MR D J FRANCE v LANCASTER TRAINING SERVICES LTD [2009] UKEAT 0235_09_0110

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2009] UKEAT 0235_09_0110Case No Appeal No. UKEAT/0235/09Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MR D J FRANCEAPPELLANTLANCASTER TRAINING SERVICES LTDRESPONDENT
Before
His Honour Judge PugsleyDate 1 October 2009
[1]APPEARANCES For the Appellant MR S WALKER (Solicitor) Messrs Livingstons Solicitors 9 Benson Street Ulverston Cumbria LA12 7AU For the Respondent MR B WILLIAMS (of Counsel) Instructed by: Messrs Oglethorpe Sturton & Gillibrand Solicitors 16 Castle Park Lancaster Lancashire LA1 1YG SUMMARY JURISDICTIONAL POINTS Worker, employee or neither Employment Tribunal imported into the test of whether the Claimant was an employee; the test in tripartite agency cases. Further it failed to make clear findings of fact on which it accepted there was a conflict of evidence. There was a paucity of findings of fact on the working practices of the Claimant with "employee". HIS HONOUR JUDGE PUGSLEY Introduction This is an appeal from the Decision of Employment Tribunal Judge Coles on 4 February 2009 where he decided at a Preliminary Hearing Review that the Claimant was not an employee.[2]We are well served by the care and consideration given by Employment Judges often, though not in this case, without the help of representatives. Anyone sitting here will know only too well how many times you have to tell litigants in person, and sometimes representatives, that Employment Tribunals are the judges of findings of fact and a very wide discretion is given to tribunals as to what findings they make and what findings they make as to the significance of fact. Sadly in this case I cannot see I have any alternative but to remit the case because I think it is fundamentally flawed.[3]It is fundamentally flawed because for reasons that are not clear, and having regard to the high calibre of the advocates who are in the case, the Chairman laboured under the misapprehension that the test that is applicable in triparte agency agreements was applicable to the decision as to whether or not a person is an employee. In a nutshell, if I may say, the issue is whether the test of the Appellant being an employee or self-employed has been confused with the test in tripartite agency cases. The Facts[4]The facts are fairly straightforward. The Claimant and Appellant worked for the Respondent on and off for some 20 years. He left the employment in 1997 and in May he approached Mr Horabin, the boss of the Respondent's company, inquiring whether there was a position to provide training services. At that stage the Claimant was working for the Camping and Caravanning Club (the 'CCC'). Mr France was quite happy it seems to accept a position on the basis he would submit invoices to the Respondent for the work carried out, and he would be responsible for his own tax and national insurance. The Tribunal note that there was a conflict of evidence in that Mr Horabin's evidence was it was the Claimant's suggestion he should work for the Respondents as a self-employed contractor so that his work would not interfere with his work for the CCC. The Claimant said it was not his suggestion, although he accepted he would be dealing with his own tax and national insurance and would be submitting invoices for the work he carried out. That conflict of evidence is never resolved in the Decision. The practice was that the Claimant would provide Mr Horabin with dates when he would be unavailable to work and then a rota was drawn up taking those into account. The Claimant continued to work for the CCC although it was noted this was mainly at weekends.[5]In paragraph 8 it is noted that:
"Mr Horabin told me that the claimant would on a number of occasions turn down work if it did not suit him and would often leave work early when it suited him. He told me that the claimant described himself as 'being his own boss'. The claimant on the other hand maintained that he always performed the work he was required to do and felt obliged to turn up for work when it was offered to him. He was paid on an hourly basis and he generally submitted invoices on a monthly basis."
[6]There is no finding of fact as to how that class of evidence. The nearest it comes to surfacing as a find of fact is in paragraph 17:
"Although I accept that the claimant would invariably turn up for work when he was expected to be there, there is no doubt that the rota under which he worked was drawn up taking into account his other obligations towards CCC. I am also of the view that, had the respondent concluded that there was no work available for him on a particular day, it would not have felt obliged to provide the claimant with work. To that extent, there was not as much mutuality of obligation as would normally be found under a contract of employment."
[7]That is not a finding about whether the Tribunal accepted or did not accept Mr Horabin's evidence that the Claimant would turn down work if it did not suit him, or often leave work early when it suited him, or that he described himself as being his own boss. There is no finding of that. The Respondent employed other instructors who were dealt with as employees. There is no finding as to the extent to which their conditions of service, if any, differed from that of the Claimant, nor any finding as to the extent to which the Claimant's work practice differed under the alleged self-employment; from the time when it is accepted he was employed.[8]The reality is in these cases, as was made clear by Mummery LJ in the case of Hall (Inspector of Taxes) v Lorimer [1994] 1 All ER 250 , that when you are considering the test, it is not a mechanical exercise of running through items on the check list to see whether they are present in or absent from any given situation. The object of the exercise is to paint a picture from the accumulation of detail. It is a matter of evaluation of the overall collected data that is not necessarily the same as the sum of the individual parts.[9]As Mr Williams in his skeleton argument has urged each case has to stand on its facts and employment judges are better placed to perform that task. He points out that the Judge was entitled to consider, and did consider, the following criteria in reaching his conclusion that there was no contract of employment; the submission of invoices for set amounts of work done; that the Claimant was free to work for others; namely the Caravan Club, how the parties saw the relationship, and the arrangements for payment of income tax and national insurance. It is contended that the Judge did not give undue prominence to the parties' intention although it was a matter he did consider, and he says it is inconceivable the Tribunal would conclude the Claimant was in contracted employment, in the circumstances.[10]It is quite right there are matters here that point to self-employment. But there are also matters that point to employment, such as the finding there was no doubt the Claimant was expected to perform the work carried out in person. The fact that his rota was drawn up taking into account his other obligations towards the CCC is relevant, but I am bound to say that there are limits to its relevance. It is perfectly possible to have concurrent employment. X could both work as a doctor and work as a lecturer, Y can work as a cleaner or care assistant. Although having more than one "job" can smack of self-employment, it is not determinative. I cannot say, at the end of the day, that it is inevitable that Mr France would be found to be self-employed. He may very well be; there are strong arguments. I accept that. But one cannot be confident that this tribunal has applied the right test when it contains such phrases as paragraph 18:
"However, even if all three factors under the 'irreducible minimum' test exist, that does not necessarily mean that there is a contract of employment. It is only necessary to impose such an implied term if it is necessary to do so in order to reflect the true nature of the arrangement between the parties."
[11]Then again at paragraph 21:
"I regard the intention of the parties in this case as being of considerable importance. Parties are free to enter into contractual arrangements as agreed between them and the Courts or Employment Tribunals will only interfere with the arrangements made if it is necessary to do so in order to reflect the true nature of the arrangement. The arrangement between the Claimant and the Respondent worked satisfactorily for both parties and, in those circumstances, I do not consider it necessary to imply a contract of employment between them when that was clearly not their intention."
[12]The view that courts or employment tribunals would only interfere with the arrangements made if it is necessary to do so in order to reflect the true nature of the arrangement is something of a misdirection in law. Young & Woods Ltd v West [1980] IRLR 201 is a case in which the Court of Appeal held that the industrial tribunal and the majority of the EAT had correctly concluded that the Respondent was an employee employed under contract of service, notwithstanding his request he be treated by the Appellant as self-employed. Since the Respondent was an employee within the meaning of the statutory definition, the industrial tribunal had jurisdiction to hear his complaint of unfair dismissal. As Stephenson LJ pointed out, if it were the case that the parties could agree definitively what their status was, that would offend the anti-avoidance provisions contained in the Act.[13]It is true that there have been times where the courts have expressed exasperation that a Claimant is allowed to say he is self-employed for the purpose of minimising taxation, but an employee for the purpose of claiming unfair dismissal. I come back to Stephenson LJ's temperate remark where he said:
"21. …The answer is that he and his work should be classified not by appearance but by reality. If he is really self-employed the Industrial Tribunal should refuse to consider his statutory rights as an employee. If he is really an employee or servant the Inland Revenue should reclaim tax deductions which have been granted to him as self-employed; and, if this court declares that the true legal position between him and his employers is not in accordance with the agreement deliberately chosen by the parties and put before them for their information, I do not suppose that the Inland Revenue would fail to discharge their statutory duty."
[14]In other words it seems to me clear although it may be distasteful, although not necessarily in this case, a Claimant may have been classed as self-employed but still be entitled to claim statutory rights. There is a requirement of a tribunal to have regard to the intention of the parties and their definition of the status of the individual but a tribunal is not bound by it. Conclusion[15]I do not think it would be necessary for me to go through all the helpful authorities to which reference has been made. I allow this appeal on the basis of a fundamental misdirection by confusing the test of employment with the test in tripartite agency cases. That is not a mere technical matter but suffuses and colours the whole of the case. There is a failure to make findings of fact on issues where, as the Tribunal recognised, there was a conflict of evidence. The conclusion to which the Tribunal judge comes to is not one where one can see the factual basis upon which he has reached it, and identify the paving stones of the route by which he reached the conclusion. There are grounds, strong grounds, for the contention that this is self-employment, but equally those cannot be allowed to mutate into being conclusions without, in fairness, the Claimant's contentions fairly considered and weighed. This is not easy. Different pointers arise in this case, as I have already indicated. But there has been no real attempt, if I may say so, to grapple with the complexity of the issue. The decision is vitiated by the fundamental misdirection about necessity, which really has no part in this aspect of the law.[16]This case to be considered by another Employment Judge: The appeal is allowed to that extent.