DR C FITTON v CITY OF EDINBURGH COUNCIL [2008] UKEAT 0010_07_0506

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2008] UKEAT 0010_07_0506Case No Appeal No. UKEAT/0010/07Venue 52 MELVILLE STREET, EDINBURGH, EH3 7HF
Between
DR C FITTONAPPELLANTCITY OF EDINBURGH COUNCILRESPONDENT
Before
Lady SmithDate 5 June 2008
[1]APPEARANCES For the Appellant DR C FITTON (The Appellant in Person) For the Respondent MR D FAIRLEY (Advocate) City of Edinburgh Council Corporate Services Legal Division City Chambers High Street Edinburgh EH1 1YJ SUMMARY CONTRACT OF EMPLOYMENT: Implied term/variation/construction of term Claimant originally seconded by the respondents to a separate entity but her secondment became, at her behest, "open ended" with a view to it carrying on until retirement and she relinquished her post with the respondents. The Tribunal found that the respondents were not thereafter the claimant's employers and dismissed her claims of unfair dismissal and sex discrimination. On appeal, the Tribunal's judgment was upheld. It was open to the Tribunal to conclude, on its findings in fact, that the respondents had ceased being the claimant's employer. THE HONOURABLE LADY SMITH INTRODUCTION This is an appeal from the judgment of an Employment Tribunal sitting at Edinburgh, Employment Judge Mr JGd'Inverno, registered on 14 November 2006. That judgment was issued following a pre hearing review at which the Tribunal addressed the issue of whether or not the respondents were the claimant's employer at the relevant time.[2]The claimant represented herself before the Tribunal and before me and the respondents were represented by Mr Fairley, advocate, before the Tribunal and before me.[3]I propose to continue referring to the parties as claimant and respondents. BACKGROUND[4]The claimant sought to advance claims of unfair (constructive) dismissal, of direct sex discrimination and of sexual harassment. When first presented, her claim was directed against three respondents: these respondents, the Edinburgh Lifelong Partnership ("ELLP") and Napier University. Shortly prior to the pre-hearing review, the claimant agreed to release ELLP and Napier University, leaving the respondents as the only respondents to her claim.[5]As a pre-requisite to her claim against the respondents, the claimant required to show that they were her employers at the date of her resignation (1 June 2005), that they were her employers at the time of events that occurred in the period 10 August 2003 to 1 June 2005, and that an individual who she alleged had sexually harassed her was in their employment.[6]As regards the last of these, the claimant accepts that he was not employed by the respondents and I propose, accordingly, to say no more about that aspect of her claim.[7]The claimant was employed by the respondents and their predecessors from 1978. By 2002 she had been appointed to the position of International Unit Manager in the respondents' Education Department.[8]ELLP was a corporate body constituting a joint venture between a number of partners involved in the provision of education, including the respondents. In November 2001, the claimant successfully applied to be seconded to ELLP. She took up the position of Manager of ELLP on 18 February 2003. At that time, it was intended that the secondment last for an initial period of about twelve months.[9]The claimant attended for her annual review meeting and indicated a career objective (which she had written on the relevant appraisal form) as being "permanency in current post". The form recorded that the respondents' Mr Rosendale was to follow up on this. The matter was taken forward and the Tribunal found that: "By August 2003 the respondents for their part, ELLP for their part and the claimant for her part were all in agreement that the claimant should remain permanently in the seconded post of Manager of ELLP until her retrial (sic) date and were further agreed, on that basis, that it was not anticipated, in the normal course of things, that the secondment would end nor that the claimant would ever again return to her substantive post within the respondents' organisation." (para 40)[10]The respondents wrote to the claimant regarding the matter by letter dated 6 August 2003, the terms of which included:
"I now have to confirm that the City of Edinburgh Council has reached an agreement with the Edinburgh Lifelong Partnership that the secondment will continue on an open-ended basis. I understand that you have agreed to continue as ELLP Manager indefinitely and in these circumstances I require you to write to me relinquishing your post as International Unit Manager. Should this arrangement come to an end you will be guaranteed a comparable post with the City of Edinburgh Council, Education Department paid in accordance with the Senior Officer 5 scale and with duties and responsibilities commensurate with your substantive post. Your salary and conditions of service remain unchanged."
[11]The Tribunal found, at paragraph 48:
"The term 'open ended' used in the respondents' letter to the claimant of 6 August 2003, to qualify the term 'secondment' was understood by all parties to the agreement to mean 'without any set end date' or 'permanently' until the claimant's retirement in 2011."
[12]The claimant replied to the letter on 10 August 2003, in terms which included:
"Thank you for your letter of 6 August 2003 confirming my open ended secondment to ELLP. I am pleased to accept this secondment and in doing so relinquish my post as International Unit Manager. I understand that I shall be guaranteed a comparable post with the City of Edinburgh Council Education Department in the event of the secondment coming to an end. For clarification, my salary and conditions of service in the ELLP Manager's post are determined by the ELLP Board and reviewed on an annual basis in January of each year and clearly may vary from my substantive post. I accept that this does not affect my substantive post in the event of my return to the Department."
[13]From that date the claimant neither expected nor intended to return to work within the respondents' organisation. She worked in the ELLP premises. The respondents did not thereafter regard themselves as having any right to require the claimant to work for them. She had no substantive job title with the respondents. She was under no obligation to them. She was not controlled by them. She performed no work for them. She sought no help or guidance from them regarding any aspect of her daily work. She adjusted her leave with ELLP, not the respondents. She was line managed by ELLP. The claimant raised certain concerns she had about, for instance, the awarding of contracts, with the ELLP Vice Chair and the ELLP Steering Group. Although she raised them with Mr Rosendale, who was an employee of the respondents, she did so in his capacity as a member of the ELLP Steering Group. Although the claimant's salary was paid through the respondents' payroll, it was on the basis that the cost of it was charged back to ELLP by reducing the amount of grant that would otherwise have been paid to ELLP by the respondents. Further, the claimant's salary and conditions of service were a matter for ELLP. They were outwith the respondents' control.[14]Matters did not, however, work out as the claimant had hoped. Prior to her retiral, ELLP decided, on 17 March 2005, to dissolve the company. It was considered that it had come to the end of its natural life. The Tribunal's Judgment[15]A significant part of the Tribunal's judgment is concerned with seeking to identify who was the claimant's employer at the relevant time rather than simply asking whether the respondents were her employers. Its conclusion was that she was employed by ELLP, implicit in which is a finding that the respondents were not her employers.[16]Mr Fairley frankly accepted that he may have been responsible for the extent to which the Tribunal considered the strictly unnecessary question of who was the claimant's employer. It was driven in part by considerations arising from recent authorities on the subject of the "worker - agency - end user" contracts (e.g. Franks v Reuters Ltd [2003] ICR 1116, Cable and Wireless v Muscat [2006] ICR 976, Dacas v Brook Street Bureau (UK) Ltd [2004] ICR 1437 ) . More recently, of course, one requires to consider the judgment of the Court of Appeal in James v London Borough of Greenwich [2008] ICR 545 in which those and other judgments on the subject are reviewed. The reliance placed on these authorities was not, however, purely for the purpose of considering who was the claimant's employer between August 2003 and June 2005. The Tribunal appears to have noted that, in those authorities, the tribunals (and the Court of Appeal) required to address the question of whether the claimants were employed and if so by whom and to that extent, found the general guidance given in them to be of assistance.[17]In particular, the Tribunal noted that the irreducible minimum of mutuality of obligation and control were still required before a contract of employment could be found to have existed, bearing in mind that such a contract could be implied if it was necessary, on the facts, to do so.[18]Then, having reviewed the whole facts, as outlined above, the Tribunal expressed itself to be satisfied that, as from August 2003, the claimant was in a new and different employment, with ELLP.[19]The Tribunal also considered whether the claimant had any contract with the respondents at all after 10 August 2003 and if so, what was its nature. It answered those questions at paragraph 70 to the effect that there was a contract and it amounted to:
"an express unilateral conditional undertaking on the part of the respondents to allocate the claimant a post, comparable to the substantive post which she was relinquishing, within their Education Department paid in accordance with the Senior Officer 5 Scale and with duties and responsibilities commensurate to the said substantive post, in the event of the arrangement whereby the claimant was to indefinitely continue as ELLP Manager coming to an end."
The Appeal[20]At the heart of the claimant's appeal lay a complaint that the respondents should have warned her what would be the consequences of relinquishing her post. She said:
"I inadvertently resigned from City of Edinburgh Council – I was misled by them into doing that."
[21]She indicated that if she had been specifically told that by relinquishing her post with the respondents she was bringing her employment with them to an end, she would not have accepted an open ended secondment.[22]It thus being her position that she accepted that she had resigned from her post with the respondents in August 2003, it was inevitably going to be extremely difficult for her to attack the Tribunal's determination. She sought to do so by submitting that the Tribunal had misdirected itself in applying a different interpretation to a secondment of indeterminate length. From that I understood her to be drawing a comparison between it and her original secondment and suggesting that there was not a significant difference. She referred to various matters which, she said, indicated that her employment with the respondents continued. A number of them were new matters not reflected in the evidence or in the findings in fact. She relied on there having been a close relationship between the respondents and ELLP and said that the Tribunal had failed to take account of it.[23]The claimant placed reliance on the respondents having indicated in their letter of 6 August 2003 that her salary and conditions would remain unchanged. She also relied on passages in one of the respondents' documents entitled "Managing Secondments". That is a document that was not provided to her at any time prior to the present tribunal litigation. It is written for the guidance of those who work in the personnel and management services division of the respondents. The claimant also submitted that her contract could not have changed because she did not receive a written statement of its terms. Further, the Tribunal had erred because it had to be satisfied that her role at ELLP was inconsistent with her written contract with the respondents and could only be explained by a contract with ELLP. She relied on the case of Wood Group (North Sea) Engineering Ltd v Robertson [2007] 6.07.2007 Employment Appeal Tribunal (Scotland). She relied also on the fact that the Lord Provost wrote to her when ELLP was dissolved, stating that "As a seconded employee, you will be offered a suitable post with the Council." That showed that she regarded the claimant as an employee of the respondents.[24]Separately, the claimant referred to "secondment". Her submission appeared to be that a person on secondment could not be the employee of the entity to which he or she was seconded to. She submitted that the Tribunal had failed to take account of various matters raised in evidence which, she said, showed that the respondents were her employers.[25]The claimant also indicated that if she was employed by ELLP, she was not clear when that employment came to an end.[26]At the end of her submissions, the claimant indicated that even if the appeal was not upheld, she was seeking to have the case remitted to the Tribunal because she had some outstanding matters to raise. It was not entirely clear what these were. Submissions for the Respondents[27]For the respondents, Mr Fairley submitted that the appeal should be refused. The legal test for employment was not met in respect of the respondents. The Tribunal had properly looked for mutuality of obligation and control. They had looked at whether there was a contract and asked, if so, what was it? ( Cave v Portsmouth City Council UKEAT/0608/07). The answer was there was not a contract of employment between them. The Tribunal's answers to those questions were at paragraph 70 and the claimant had not sought to attack those conclusions on appeal.[28]Even if the claimant could show that she did not have a contract of employment with ELLP (not that that was conceded), that did not assist. It had to be shown she was employed by the respondents and the evidence showed that she was not.[29]Regarding the claimant's reliance on the sentence in the respondents' letter of 6 August 2003:
"Your salary and conditions of service remain unchanged."
[30]Mr Fairley drew attention to the way in which the claimant had responded to that statement at the time. It was clear, he submitted , from the terms of her letter of 10 August 2003, that she was at pains to stress that her salary and conditions in her ELLP post were not determined by the respondents and, moreover, that they could vary from the International Unit Manager post. She had in fact, at ELLP, secured better salary and conditions than when in the latter post. The statement in the letter was evidently understood by both parties to relate to the salary and conditions that she could hold the respondents to in the event of her ELLP post coming to an end.[31]Mr Fairley adopted the description of "secondment" set out in the case of Capita Health Solutions v BBC & Anr UKEATS/0034/07/MT , at paragraph 44:
"…secondment in its proper sense …….connotes a temporary assignation regarded, at least at its outset, as being on the basis that the employee will return to work directly for the seconding employer."
[32]He added that what parties themselves call a relationship is irrelevant, under reference to the judgment of Smith LJ in Cable & Wireless plc v Muscat [2006] ICR 975 where, at paragraph 31, he approved what was said on the subject in by MacKenna J in the case of Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497 :
"….if examination of the rights conferred and duties imposed by the contract led to the inference that the contract was a contract of service, it was irrelevant that the parties had declared it to be something else."
[33]He drew attention to the fact that the "Guidance" document relied on by the claimant was peppered with references to secondment being "temporary" and it was not, furthermore, a contractual document. The claimant failed to recognise, he submitted, that what made all the difference was the move in her case from a temporary fixed term to an indefinite term with ELLP.[34]Regarding payment of wages, Mr Fairley submitted that the question of who paid the wages was not determinative of who was the employer: Stephenson v Delphi Diesel Systems Ltd [2003] ICR 471 . Further, on a consideration of all the factors, as discussed in Cable and Wireless, Dacas v Brook Street Bureau (UK) Ltd [2004] ICR 1437 , Franks and Clifford v Union of Democratic Mineworkers [1991] IRLR 518 , it was evident that the Tribunal's findings in fact supported their conclusion. He relied particularly on the matter of control. After 10 August 2003, the respondents did not exercise control over the claimant; there was nothing that they could require of her after that date. As was indicated in the case of Clifford , control may be a central issue. Further, the Tribunal's conclusions were really inevitable given the way in which the claimant's case was presented in her ET1 and in her written grievance. Both documents stated that she had resigned from her post with the respondents. No evidence had been led to point to there being any continuing contract with the respondents after that date. Discussion and Decision[35]I am readily satisfied that the Tribunal did not fall into error. As was envisaged by Elias P. in the Cave case regarding the need for a tribunal to: "…clearly separate out the two issues of whether there was a contract …at all, and if so, what was its nature." the Tribunal addressed those two issues.[36]In doing so the Tribunal applied the principle that the irreducible minimum requirements before a contract of employment can be established are mutuality of obligation and control by the putative employer. It was correct to do so.[37]Having done that, the Tribunal required to look at the whole evidence regarding the overall circumstances. It did so. It made a series of findings in fact which were open to it on the evidence and which demonstrated that after 10 August 2003, the respondents had no right to require anything of the claimant, that she had no right to demand anything of them whilst she was working as ELLP's manager, that although they processed her salary they did so under an arrangement with ELLP whereby they deducted it from money that they would otherwise have paid to ELLP as part of their partnership contribution to its work and that they could not decide as to the level at which she was remunerated or as to what her conditions of service would or would not include. It was, in particular, clear from a reading of the respondents' letter of 6 August 2003 and her reply to it of 10 August 2003, that the reference to her salary and conditions remaining unaltered was a reference to what would happen if her ELLP post came to an end and she called on the respondents to fulfil their obligation to provide her with a post in their organisation. The fact that she was evidently keen to point out that it was not for the respondents to interfere with her salary and conditions in the meantime, since they were set by ELLP, fits entirely with the circumstances being that she was not the respondents' employee.[38]It is striking that in a number of respects the Tribunal found itself able to determine that there had been express agreement between the parties on matters of importance such as ELLP being the party who had the right to determine her salary level (para 35), as to the intention that the claimant should remain permanently in the post of Manager of ELLP until her retiral date (para 40), and that the term "open ended" was understood to mean "permanently" until that date.[39]The Tribunal also, I note, took account of the fact that the claimant worked at ELLP premises, that she had expressly relinquished her post with the respondents and that as from 10 August 2003, the claimant neither expected or intended to return to the respondents' organisation. I would add to that that, in her ET1, her grievance document and in the course of the appeal hearing, she made reference to having resigned from her post with the respondents.[40]It was not, I consider, fair to criticise the Tribunal as having failed to take account of evidence. The claimant lists, in her skeleton argument, various ways in which she says that the Tribunal failed in that respect. They are all matters in respect of which the Tribunal made findings in fact but from which the claimant considered it should have concluded that the respondents were her employer. An example was the claimant's suggestion that it had wrongly failed to take account of the fact that her placement with ELLP was a seconding arrangement. That is not justified. Firstly, the Tribunal sets out in detail a full account of the "seconding" events in the claimant's case. Secondly, the label given to an arrangement by parties is not determinative, as was recently observed in the Cable and Wireless case. It may be that parties use a label that is as wrong as it would be to call an apple a pear. Another was the payment of her salary by the respondents for which , as I have noted, there was an explanation that showed they were doing so in terms of an arrangement with ELLP not on account of any continuing obligation being owed to the claimant. Another was the extent of mutual interest as between the respondents and ELLP; it was readily explained by the partnership arrangement that was ELLP but it does not show that the respondents continued to employ the claimant. What mattered was to look at what was really happening by considering all the facts together and to ask whether the minimum requirements of a contract were present. That is what this Tribunal did.[41]Also, as regards the claimant's reliance on the respondents' "Guidance" document, I agree that the document was of no relevance to the issue. The claimant knew nothing of the document at the relevant time so she could not have been proceeding on the basis of any understanding that its terms applied. Further, it is plainly(a) not intended to be a contractual document and(b) provided for the purposes of giving guidance in cases of temporary secondment. The claimant's position with ELLP may have been regarded as a temporary one before August 2003 but it clearly did not fall into that category thereafter.[42]The question of whether or not a person is employed by another is a question of law. But, as has been commented on numerous previous occasions, the resolution of that question is entirely dependent upon a construction of the findings made on the evidence which may be documentary, oral, or both. It is not normally open to this Tribunal to interfere with findings of fact. This is not one of the rare occasions on which it could do so and it was not suggested that it should. As was commented by Mann LJ in the Clifford case:
"..The present case is one where the relevant material is an amalgam of documents and facts and it can thus be described as a case of mixed law and fact. This description does not, however, in my judgment mask the reality that the answer to the question is determined by the determination and evaluation of the relevant material. This is the task of the Industrial Tribunal and is not for either the Appeal Tribunal or this Court."
[43]I recognise that, at times, the claimant sought to refer to matters which she asserted were the case but had not featured in the evidence and do not, accordingly, feature in the findings in fact. The mere fact that an appellant does so, does not, of itself, amount to one of those rare occasions where this Tribunal could properly consider fresh evidence.[44]Put shortly then, a wealth of evidence was available to the Tribunal in respect of which it made relevant findings in fact, to the effect that after 10 August 2003, there was no mutuality of obligation which involved control by the respondents of the claimant to any extent. There are no grounds on which their conclusion that the respondents were not the claimant's employer can be interfered with.[45]As regards the claimant's motion for a remit even in the event of the appeal not being successful, it arose from the claimant having indicated to the Tribunal that she may seek to add to her claim at some future date. It seems that she possibly considered that she might have a discrimination claim that was as yet unstated or a claim against the respondents as employers in respect of a different period from that considered by the Tribunal. The Tribunal quite properly allowed for the possibility of her doing so by refraining from dismissing the case against the respondents and ordering that further procedure be applied for. That was reflected in the Tribunal's order which included as a third paragraph:
"that parties make application to the Tribunal regarding further procedure in the case."
[46]That was as at November 2006. No such application has been made. In particular, no application to amend has been made either before the Tribunal or before this tribunal. The claimant gave no clear indication of any relevant case that she considered she had against the respondents. Furthermore, no indication was given of anything which pointed to any chance of the claimant now being able to overcome the considerable time bar hurdles which would stand in her way. Disposal[47]I will pronounce an order refusing this appeal. In all the circumstances, I am satisfied that I should also pronounce an order dismissing the claimant's claim.