]The claimant has worked for two or three days each week since 2003. He was provided with a document called a 'casual workers handbook'. It makes it plain that there is no obligation on the company to offer him work or for him to accept it. In fact, however, the Tribunal found that the claimant worked on a regular basis and accepted all work offered to him. He said he was concerned that he might jeopardise his prospects of future work if he did not. Initially the system was that the HR department of the company would contact the employees it wanted from the casual pool, but since January 2006 the onus was placed on the casual workers to telephone the HR department to ascertain what was available and to book themselves in for the engagements they were willing to work.[6]The Tribunal found that he worked every week until the relationship was severed, except for two weeks in 2005 when he took a holiday.[7]There was an incident on 16 June 2006 when he had an altercation with another employee. The details do not matter. There was an investigation and the claimant was told that he would not be invited to do any more work. He alleged that this amounted to an unfair dismissal-indeed, an automatically unfair dismissal since the statutory dismissal procedures were not complied with. Further he complained that he had been given no notice or any statement of terms and conditions of employment. For each of these claims he has to show that he is an employee and that he has the requisite continuity of employment. More accurately, with respect to the failure to make a payment in lieu, he must show that he has been employed for at least one month in order to be entitled to the minimum period of one week's notice: s86 of the 1996 Act). There was no notice specified in the arrangement because it was envisaged that the contract with respect to each engagement would terminate at the end of that engagement.[8]The Tribunal set out the facts, considered the submission of the parties and identified the issues. It identified the first two in the following way:
"Was the claimant an employee, which means that he would have to establish an umbrella or global or overarching contract of employment for the whole of his period of employment? Alternatively, can the claimant rely on s212 of the Act to establish that he had individual days when there was an employment contract which should then be regarded as complete weeks of employment so as to give him the necessary period of continuous employment to claim unfair dismissal?"
They then identified certain other issues material to the case.[9]We pause for a moment to observe that it seems clear that the Tribunal there is positing that the requisite status and continuity can be established in one of two quite distinct ways. The first is where the relationship is such that the employee can properly be described as an employee not only in the periods when he is working, but also in the periods when he is not at work. This is frequently referred to as a global or overarching contract. They recognised that even if that situation does not arise, if the claimant is an employee with respect to each engagement then the operation of the rules for continuity of employment can effectively bridge the gaps when he is not at work so as to secure the requisite period of continuous employment.[10]As to the first issue, the Tribunal concluded that there was no global contract because in the periods when he was not at work there were no mutual obligations which would keep the contract alive. That was entirely in accordance with such cases as Carmichael v National Power plc [2000] IRLR 423; Nethermere (St Neotts) v Gardiner [1984] IRLR 240 and Clarke v Oxfordshire Health Authority [1998] IRLR 215 to which the Tribunal made reference. That decision of the Tribunal is not challenged.[11]So was the claimant an employee when he actually performed services? The Tribunal concluded that he was. They found that when he was at work there was sufficient mutuality of obligations to establish a contract; that he would be under the control of the management; and that he would work the designated hours and in the place specified. Mr Over, representing the company, initially sought to cross appeal that finding, but having considered the authorities in more detail, he did not pursue the point. He was wise not to do so. We are satisfied that the conclusion was one which the Tribunal was plainly entitled to reach on the evidence. The lack of mutual obligations between gaps does not prevent a contract of employment being in place when work is being performed: see e.g Cornwall County Council v Prater [2006] IRLR 362 for a recent example.[12]Accordingly the Tribunal had to look at the question of continuity of employment and they asked whether the provisions of s212 of the 1996 Act could assist the claimant. Section 212(1) provides:
"Any week during which the whole or part of which an employee's relations with the employer are governed by a contract of employment counts in computing the employee's period of employment."
[13]The effect is that if the employee works for the whole or part of any week then that entire week should count for the purposes of continuity of employment. This is irrespective of how many hours are worked. Conversely, if the employee does not work at all in that week, then that week cannot count under this subsection. If it is not to break continuity, that has to be as a consequence of other continuity provisions.[14]The Tribunal noted that the Court of Appeal in Cornwall County Council v Prater [2006] IRLR 362 had held that the continuity provisions in s212 could be used in a similar case where a person was held to be an employee in relation to each engagement but where there was no overarching contract of employment.[15]The Tribunal concluded that the facts of Prater were very different and they did not consider that s212(1) could apply. They summarised their reasons as follows (paras 23-24):
"The Tribunal cannot accept that Section 212(1) converts the relationship between the Claimant and the Respondent into a contract of employment merely because in each week the Claimant had two or three days of employment. Such an approach would negative and change the essence of the relationship between the Claimant and the Respondent, namely that the Claimant was providing services, that the Respondent had no obligation to offer future work, and the Claimant always had the opportunity to decline work. Furthermore, having found that there is nothing in the evidence to support the existence of a global contract, an interpretation of Section 212 such as the Claimant's Solicitor suggests would drive a coach and horses through that finding. Every employee engaged by the Respondent would be able to claim every week as counting towards continuous employment, and even weeks when he or she did not provide services could, theoretically, be bridged by the provisions in Section 212(3)."
[16]There was also the period when the claimant was absent for two weeks on holiday. Since he did not work at all in those weeks they could not count under s. 212(1). He claimed that continuity there was achieved by s212 (3)(c) of the Act. This provides for continuity where the employee is:
"absent from work in circumstances such that, by arrangement or custom, he is regarded as continuing in the employment of his employer for any purpose."
The Tribunal did not think it necessary to determine that question since they had rejected his claim for continuity in respect of the other periods under s212(1). The grounds of appeal.[17]The claimant submits that the Tribunal erred in its approach to the whole question of continuity of employment. Ms Scott, counsel for the claimant, submits that once the claimant was found to be an employee in the periods when he was actually engaged, then the Tribunal must simply apply the rule set out in s212. They failed to do that because they considered that in some way it was inconsistent with the arrangement between the parties.[18]Mr Over submits that the Tribunal were correct. Contracts of this nature are widespread in industry. It would wholly undermine them if employees could obtain rights in this way. In effect, if the claimant is right it is creating the equivalent of a global contract which, as the Tribunal found, is directly contrary to the parties' intentions. Parliament could not have intended the whole panoply of employees' rights to be acquired in these circumstances.[19]We agree with the claimant. As the Tribunal recognised, there are two ways in which the employee involved in casual work may acquire continuity. One is if there is a global contract in which case there are no gaps in the period of employment. The other is if there are intermittent contracts but the gaps can be bridged by the legal rules on continuity. It is true that both may lead to the same result, but that is not a reason for failing to apply the statutory continuity provisions as Parliament enacted them. It is also the case that the facts in Prater were different in that the nature of the actual engagements presented a very different pattern from that in this case, but with respect to the Tribunal, that is not material at all when looking at the operation of s212(1). It seems to us that in every week where the claimant worked as an employee, for however long, that week must count under s212(1). His relationship is then governed by a contract of employment. The subsection could not be clearer.[20]The issue then is whether the break of two weeks could be properly described as a period when the claimant could be said to be absent in circumstances where by arrangement his employment was regarded as continuing.[21]The parties have asked us to determine this issue. They do not want to incur the additional cost of returning to the Tribunal - and perhaps thereafter back here - particularly given that the amount at stake in this particular claim is small. Bearing in mind the overriding objective, we think that it is appropriate that we do determine it.[22]The relevant findings of the Tribunal are these. They noted that the claimant was entitled to four weeks' paid holiday in any given holiday year. The company had agreed that, giving effect to the Working Time Regulations . They, in fact, provided for the paid holiday by rolling it up in the ordinary pay. (The legality of the arrangement is not in issue in these proceedings.)[23]The Tribunal further found that there were two weeks in July 2005 when the claimant had made arrangements with one of the staff of the HR department that he would not be available for two weeks because he was on holiday. He was not paid for that period precisely because his holiday pay had been rolled up with his ordinary pay; the pay slips merely showed that he received a tax rebate.[24]We were referred to no authorities on the construction or application of s212(3)(c). However, there can be no doubt that he was absent by arrangement; the issue is whether that was in circumstances where the effect of the arrangement is that he is regarded as continuing in the employment.[25]Mr Over submits that he could not be so regarded because he had no employment, save in the periods when he was actually working. The effect of s212(1) was to deem him to be in employment for the rest of any week when he worked, but where he was not working in the week, then there was no employment at all and he could not sensibly be regarded as continuing in employment.[26]Ms Scott submits that this is similar to the Prater case where the court concluded that the continuity provisions under s212(3) could link periods which counted under s212(1). That was not, however, a s212(3)(c) case, however.[27]We have concluded that this is an arrangement falling within the terms of the statute. It would be a curious result if as a consequence of taking holiday under the Working Time Regulations the employee was destroying the rights which he would otherwise have had. To put it colloquially, we think he must deemed to be 'on the books' for the two week period even though there was no contract of employment in existence in those two weeks. The effect of the agreement was that he should not in any way be prejudiced by taking off those weeks and failing to report for work.[28]Accordingly, the appeal succeeds and we find that the claimant did have the requisite continuity, and the case must be heard on its merits. We understand that in fact the automatically unfair dismissal has been conceded, but the Tribunal will have to determine remedies and any other disputed issues.