NORTH WALES PROBATION AREA v MRS D A EDWARDS [2007] UKEAT 0468_07_1212

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2007] UKEAT 0468_07_1212Case No Appeal No. UKEAT/0468/07Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
NORTH WALES PROBATION AREAAPPELLANTMRS D A EDWARDSRESPONDENT
Before
His Honour Judge RichardsonDate 12 December 2007
[1]APPEARANCES For the Appellant MISS JOANNE CONNOLLY (of Counsel) Instructed by: EEF North West Legal Services Mount Pleasant Glazebrook Lane Warrington Cheshire WA3 5BN For the Respondent MR IAN MOSS (Representative) Citizens Advice Bureau Specialist Support Unit The Development Centre Coxwell Avenue Wolverhampton Science Park Wolverhampton WV10 9RT SUMMARY Contract of employment: Definition of employee Whether claimant employed under a contract of employment – "sessional employment" – succession of contracts The claimant was placed on a list of relief hostel workers, after signing a document entitled "Relief Hostel Worker Contract" which set out terms and conditions under which the respondent offered "sessional employment". Relief hostel workers could decline to work any particular shift, or could make arrangements for another relief hostel worker to cover the shift for them. The Tribunal Chairman did not err in law in finding that, when the claimant worked a session, she did so pursuant to a contract of employment for that session. Cornwall County Council v Prater [2006] IRLR 362 applied. HIS HONOUR JUDGE RICHARDSON This appeal concerns what is sometimes called sessional employment. The North Wales Probation Service ("the Probation Service") operated a system whereby they gave what they described as "sessional employment" to relief hostel workers. The question is: when the hostel workers worked a session were they employees under a contract of employment? The relief hostel workers did not have to accept sessions when offered, and they could even arrange for another hostel worker to take over a session offered to them. Are these facts incompatible with the existence of contracts of employment for the sessions they worked?[2]The appeal is brought by the Probation Service against a judgment of the Employment Tribunal sitting at Shrewsbury by Chairman alone (Mr S J Williams). By his judgment the Tribunal Chairman held that Mrs Denise Edwards was an employee of the Probation Service when she was actually working sessions for them, within the definition contained in section 230 of the Employment Rights Act 1996 and also within the wider definition contained in section 68 of the Disability Discrimination Act 1995 .[3]Sections 230(1) and (2) of the 1996 At provide as follows:
"230 Employees, workers etc (1) In this Act "employee" means an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment. (2) In this Act "contract of employment" means a contract of service or apprenticeship, whether express or implied and (if it is express) whether oral or in writing."
Section 68 of the 1995 Act provides as follows – " "employment" means, subject to any prescribed provision, employment under a contract of service or of apprenticeship or a contract personally to do any work, and related expressions are to be construed accordingly;" The facts[4]Mrs Edwards has an interest in the criminal justice system. She has recently completed an honours degree in the subject. She is registered blind, although she has a degree of eyesight and can read large print. In late 2004 she was interested in the opportunity to join the relief staff of a residential probation hostel at Plas y Wern. She applied, was interviewed, and underwent relevant background checks, including a criminal records check. She passed those checks.[5]On 24 February 2005 she signed a document entitled "Relief Hostel Worker Contract". This reads as follows – RELIEF HOSTEL WORKER CONTRACT The Terms and Conditions under which the Service will be offering sessional employment are as follows: 1/ You will be employed on a casual basis. 2/ The Service will not be under any obligation to provide work and equally you will not be obliged to accept any offer of work. 3/ You will work under the direction of the Senior Probation Officer at the Hostel, and hours of work will be determined by arrangement with that person. 4/ You will not be entitled to payment for periods of sickness, and bank holidays. You will be entitled to a pro rata annual leave entitlement based on 20 days per annum. Please contact HR section in order that your annual leave entitlement be calculated. 5/ You will be paid on submission of the appropriate form at the rate of £7.30p/hour for week-day duties and £7.75p/hour for week-end and bank holiday duties. You will not be eligible for enhancements or increments. 6/ Providing you submit copies of insurance details indicating that use "in connection with business" is covered, you will be paid travel costs at the rate of 28.8p per mile for the use of your car. No lump sum element will be payable. Public transport and other costs will be met at cost on provision of receipts. 7/ You may be required to undertake designated essential training for which you will be paid. 8/ You will be notified of in-service training events which may be relevant and you may voluntarily apply for such training. If you are given a place, such training will be undertaken at your own expense and the above conditions relating to salary and mileage will not apply. 9/ You will not be eligible to claim telephone or subsistence allowance.[6]The hostel was staffed by probation officers and residential service officers who were full time employees. The complement of staff was at least five to six during the day-time, and at least two at night. Relief hostel workers, such as Mrs Edwards, were used to replace permanent members of staff during absence, though they would not necessarily be able to perform the full duties of the person they were replacing. The Probation Service maintained a list of approximately twenty-five relief hostel workers, all of whom had been recruited, checked and appointed in the same way.[7]There was no obligation on the Probation Service to provide any specific number of sessions to a relief hostel worker – or indeed any sessions at all. Equally there was no obligation on a relief hostel worker to accept any offer of work. Depending on their personal circumstances, some would undertake more sessions than others. Mrs Edwards worked most sessions which were available to her.[8]When she was offered and accepted work Mrs Edwards worked in all respects as a member of permanent staff would work, subject only to limitations on the duties she was required to perform. She worked under the direction of the senior probation officer in charge of the hostel. She was required to carry out his instructions.[9]As a general rule, when the Probation Service required a relief hostel worker to cover a session at a hostel, a worker would be chosen off the list and would be telephoned to see if he or she would accept the work. If the relief hostel worker accepted a particular date, a booking would be made.[10]The Tribunal Chairman's findings relating to what happened once a booking had been made were not detailed – a matter to which I shall return later. But the following facts are agreed between the parties, and were in either the written or the oral evidence before the Tribunal.[11]Firstly, it is agreed that the relief hostel worker was not bound by the existence of a booking to work the particular session. The relief hostel worker could telephone in and cancel the session – in which case the Probation Service would find a replacement from the list of approved relief hostel workers. Moreover the relief hostel worker could make an arrangement directly with another approved relief hostel worker for that worker to take over the session in question. As long as a relief hostel worker from the approved list turned up to work the session, the Probation Service was not concerned which worker it was.[12]Secondly, it is agreed that the Probation Service was not bound by the existence of a booking to provide work for the particular session. If, contrary to previous expectation, a permanent employee became available to work the session, the Probation Service could cancel the booking and would not be liable to pay the relief hostel worker. The Tribunal's reasons[13]The issue for the Tribunal Chairman at the pre-hearing review was simply whether Mrs Edwards was an employee. If (as the Chairman held) she was an employee under a succession of short contracts, questions would arise about the continuity of her service for the purposes of unfair dismissal, which was the remedy claimed under the 1996 Act. The Chairman was not concerned with those questions at the pre-hearing review.[14]The Tribunal Chairman held without difficulty that during those periods in which no work was actually being done there was no contract of any kind between the parties, because there were no mutual obligations between the parties.[15]He held, however, that during those periods when she was actually working for the Probation Service, she was an employee. He said – "17. But what of those periods during which the claimant did work for the respondent? It is perfectly clear from all of the contractual documentation, including the job description and list of duties, that during such periods the respondent took upon itself the obligation to provide the claimant with work and to pay her for it, the claimant took upon herself the obligation to do the work required of her and, furthermore, the claimant submitted herself to a degree of control by the respondent which was no less than that exercised over the respondent's permanent employees and which was consistent with nothing other than a relationship of employer and employee subsisting between them."[16]In dealing with arguments presented before him, he distinguished the decision of the House of Lords in Carmichael v National Powe r [2000] IRLR 43 , on the basis that in that case the House of Lords was concerned with the question whether there was an overall contractual relationship which subsisted when the casual workers were not at work. He followed and applied a dictum of Mummery LJ in Cornwall County Council v Prater [2006] IRLR 362 at paragraph 40, to which I shall return below, and a dictum of Elias P in James v Redcat (Brands) Limited [2007] IRLR 296 at paragraph 93 – "Accordingly, in my view the fact that there is a lack of any mutual obligations when no work is being performed is of little, if any, significance when determining the status of the individual when work is performed. At most it is merely one of the characteristics of the relationship which may be taken into account when considering the contract in context. It does not preclude a finding that the individual was a worker, or indeed an employee, when actually at work."[17]There is one particular respect in which the Chairman's reasons have been criticised, which requires further explanation.[18]In paragraph 9 of his reasons, when setting out his findings of fact, the Chairman said – "9. The claimant was not in a position to delegate performance of her duties to anyone else. Potential relief workers had to be appointed by the respondent, in the manner described above, before they were eligible to be offered shifts. In the event that the claimant was unable to accept a shift offered to her, the respondent would choose another person on their list of relief workers."[19]This passage in the Chairman's reasons does not set out the full story. As we have seen, it was also open to relief hostel workers to swap sessions with each other. It was also always open to the Probation Service to withdraw a booking for a particular session before it started.[20]When the Chairman was asked for elucidation of his reasons on this point he said – "4. It is an extremely common phenomenon in many industrial settings, particularly - although by no means exclusively - those where the work is required to be done on rotating shifts, that one worker who for personal reasons finds it difficult to work a particular shift may arrange with a colleague to cover him on what might otherwise be that colleague's day off. 5. It did not seem to me that such swapping of shifts, or covering of one colleague's duties by another, could affect the status of such workers, or employees, one way or the other. If such a person were an employee, then the fact of his arranging for his shift to be covered by a colleague (who was also already an employee of the employer) could not deprive him of his status as an employee. 6. The crucial consideration, as it appeared to me, was whether the claimant herself was able freely to select another person to whom she might delegate the performance of her duties. If she could, then that might fatally undermine her claim to have been an employee. But this claimant could not. The most she could do - as in the industrial setting described above - was to arrange with a colleague who, if my finding be correct, was already an employee of the same employer, that such person would cover duties which she would otherwise have performed." Submissions[21]On behalf of the Probation Service Miss Connolly submitted that Mrs Edwards was not an employee for the purposes of the definition in the 1996 Act, or even the extended definition in the 1995 Act. She submitted that there was no sufficient mutuality of contract between the parties – either on the part of the Probation Service to provide work, or on the part of the relief hostel worker to undertake it. If there was sufficient mutuality, it was in any event not an obligation to do the work personally.[22]She submitted that the moment on which it was necessary to concentrate was the moment when a booking was made with the relief hostel worker. The relief hostel worker remained free to withdraw or send someone else from the relief pool in her place, and the Probation Service remained free to withdraw the booking. There was therefore no mutuality of obligation. On this submission there was no contract at all between the Probation Service and the relief hostel worker; though she suggested that the relief hostel worker would be entitled to payment on a quantum meruit . Alternatively, if there was a contract, it was in her submission not a contract involving an obligation to do the work personally, since a substitute could be used.[23]Miss Connolly was asked to address the question whether a contract of employment was entered into for each session at the moment when, in response to an offer of work, the relief hostel worker turned up for work. She submitted that such a finding ought not to be readily made, and the Tribunal Chairman had not analysed the facts to see how such a finding would be compatible with a traditional contract analysis involving offer and acceptance. Further she submitted that even if a contract came into being only when a worker attended for a session, since that worker remained free to send someone else for subsequent sessions offered under the same booking there would still be no obligation to provide personal service. Finally she submitted that the relief hostel worker was free to leave even during a session and without good reason.[24]In considering the authorities, Miss Connolly drew a distinction between this case and Prater , on which the Tribunal Chairman had relied. Prater concerned a music teacher who, once she took on a pupil, was obliged to fulfil her commitment to the particular pupil. In this case there was either no obligation at all to work (her preferred position) or at least no obligation to work any more than an individual session.[25]On the question whether a right to use a substitute or delegate was compatible with a contract of employment or a contract to work personally, Miss Connolly took me to Express and Echo Publications Ltd v Tanton [1999] IRLR 367 at paragraphs 25 and 30, MacFarlane v Glasgow City Council [2001] IRLR 7 at paragraphs 10-14, Byrne Bros (Farmwork) v Baird [2002] IRLR 96 at paragraphs 11-15, Staffordshire Sentinels Newspapers v Potter [2004] IRLR 752 and James v Redcats (Brands) Ltd [2007] IRLR 296 at paragraphs 27-35.[26]She submitted that, on its facts, MacFarlane v Glasgow City Council was closest to this case. She emphasised that, in contradistinction to that case, here the right to use a substitute was unfettered (except that the substitute had to be an approved worker). She submitted that an unfettered right of delegation or substitution was not compatible with a contract of employment or a contract to work personally: rather the right of delegation or substitution had to be "qualified and exceptional" (Mr Recorder Underhill in Byrne Brothers at paragraph 15).[27]Miss Connolly submitted that the Tribunal's failure to identify the point in time when each individual contract was entered into, the duration of each contract, whether there was a right to substitute at the material time, and the impact of that right on whether the contract was one of personal service, amounted individually or cumulatively to an error of law, or at the very least a failure to provide adequate reasons.[28]Mr Moss, on behalf of Mrs Edwards, submitted that the Tribunal Chairman had reached the correct conclusion for the correct reasons.[29]On the question of mutuality, Mr Moss entirely accepted that no contract had come into being at the time of booking. He submitted that a contract had come into being on each occasion when the relief hostel worker attended for work. Absence of mutuality between contracts was irrelevant to the position once a contract of employment was entered into: see Prater at paragraph 40.[30]Moreover, submitted Mr Moss, once the relief hostel worker attended for work there was plainly an obligation to work personally, and to work under the control of the Probation Service. She could not substitute herself for someone else or walk out for no good reason once she had arrived for work. The fact that, prior to the commencement of the contract, she had been free to arrange for someone else to do the work was irrelevant.[31]Mr Moss submitted that these were essentially the conclusions which the Tribunal Chairman reached in his decision and expressed in his original reasons. He accepted that there was a degree of tension between the Chairman's original decision and his subsequent reasons, but submitted that the original reasons were plainly correct.[32]In his written submissions Mr Moss had argued that some of the submissions made on behalf of the Probation Service had not been advanced below. He withdrew this point in his oral submissions. In my judgment he was right to do so. The Probation Service's argument was encapsulated in its ET3 Response, and was before the Chairman for his consideration. Conclusions[33]It is convenient to begin with the question whether, and if so when, any contract or contracts were created between Mrs Edwards and the Probation Service.[34]In agreement with the Chairman, I think it is plain that the Relief Hostel Worker Contract did not in itself impose any obligation on the Probation Service to provide work or on Mrs Edwards to accept any offer of work. It was in the nature of a framework contract, setting out rates of pay and expenses, imposing a requirement to attend training if required and paid to do so, and no doubt recognising that Mrs Edwards had been interviewed, checked and approved to be part of the relief hostel worker team.[35]It is to my mind equally plain that no binding contract to provide work or to do work was created at the time when a booking was made with a relief hostel worker. The Chairman did not address this question in terms, or record the facts relating to the matter as fully as I have done earlier in this judgment. But, once those facts are recognised, they admit of only one answer. The booking was no more than an indication to a relief hostel worker that work was then available for that relief hostel worker at the time booked. It was not a guarantee that the work would remain available, for it might be withdrawn if a permanent member of staff covered it. Likewise, the booking was no more than an indication by the relief hostel worker that he intended to take the work; the relief hostel worker could notify a change of mind, or arrange for another member of the team to cover for him.[36]If there was no contract prior to the start of the session, was a contract formed when the relief hostel worker came to work? The Chairman found that there was such a contract, and that it was created for each period when the relief hostel worker came to work. As he put it, the Probation Service then took upon itself the obligation to provide work and pay for it, and the relief hostel worker took upon herself the obligation to do the work required, submitting to the control of the Probation Service.[37]To my mind this finding is unassailable, and plainly correct. I reject the submission that there was never a contract between the Probation Service and the individual worker; the notion that, when providing cover at a probation hostel, the relief hostel worker was free to come and go as she liked is to my mind not only contrary to the finding of the Tribunal Chairman, which he was entitled to make, but fanciful in practice.[38]I recognise that there is no precise analysis in the Chairman's reasoning in terms of offer and acceptance. I do not think any such analysis was required; it is sufficient if the parties can see why they won and lost a point, without a detailed legal exposition. But I do not think it is difficult to provide a legal analysis in terms of offer and acceptance. When a booking was made the Probation Service offered work for a particular session. The offer was made to the worker who was booked but was extended to any other member of the relief hostel worker team with whom he or she might agree that the session should be covered. The offer was open for acceptance by attending for work at the session in question. It was not open for acceptance at any earlier time, for the common understanding was that the Probation Service was entitled to withdraw it prior to the start of the session. However, once the relief hostel worker presented himself or herself for work, the offer was accepted and the contract fully binding on both sides. This seems to me to be a realistic way of analysing the relationship. It may be that there are other ways in which it could be analysed; such analysis is only a guide to the question whether a legally binding contract has been made.[39]Once granted that there was a contract in respect of each session worked, it is irrelevant that the Probation Service was under no obligation to offer another session or the relief hostel worker to accept one. The Chairman correctly cited Cornwall County Council v Prater (2006) IRLR at para 40, where Mummery LJ said – "(5) Nor does it make any difference to the legal position that, after the end of each engagement, the council was under no obligation to offer her another teaching engagement or that she was under no obligation to accept one. The important point is that, once a contract was entered into and while that contract continued, she was under an obligation to teach the pupil and the council was under an obligation to pay her for teaching the pupil made available to her by the council under that contract. That was all that was legally necessary to support the finding that each individual teaching engagement was a contract of service."[40]While Prater was concerned with a somewhat different form of contract, it was concerned, as here, with a succession of short term contracts.[41]I turn then to the question whether the contract which was created each session was a contract which imposed an obligation to do work personally. The Tribunal Chairman found that it was, and I have no doubt that he was correct. There was ample material from which he could draw that conclusion.[42]To my mind the fact that a relief hostel worker could have arranged a substitute for a session does not answer the question whether, if she works that session herself, her contract for that session is a contract to work personally. The natural inference is that, once she attends work for the particular session, she is bound to work personally and cannot just leave or organise someone else to come half way through; and that is borne out by paragraph 3 of the Relief Hostel Worker Contract, which requires her to work under the direction of the Senior Probation Officer at the Hostel, doing hours of work determined by him. In context, following paragraph 2 of the Contract, this must refer to work during sessions which the Probation Service has offered and she has accepted.[43]For the most part, the authorities to which Miss Connolly referred on the question of delegation or substitution concerned overall or "umbrella" contracts, not successions of individual contracts. Tanton , Byrne Brothers and James were such cases. The only case which may conceivably have involved a succession of individual contracts was McFarlane ; it is perhaps unclear from the report whether this was so. The case turned, in the end, only on the question whether the Tribunal was obliged by the reasoning in Tanton to hold that the claimants were not employees. It was held that the Tribunal was not so obliged. The case was remitted to the Tribunal on that basis. Where a claimant alleges the existence of a long-term contract, and the contract contains a right of delegation or substitution, this will plainly be relevant to the question whether it is a contract to work personally. But the issue here is different. The question is whether, in the context of individual successive contracts, there was an obligation to work personally. The fact that a worker might arrange someone else to take one such session does not bear on the question whether, if she attends a session herself, she agrees to work personally.[44]For these reasons I consider that, given the Tribunal Chairman's primary findings, even making allowance for the further facts which he might have found concerning the right on both sides to withdraw from booked sessions, the only conclusion open to him was that when she worked individual sessions Mrs Edwards did so pursuant to a contract of employment. I am not persuaded that he erred in law in reaching this conclusion. Indeed, I consider that he was plainly right.[45]That is not to say that I altogether follow the additional reasoning of the Chairman, which I have already quoted. The additional reasoning sets out considerations which would be important if it was alleged, or if he had found, that there was some form of overall or "umbrella" contract. In this case he found that there was a succession of individual contracts covering sessions. It is that finding which I consider to be plainly and unarguably right. Although he did not deal fully with the position concerning bookings and withdrawal, that is no reason for overturning his finding.[46]Put shortly, in the Relief Hostel Worker Contract, the Probation Service said they were offering sessional employment. They were correct.