ESS Support Services LLP v Pabani & Anor (Contract of Employment) [2015] UKEAT 0161_15_1612

EAT
ESS Support Services LLP v Pabani & Anor (Contract of Employment)
[2015] UKEAT 0161_15_1612 · 2015-12-16
[1]These are two matters before this Appeal Tribunal arising from the decision of the Employment Tribunal at London (South) which is dated 10 November 2014 and was sent to the parties on 17 November. The Tribunal comprised Employment Judge Fowell sitting alone. For convenience, I will refer to the Claimant and Respondents as they were in the Employment Tribunal.[2]There is also a preliminary application before me that arises from an Order made by the Employment Tribunal on 8 February 2015 in relation to the form of the Claimant’s witness statement to be included in the bundle for this appeal hearing. I will return to that matter in due course.[3]In brief, the underlying claims arise from allegations by the Claimant both that he was subjected to detriments as a result of making protected disclosures and that he was unfairly dismissed. The Employment Tribunal decided that the claims against the First Respondent, Compass Group plc, would be struck out. It also decided that it had jurisdiction to determine the claims against the Second Respondent, ESS. The Second Respondent now appeals against the decision that the Tribunal has jurisdiction to consider the claims against it. The Claimant cross-appeals against the decision striking out his claim against the First Respondent. Factual Background[4]The Claimant is a British citizen, and his home is in this country in Milton Keynes. He commenced employment on 9 September 2011. His employment came to an end on 13 December 2013. The Claimant was recruited in the United Kingdom pursuant to an offer letter dated 26 July 2011. That letter was signed by Ron Kulkarni, Managing Director. It offered the position of Finance Director to the Claimant subject to receipt of satisfactory references and an appropriate Kazakh work permit/visa. It said that the position would be on a rotational basis, with Kazakhstan being “your host country” and the UK being “your home country”.[5]On 9 September 2011 the Claimant travelled to Kazakhstan, where he signed an expatriate’s employment agreement with ESS, which has been known in the case as “ESS1”. He commenced work in Kazakhstan on the same date as Finance Director. The terms of ESS1 were set out in three languages including English, which was in the third and right-hand column. That document said:
“This employment agreement … sets out the terms and conditions of your employment with ESS Support Services LLP …”
[6]It went on to state that:
“… You and the company represented by: Shulakova Gulmira, HR Director acting on basis of Power of Attorney issued on 11 th of January 2011, authorized by General Director Shirang Kulkarni [that is, the person known as “Ron”] acting on basis of Charter, hereinafter individually referred to as a “Party” and collectively as the “Parties”.”
[7]The agreement continued:
“This Agreement and our letter offering employment supersedes any other statement, agreement or arrangement which may have been entered into by the Company and you, all of which shall be deemed to have terminated by mutual consent as at the date of this agreement.”
[8]Clause 4 of the agreement was headed “Pay For Work” and stated in sub-paragraph (a):
“Your salary will be a gross salary, which equates to 972,703 KZT net per hour after local tax deduction and exchanged according to currency rate of employment agreement conclusion date.”
[9]Sub-paragraph (e) referred at the end to procedure “stated by Kazakhstan law”. There were several other references to Kazakhstan law in the agreement (see, for example, sub-paragraphs (f) and (g) of the same clause). There was also reference to the legislation of “ROK” - that is, the Republic of Kazakhstan - in clause 5(e).[10]Clause 8, which had the heading “Your Rights And Responsibilities”, included at sub-paragraph (a)(I) the right to “Enter into, change, amend or terminate the Agreement in accordance with Kazakhstan law”. There was also reference, at sub-paragraph (a)(XIV), to the protection of the Claimant’s “rights and legal interests by all means non-conflicting to Kazakhstan law”.[11]Clause 24, which was headed “Miscellaneous Provisions”, included an important sub-paragraph, (g), which made it clear that:
“For violation of the provisions hereof the Parties shall be liable in accordance with Kazakhstan law. Subject to Kazakhstan law, the Parties may enter into the agreement on your financial liability, which shall be an integral part of this Agreement.”
[12]Clause 23 was the jurisdiction clause and stated that:
“This Agreement and its annexes are subject to Kazakhstan law. The place of jurisdiction is Kazakhstan.”
[13]ESS1 was signed by Gulmira Shulakova on behalf of ESS. She gave evidence before the Employment Tribunal, and notes of that evidence are before this Appeal Tribunal, although, as events turned out, it has not been necessary to go through them in any great detail.[14]Also on 9 September 2011 the Claimant signed an addendum with ESS, which has been known in this case as “ESS1A”. This provided that it set out additional agreements that had been made between ESS and the employee. This too was signed by Ms Shulakova on behalf of ESS as well as by the Claimant. I should observe that in the case of both agreements the signatures of each side appear on every page of the document. Clause 10 of ESS1A provided that:
“WAIVER AND GENERAL RELEASE - The Employee agrees to and does waive any claims he may have in connection with his employment with the Company. The Employee further agrees to and does release and forever discharge the Company, its current and former affiliates, officers, directors, shareholders, employees, agents or advisors from any and all claims and causes of action, known or unknown, arising out of or relating to the Employee’s employment with the Company or the termination thereof. This release does not affect the Employee’s right to enforce the terms of this Agreement.”
As will become apparent in the course of this Judgment, it seems to me that the last sentence of that clause is of particular significance.[15]On 16 September 2011 the Claimant signed a further agreement, the ESS rotational worker contract, or “RWC”. This agreement expressly stated that it ran concurrently with the Kazakhstan jurisdiction agreement dated 9 September 2011 and provided that:
“… In the event of any contradiction between the agreement and the Kazakhstan agreement, then the Kazakhstan Agreement takes precedence.”
[16]From the heading it is clear that the agreement was between the Claimant and ESS Support Services Kazakhstan, which was defined as “the ‘Company’”. Clause 2.4 provided that:
“You shall not undertake any work for anyone else while you are employed by the Company nor shall you, subject to clause 23.3, be employed, engaged, concerned or interested (whether directly or indirectly) in any trade, business, undertaking or occupation other than that of the Company or any Group Company . In addition, you shall notify your Line Manager of any voluntary or unpaid work that may affect your performance of your Role in accordance with this Agreement.”
[17]Before me great stress has been placed by the Claimant on the fact that there was reference not only in that clause but throughout the RWC to the “Group Company”. Be that as it may, in my judgment it is clear that the RWC was itself a contract only between the Second Respondent and the Claimant, and not with the group or group companies more generally. It is not necessary to set it out in terms, but clause 13.7 gave the company an absolute discretion to require the Claimant to take gardening leave for all or part of the period of his employment.[18]It is necessary to set out the law and jurisdiction clause, which is to be found in clause 27. Clause 27.1 stated:
“This Agreement and any non-contractual obligations arising out of or in relation to this Agreement shall be governed by, and shall be construed in accordance with, the laws of England and the parties submit to the exclusive jurisdiction of the English Courts.”
[19]There was an annexe to the RWC, and, as I have mentioned, particular emphasis has been placed by the Claimant on the fact that the concept of “Group” was defined in that annexe to mean:
“Compass Group PLC, its parent companies (if any) and all subsidiaries of Compass Group PLC and such parent companies from time to time …”
That of course would have included, as will be seen, ESS.[20]On 13 January 2012 the Claimant entered into a second agreement with ESS, which is known as “ESS2”, and was materially in the same terms as ESS1. On 13 December 2012 the Claimant entered into a third agreement with ESS, known as “ESS3”, which again was in materially the same terms as ESS1. The reason for there being these different contracts in time was that, as was common ground before me, a work permit and visa were required for anyone in the Claimant’s position to be able to work in Kazakhstan. The evidence for that before the Employment Tribunal was contained, for example, in paragraph 10 of the witness statement of Jane Kingston on behalf of the First Respondent, which stated, so far as material:
“All workers whether rotational or local must be employed on a Kazakhstan contract in order to work in that country and obtain a visa. …”
[21]There was an initial work permit, which had been obtained with effect from 12 August 2011, before this Claimant was in fact employed but which extended only to 13 December 2011. Between 13 December 2011 and 13 January 2012 the Claimant did not have a work permit and therefore returned to the UK. When a second work permit was obtained, he was able to enter into ESS2. When that work permit in turn expired, he had to and did enter into ESS3.[22]The Employment Tribunal made a number of findings of fact about the work that was done by the Claimant. In particular, first, the great majority of the Claimant’s work was carried out for the benefit of ESS operations in Kazakhstan. His duties also extended to operations in Azerbaijan. He obtained visas for travel to Azerbaijan and Russia and held meetings in Spain, Dubai, London and Mongolia. Again, these visits were largely for the benefit of ESS (see paragraph 39 of the Judgment). The Claimant’s main role as Finance Director in Kazakhstan was to monitor ESS contracts (see paragraph 10 of the Judgment). The Claimant had no desk or equipment in the UK and, “the main reason for his visits to the UK were [sic] rest and recuperation” (see paragraph 43 of the Judgment).[23]On 8 May 2013 the Claimant was asked to leave his office and on the following day to leave Kazakhstan. There is a dispute between the parties as to the reason why. On ESS’s case this was due to a breakdown in relationships; on the Claimant’s case this was because he had made protected disclosures. On 10 May 2013 the Claimant returned to the UK. He was then effectively suspended for a period of some 200 days (see paragraph 50 of the Judgment). The Tribunal found as a fact that he carried out “no work” during this period. On 10 September 2013 the Claimant was dismissed with notice by a letter sent by Ms Kingston signed as “Group HR Director, Compass Group PLC”. That letter stated in the middle of the first page that:
“You are employed pursuant to a service contract made between you and ESS Support Services LLP … which was signed in 2011 but is undated, as supplemented by a letter regarding ancillary matters dated 26 July 2011 written by ESSLLP and a Kazakhstan law governed employment contract number 046-12 dated 13 December 2012 covering the period from 13 December 2012 to 13 December 2013 which you signed with ESSLLP on 18 December 2012 (together the “Service Contract”). …”
Pausing there, it is apparent to me that the phrase “Service Contract” therefore was not a reference only to the RWC but to the entire body of documents that had already been referred to in the letter. The letter continued that the Claimant was entitled to receive three months’ notice and gave such notice so that his employment would terminate on 13 December 2013. It then continued:
“… Pursuant to clause 13.7 of the Service Contract you will be placed on Garden Leave for the duration of your notice period. …”
[24]When read in its context it is plain that that is a reference to clause 13.7 of the RWC. However, in my view, that does not mean that it was acknowledged in this letter that the only place in which the agreement with the Claimant was to be found was in the RWC. As I have already mentioned, the phrase “Service Contract” was defined more broadly than that. On the second page the letter stated:
“For the avoidance of any doubt, this notice of termination of employment is given by CPG [in other words, Compass Group] as well as on behalf of, and has been authorised by, ESSLLP.”
[25]In accordance with that letter the Claimant remained on gardening leave until his employment came to an end on 13 December 2013.[26]I turn to some features of the Second Respondent. ESS is not a UK company. It is a limited liability partnership (LLP) in Kazakhstan. It offers a multi-service capability to major companies and organisations operating in oil and gas, remote mining, construction and the defence sector. Its largest client, which accounts for about 90 per cent of its revenues, operates one of the largest oilfields in the Caspian Sea (see paragraph 8 of the Employment Tribunal’s Judgment). Also in the same paragraph it was said that over 5,000 people live and work on the oilfield. ESS provides food, cleaning services and vehicles together with staff to maintain those vehicles and much more, “all of which requires a small army of staff”. At paragraph 9 it was said that ESS employs about 4,000 staff in Kazakhstan of whom 99 per cent are local nationals; 30-35 are expatriates. Of these, there are 11 UK nationals, 9 of whom rotate back to the UK when not working. Others are from India, the US, Thailand, Turkey, the Philippines and Algeria, who rotate home or to another country of their choice. ESS is a wholly owned subsidiary of a Dutch company, Compass Group International BV. That Dutch company is owned through a chain of companies by the First Respondent, Compass Group International plc (see paragraph 7 of the Judgment). The Employment Tribunal’s Judgment[27]The hearing that took place before Employment Judge Fowell on 3-4 November 2014 was to determine a number of preliminary issues set out at paragraph 1 of the Judgment. There were five issues in total; but issues 3, 4 and 5 were left over by agreement. Issue 1 was whether the Claimant was an employee or worker of the First Respondent. Issue 2 was whether the Tribunal had territorial jurisdiction to hear the claims. At paragraph 4 the Employment Judge said that the first two issues were linked. At paragraph 5 he recorded that the Tribunal heard evidence from the Claimant himself and from three witnesses on behalf of the Respondents. They were: Ms Kingston, the First Respondent’s Human Resources Director, based in the UK; Mr Kulkarni, the Second Respondent’s Managing Director; and Ms Shulakova, the Second Respondent’s HR Director.[28]The Employment Tribunal set out its findings of fact from paragraphs 6 to 55 of the Judgment. Some of those findings are uncontentious; however, others are said by the Second Respondent to be unsupported by any evidence and to contradict the evidence that in fact was before the Employment Tribunal. The Employment Tribunal set out what it understood to be the applicable legal principles from paragraphs 56 to 78. That section of the Judgment included lengthy citation from a number of authorities, many of which have also been referred to me (see in particular the list at paragraph 56 of the Judgment).[29]The Employment Tribunal then sought to apply the law to the facts before it at paragraphs 79 to 99 of the Judgment. The Employment Judge first addressed issue 1, at paragraphs 79 to 81. At paragraph 79 the Employment Judge reminded himself that the test in law for whether there was an implied contract of employment between the Claimant and the First Respondent is whether there was any necessity to imply such a contract. He cited the case of James v London Borough of Greenwich [2008] ICR 545 , to which he had made reference at paragraph 76. At paragraph 80 of his Judgment the Employment Judge concluded:
“80. The degree of connection between Ms James and the client for whom she worked was far greater than that between [the Claimant] and the first respondent. I find that there is no necessity to imply a contract between them, since the work [the Claimant] carried out for the first respondent is adequately explained by the contractual arrangements he had with ESS. Accordingly I reject the argument that the claimant had an implied contract of employment with the first respondent.”
[30]At paragraph 81 of his Judgment the Employment Judge considered an alternative argument that had been advanced on behalf of the Claimant that the Claimant was a “worker” for the First Respondent within the meaning of the relevant legislation; that is, section 230(3) of the Employment Rights Act 1996 (“ERA”) as extended by section 43K(1)(a). On this argument he concluded as follows:
“81. … Section 43K(a) [sic] extends the scope of protection to agency workers. Where a worker has been supplied to an end-user client, and there is some doubt as to whether the worker is providing work for the end-user or the agency, this section makes clear that he or she is to be regarded as working for the end-user for these (whistleblowing) purposes. That has no application in the present case, where there is no dispute that the claimant was providing work for ESS, whether supplied by the first respondent or not. Accordingly the claims against the first respondent must be struck out.”
[31]The Employment Tribunal then turned to issue 2. At paragraph 82 the Employment Judge found that this was a situation of the type contemplated in Autoclenz v Belcher [2011] ICR 1157 . He said there was a substantial inequality of bargaining power and that the focus had to be on that bargaining power and not the Claimant’s comprehension of the contracts he was asked to sign. At paragraph 83 the Employment Judge found that ESS1 “did not in truth represent the intentions of the parties”. He said that those intentions were set out in plain terms in the offer letter of 26 July 2011. He also found that the rotational worker contract:
“83 … effectively encapsulates those terms and did therefore represent the intention of the parties, in particular (and this was only in that contract) the fact that the salary would be converted to sterling and paid at the relevant sterling rate each month.”
[32]I pause only to note that in fact, as I have outlined in my summary of the relevant terms of the various agreements in this case, ESS1 also contained a reference to the salary to equate to a certain sum in Kazakh currency and then to be converted. At paragraph 84 the Employment

Judge said:

“84. … I accept the uncontested evidence of the claimant that he was assured at the time of signing ESS1 that this was purely to comply with Kazakh law. The inference is that it was not intended to have any wider application.”
[33]At paragraph 85 he said:
“85. … the addendum, ESS1A would also have been superfluous if ESS1 had been, as it appeared on its face, the genuine Employment Agreement between the parties. Not only does the existence of ESS1A undermine the effect of ESS1, but clause 10 in particular largely deprives it of any force. This was the intention behind this clause 10 and that was the assurance that the claimant received.”
[34]I note again in passing only at this stage that that is not how I read clause 10 of ESS1A at all. The general thrust of that clause is to give, as its heading suggests, a waiver and general release for existing liabilities. However, the final sentence, which I have already emphasised, makes it crystal clear in my view that that release “does not affect the Employee’s right to enforce the terms of this Agreement”. That clause did not deprive the agreement of any force, largely or at all. At paragraph 86 of his Judgment the Employment

Judge said:

“86. Accordingly, the Rotational Worker Contract is the document which comprises the relevant terms of the agreement between the parties. I note that it was expressed to defer to ESS1 in the event of any disagreement, but I find that this too was part of the contractual disguise and did not represent the true intentions of the parties. …”
[35]Although the terminology used by the Employment Judge is not felicitous, it is clear what he was saying in that passage. At paragraph 87 the Employment Judge said that it followed that ESS2 and ESS3 did not alter the position:
“87. … They were not in truth intended to replace or detract from the Rotational Worker Contract, merely to ensure that the requirements of Kazakh law were formally met.”
[36]At paragraphs 88 to 89 the Employment Judge said that even if he was wrong in concluding that ESS1 should be disregarded from the outset he found that by the time of the Claimant’s dismissal it was no longer operative. He said that the dismissal letter was sent by the First Respondent on its own behalf and on behalf of the Second Respondent, that it followed the exhaustion of the First Respondent’s grievance procedure and that:
“89. … for all practical purposes the second respondent had washed its hands of the claimant by that stage.”
[37]At paragraph 90 he concluded as a result that the Claimant had a contract of employment with the Second Respondent at all times, that contract was the RWC and that contained a UK law and jurisdiction clause at clause 27.[38]From paragraph 92 of his Judgment the Employment Judge turned to the “comparative exercise” required by the authorities in this area of law. Having set out the parties’ submissions on this aspect of this case, he concluded at paragraph 97:
“97. Overall I find that aspect decisive in weighing the competing claims. In practice the claimant’s links with the UK during his work in Kazakhstan were regular and substantial, and these links were entirely with the UK in the final stage. …”
[39]That reference to the aspect of the case that he found to be decisive is a reference back to paragraph 96 and what had been submitted on behalf of the Claimant by counsel who then acted for him. In relation specifically to the last 200 days of his employment, when the Claimant was in the UK, it was submitted that although the Claimant was doing no work under the contract he was subject to continuing obligations of the contract as an employee and co-operated with the grievance process. He proposed returning to Kazakhstan but was refused; so, he was under the First Respondent’s control, it was submitted. This is an important feature of the case, it was submitted, largely absent in one of the authorities to which I shall return, called Ravat v Halliburton Manufacturing and Services Ltd [2012] ICR 389 . It was finally submitted (paragraph 96) that the Second Respondent had largely washed its hands of the Claimant at the time of dismissal.[40]At paragraph 98 of his Judgment the Employment Judge observed that the dismissal took place in the UK “to a UK citizen and resident”. Again, the language is not entirely felicitous, but it is clear what he meant in that passage. He also observed that the whistleblowing allegations were all explored in the UK. He found that the instant case concerned the First Respondent, which is a UK company, and was “the prime mover in the claimant’s dismissal (as agent for the second respondent)”. However, he thought the employer’s normal place of business was in practice of less significance in this case than in any of the authorities cited. At paragraph 99 he concluded:
“99. Accordingly I find that the claims have a stronger connection with the UK than Kazakhstan and accordingly the claims can be heard by an Employment Tribunal in the UK.”
The Claimant’s Preliminary Application[41]This arises, as I have said, from an Order of Employment Judge Fowell dated 8 February 2015, but first it is necessary to outline the background procedural history. After the initial decision of the Employment Tribunal in November 2014, there was an application by The Guardian newspaper for an unredacted copy of the Claimant’s witness statement. That was granted at the time by the Employment Judge, but that was the subject of an appeal to this Appeal Tribunal. The hearing of that appeal was expedited. After that hearing in a decision dated 30 December 2014 Mitting J allowed the appeal and remitted the matter to the Employment Judge for reconsideration. On reconsideration Employment Judge Fowell made the Order of 8 February 2015. He decided that only a redacted version of the Claimant’s witness statement should be provided to The Guardian . There has been no appeal against that Order by The Guardian or anyone else. Any such appeal made now would be well out of time.[42]As things stand there is therefore an extant and valid Order of the Employment Tribunal that has not been appealed against, let alone successfully appealed against. However, what the Claimant has filed before this Appeal Tribunal is a document headed:
“Application to vary the Order of Employment Judge Fowell Sitting Alone 8 th February 2015 Redaction of Witness Statement”
[43]What the Claimant seeks to do is to introduce the unredacted version of his witness statement in the appeal bundle for this hearing. That was refused by the Registrar, in a letter that was sent on the Registrar’s behalf on 26 November 2015. In the same letter the Claimant was informed that if he wished to make further representations he should do so at this hearing, which he has done, but that does not mean that there is a properly constituted appeal before this Appeal Tribunal from the Order of 8 February 2015. It is of fundamental importance to recall that the Employment Appeal Tribunal Rules 1993 as amended state in Rule 3(1) that:
“(1) Every appeal to the Appeal Tribunal shall, subject to paragraphs (2) and (4), be instituted by serving on the Tribunal …”
There then follows a list of various documents, including (sub-paragraph (a)) a Notice of Appeal in accordance with the forms that are then mentioned. Not only that, but, as I have already indicated, any such appeal has to be made in time. It must be in the proper form so that the Respondent can have an opportunity to respond to it in a proper way. As is well known, this Appeal Tribunal then considers the papers and a Judge decides initially on a “sift” whether there are reasonable prospects of success. Appropriate directions can then be made depending on the circumstances.[44]All of these procedural rules are there for good reason in the interests of justice for the fair and orderly disposal of appeals. There cannot be an appeal in effect launched by a side route in the course of preparing the bundle for a hearing of this sort. The Claimant relies on paragraph 8(1) of the Employment Appeal Tribunal Practice Direction in this regard. He submits that that makes it clear that the bundle must include documents used before the Employment Tribunal. However, as always, such provisions need to be read fully, fairly and in context. What the Practice Direction that he in fact relies on, as cited by the Claimant himself at page 2 of his application, says is that the bundle must include only documents used before the Employment Tribunal and that are considered to be necessary for the appeal. That is a sensible provision for making sure that documents that were before the Employment Tribunal and used by it are not in the appeal bundle simply for the sake of it but only if it is necessary to include them to deal with the issues that arise on appeal. That does not bear the weight that the Claimant has sought to place upon it.[45]In fact, as things have turned out, it has not been necessary for the disposal of the issues in this appeal and cross-appeal for any reference to be made to the unredacted version of the Claimant’s witness statement. This reinforces the point that it would be unnecessary and wrong for it to be included. The Claimant before me has also relied on a decision by Mann J in Cox v Jones [2004] EWHC 1006 Ch That is a case about witness statements and, while no doubt correct on its own facts, has no relevance, in my judgment, to the circumstances of the present case. Accordingly, this application by the Claimant is refused. Cross-Appeal by the Claimant[46]Although it is a cross-appeal, I will deal with this at this stage because logically it falls to be dealt with now; that is also the order in which the Employment Judge dealt with issues 1 and 2 before him. As I understand them, the grounds on which the cross-appeal is made are in essence the following, which I derive in particular from paragraphs 8 to 10 of the cross-appeal. First, it is submitted that the Employment Tribunal erred in law and reached a perverse conclusion that the Claimant was not an employee of the First Respondent for the purposes of section 230 ERA . In the circumstances, it was necessary to imply a contract of employment between the Claimant and the First Respondent in order to reflect the reality of the situation, so it is submitted. Secondly it is submitted that in the alternative the Employment Tribunal erred in law in failing to consider whether the Claimant was properly to be regarded as a “worker” of the First Respondent for the purposes of section 230(3)(b) of the 1996 Act .[47]Section 230 states in subsection (1) that generally speaking in the Act “employee” means:
“(1) … an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment.”
[48]However, subsection (3) defines the broader concept of “worker” as meaning:
“(3) … an individual who has entered into or works under (or, where the employment has ceased, worked under) - (a) a contract of employment, or (b) any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual; …”
[49]Returning to the grounds in support of the cross-appeal, in the further alternative it is submitted that the Employment Tribunal erred in not concluding that the Claimant fell within the extended definition of “worker” in section 43K of the 1996 Act . That provision states:
“(1) For the purposes of this Part “worker” includes an individual who is not a worker as defined by section 230(3) but who - (a) works or worked for a person in circumstances in which - (i) he is or was introduced or supplied to do that work by a third person, and (ii) the terms on which he is or was engaged to do the work are or were in practice substantially determined not by him but by the person for whom he works or worked, by the third person or by both of them, …”
[50]At the hearing before me the Claimant has sought to argue that there was in fact an express contract between him and the First Respondent and that that was contained in the RWC. He also submits that the point was conceded before the Employment Tribunal in particular in the Respondents’ form ET3. He places reliance upon what was said in paragraph 9 of that document, where it was said:
“It is accepted that the “Rotational Worker Contract” expressly provided that it was governed by the laws of England and that the parties to the agreement, the Claimant and the First Respondent, submitted to the exclusive jurisdiction of the English courts. …”
[51]It has to be observed, however, that even in the form ET3 itself at paragraph 7 the following was stated on behalf of the Respondents:
“7. The Claimant was employed by the Second Respondent pursuant to the appointment letter dated 26 July 2011, his employment commencing on 9 September 2011 and the terms of his employment being additionally set out in the following documents: 7.1. An undated document titled “Rotational Worker Contract”, it is understood that this is the document which the Claimant refers to as the “employment contract” …”
[52]In my judgment, when paragraph 9 is read fairly and in context it is clear that the reference to the “First Respondent” was simply a typographical error. In any event, it cannot contradict what the contractual documents in this case themselves provide on their true construction. As I have already indicated, in my judgment it is clear that even the RWC is clearly an agreement between the Claimant and the Second Respondent. That was defined as being “the ‘Company’”. As I have already indicated, references to “Group Company” do not alter that fundamental feature of the contractual relationship.[53]Furthermore, in my judgment, clause 2.4 of the RWC does not have the legal effect contended for by the Claimant. That does not convert the First Respondent or any company other than ESS into the employer under that agreement. It, again, must be read fairly, as a whole and in context. It contains a perfectly unsurprising provision relating to whether the Claimant could in substance work for others while he was employed by ESS. For entirely understandable business reasons, the protection that the employer wished to have would extend not only to the company itself but also other group companies. That is all that clause 2.4 is about.[54]I return to the Judgment of the Employment Tribunal on this issue at paragraphs 79 to 81 and the criticisms that are made about that reasoning in the grounds of appeal in support of the cross-appeal on behalf of the Claimant. As I have already mentioned, the Employment Judge directed himself, correctly, that the relevant principle is to be found in the decision of the Court of Appeal in James . The principal Judgment was given by Mummery LJ. As the Court of Appeal made clear in that case, the principles that govern this area of the law are not unique to employment law but are the usual common law principles as to the implication of contracts. In particular, the test of necessity is clearly set out, for example, at paragraph 49 of the Judgment by Mummery LJ. At paragraphs 79 and 80 of his Judgment the Employment Judge applied that direction of law to himself to the facts of the case before him. He concluded that there was no necessity to imply a contract between the Claimant and the First Respondent:
“80. … since the work [the Claimant] carried out for the first respondent is adequately explained by the contractual arrangements he had with ESS. …”
[55]It is clear on any view that in that part of his Judgment the Employment Judge was rejecting the contention made on behalf of the Claimant that he had an implied contract of employment with the First Respondent. In my judgment, that conclusion was reasonably open to the Employment Judge on the material before him. He correctly directed himself as to the relevant legal principle and proceeded to apply that principle to the facts as he found them to be. I conclude, therefore, that this criticism of the Employment Judge’s Judgment does not raise any point of law. It simply seeks to question a finding of fact by him.[56]True it is that when it comes to the next argument advanced on behalf of the Claimant, the Employment Judge on one reading of paragraph 80 did not expressly deal with the argument based on section 230(3) before turning to the extended definition at paragraph 81, when he expressly considered the extended definition in section 43K. However, again, in my judgment, that would not be a proper reading of the Judgment when read fairly and as a whole. As I have already emphasised, in the middle of paragraph 80 the Employment Judge said that there was no necessity “to imply a contract between them”. In that passage the Employment Judge was not restricting himself to the concept of a contract of employment. He expressly said that there was no necessity to imply any contract. For the purposes of the definition of “worker” in section 230(3)(b) there still has to be a contract, whether express or implied. In the Employment Judge’s view, there was no such contract in this case. Accordingly, I have come to the conclusion that the Employment Judge was also entitled to reject the contention made on behalf of the Claimant that he was a “worker” within the meaning of section 230(3)(b) of the 1996 Act . Again, in my judgment, this issue raises no point of law; it simply seeks to question a conclusion of fact. In my judgment, the Employment Judge was entitled reasonably to come to the conclusion that he did having correctly directed himself on the law.[57]That then leaves the further alternative argument on behalf of the Claimant relating to the extended meaning of “worker” given by section 43K. That is the issue that the Employment Judge dealt with in terms at paragraph 81 of his Judgment. In my judgment, he was perfectly entitled to come to the conclusion that he did. This was not a case concerning the sort of situation that section 43K is about. It would not be unusual in employment circles for someone to paraphrase what that provision is about, saying that it concerns agency workers. Of fundamental importance, in my judgment, is that the Employment Judge correctly analysed what the contents of section 43K(1)(a) are and then applied them to the facts of this case in a way that he was reasonably entitled to do on the evidence before him.[58]It was submitted by the Claimant at the hearing before me that the Employment Judge was wrong to focus on the point in time when the Claimant was first recruited. He submits that the correct focus should have been on the point in time when he was back in the UK for the last 200 days or so of his employment and in particular the time of his dismissal. He submits that the Employment Judge misunderstood what his case was. He submits that what was being submitted was that the end user was the First Respondent and that the Claimant had been supplied by the Second Respondent. He submits that there was a misdirection in paragraph 81, where the Employment Judge appeared to understand that the argument was that the end user was the Second Respondent and that it was being suggested that he had been supplied by the First Respondent. In my judgment, there was no such error of law. These were essentially matters of fact for the Employment Tribunal to determine having correctly directed itself as to the relevant law. The fact is that, as the Employment Tribunal found as a fact, in those last 200 days or so the Claimant was doing no work while he was in the UK; he was on gardening leave, as he was required to be by the Second Respondent, who was, as the Employment Tribunal found, his employer. He was not doing work for the First Respondent, for the simple reason that he was not doing work at all in the UK. Therefore, the Employment Judge was entitled to reach the conclusion that he did at paragraph 81.[59]Finally, I should deal with an argument, which was made by the Claimant at the hearing before me. He submitted that a purposive interpretation should be given to the meaning of “worker” in particular because this is a very important context of public interest disclosures; colloquially known as “whistleblowing”. Even with all of that being accepted, for the sake of argument, it does not, in my judgment, lead to any other conclusion. The submissions made on behalf of the Second Respondent in this regard derive some support from the recent decision of this Appeal Tribunal in Smania v Standard Chartered Bank [2015] ICR 436 , in particular at paragraph 44 in the Judgment of Langstaff P. Although not dealing with precisely the same issue as the one before me now, the principle that Langstaff P there expressed, in my judgment, is also applicable here. He said:
“44. The statute was drafted such that the essential right in a case of dismissal is that in section 94 [of the 1996 Act]. Supreme Court and House of Lords authority is to the effect that whether the Act extends extraterritorially to a claim based on the right not to be unfairly dismissed the test is that of a sufficiently close connection with the United Kingdom and United Kingdom employment law. I see no reason to think that the provision by section 103A that it is automatically unfair for dismissal to be on the grounds that an employee has made a protected disclosure should have the effect that this particular species of unfair dismissal should be treated any differently from those other species that fall within the genus of unfair dismissal.”
[60]For the reasons that I have given, the cross-appeal must be dismissed. The Appeal by the Second Respondent[61]There are seven grounds advanced in support of the Second Respondent’s appeal against the decision that the Employment Tribunal has jurisdiction to consider the claim against it. I will, however, take them in a slightly different order from the order in which they are set out both in writing and were advanced at the hearing before me. This is because I hope that they can be addressed in a more convenient and logical order as follows.[62]The first ground is that the Employment Tribunal made findings of fact for which there was no evidence or which were wrong on the agreed evidence. In particular, criticism is made of the passages that I have already cited, for example from paragraph 44 of the Employment Tribunal’s Judgment, as to what was said to be there “the uncontested evidence of the claimant” as to various assurances that he was given at the time of signing ESS1. For this purpose the Employment Judge’s Notes of Evidence have been placed before this Appeal Tribunal. In fact, as it has turned out, it is common ground before me that Ms Shulakova did not present the Claimant with ESS1 and did not give the Claimant the advice that was suggested by the Employment Tribunal. As I have already noted, Ms Shulakova gave evidence at the hearing before the Employment Tribunal; however, no such suggestion was put to her.[63]In this regard Mr Oudkerk QC rightly submits that if what was being submitted was that there was a sham contract deliberately entered into by the parties in order to avoid the requirements of Kazakhstan law both as to a visa and as to the need for a contract of this type to be governed by Kazakh law then that allegation should have been specifically pleaded and distinctly proved (see, for example, Three Rivers District Council v Governor and Company of the Bank of England [2003] 2 AC 1 at paragraph 184 (Lord Millett)). In fact, no such suggestion was being made, which reinforces the fundamental submission made by Mr Oudkerk QC before me that inevitably therefore it must follow that the Employment Tribunal fell into error in this regard. The Claimant submits before me that although he accepts that Ms Shulakova did not say any of the things attributed to her by the Employment Tribunal, they were nevertheless said by another person. He submits that it does not matter therefore that the Employment Tribunal may have fallen into error in this regard. I do not accept that submission. I accept the Second Respondent’s fundamental submission that there has undoubtedly been an error in the approach taken by the Employment Tribunal in this regard.[64]The second ground of appeal is that the Tribunal misdirected itself in what is said to be the central passage of its reasoning, at paragraphs 82 to 90 of the Judgment. In that part of his Judgment the Employment Judge, as I have already mentioned, decided that the true intentions of the parties were to be found in the RWC, which in his view accurately reflected the offer letter. Since that contained a jurisdiction clause that made the law of the contract English law and subjected the parties to the jurisdiction of the English courts, he regarded that as being significant. In that context, as I have already mentioned, he was prepared to put to one side the terms of the various other agreements to which I have referred, for example ESS1, even though the RWC itself said that in the event of any conflict ESS1 was to prevail. He regarded that, as I have mentioned, at paragraph 86 of his Judgment as simply being part of what he described as “the contractual disguise”.[65]In my judgment, this submission by Mr Oudkerk QC is also well-founded. The interpretation of contracts is a matter of law. In my judgment, the Employment Tribunal did indeed fall into error and fundamentally misconstrued the agreements before it. The agreements could be, and should have been, read together as a whole and in a harmonious way. Insofar as there was any conflict between them, for example as to the applicable law and the jurisdiction clauses, it was clear when the documents were read fairly and as a whole that it was Kazakh law and Kazakh jurisdiction that applied as per ESS1 and the related agreements. There was no basis, in my judgment, on which the Employment Tribunal could have found as it did that there was a “disguise” or that the agreements had the meaning that it attributed to them. I have already mentioned in the course of this Judgment various express provisions that do not have the effect that the Employment Judge concluded they did have. I will not repeat those points here. Suffice it to say that the appeal must succeed, in my judgment, on ground 2 also.[66]I will turn next to ground 4. It is submitted by Mr Oudkerk QC that the Tribunal erred by directing itself that the issue of equality of bargaining power meant in effect that an otherwise lawful contract under Kazakhstan law should be construed as an unlawful contract under Kazakhstan law and used to found jurisdiction in a British Employment Tribunal claim. As I have mentioned, at paragraph 82 of his Judgment the Employment Judge was of the view that the present case was comparable to Autoclenz and therefore the issue of unequal bargaining power did arise. I regard that, again, as a fundamental error of approach by the Employment Tribunal. In my judgment, this case has no relevant analogy to the stark facts of Autoclenz , which concerned extremely vulnerable workers who were working as car valeters and were paid below the National Minimum Wage. This Claimant was a highly paid professional person. He was employed for the role of Finance Director for a large operation in Kazakhstan. The Employment Tribunal had the opportunity to consider the Claimant’s evidence. It would no doubt have concluded that he is a highly intelligent and articulate man. In any event, I also accept Mr Oudkerk QC’s further submission that there is no basis on the authority of Autoclenz for the proposition that an Employment Tribunal should infer that the true contract is in fact one that would be unlawful under the relevant law. As I have already said, the relevant law was in fact that of Kazakhstan. Accordingly, ground 4 also succeeds.[67]I turn next to ground 6. Mr Oudkerk QC submits that the Tribunal decision in relation to the contracts is internally inconsistent. In particular, he submits that the Employment Judge fell into error at paragraphs 83 and 85 of his Judgment, to which I have already referred. Mr Oudkerk QC submits that in fact the offer letter of 26 July 2011 made no mention of what was to be the governing law and jurisdiction of the contract. It made it clear, as I have already said in quoting from it, that it was subject to an appropriate work permit and visa in Kazakhstan. I accept Mr Oudkerk QC’s submission that the RWC cannot be regarded as a more faithful transposition of the terms of the offer letter. As I have already said, all of the agreements in this case can be and need to be read together as a whole and in a harmonious way.[68]I also accept, as I have indicated in the course of outlining the factual background, that it was wrong of the Employment Judge to say, as he did at paragraph 83, that the issue of the conversion of the salary only appeared in the RWC. It also appeared, as I have mentioned, at clause 4(a) of ESS1. Finally, Mr Oudkerk QC submits in this context, and I again accept, that in any event ESS1 made clear that it superseded any pre-contractual statements such as the purported statement now relied upon by the Claimant. True it is, as the Claimant has emphasised before me, that the relevant provision, which I have quoted, referred to “this Agreement and our letter offering employment”, superseding earlier statements. Nevertheless, that does not detract from Mr Oudkerk QC’s fundamental submission, which I accept: there was no contradiction with the offer letter. Insofar as there was any contradiction with statements alleged to have been made, they were superseded, as ESS1 made clear. Accordingly, this ground also succeeds.[69]I turn now, although admittedly out of order, because it appears to me logically to fall at this stage of the argument, to the Second Respondent’s ground 3. Mr Oudkerk QC submits that the Claimant was asserting that he had made what in fact was an illegal contract under the law of Kazakhstan and that if the Tribunal was correct to find he did make such an illegal contract it should have declined jurisdiction simply on that basis. He reminds me that it is a well established principle of English law that where a contract is tainted with illegality an employee will lose the protection of statute. The courts will have no truck with someone who seeks to assert an illegal contract (see the decision of this Appeal Tribunal in Tomlinson v Dick Evans U Drive Ltd [1978] IRLR 77 in the Judgment of Bristow J). That reflects, of course, a more general principle of our law that is not confined to the employment context. Furthermore, Mr Oudkerk QC reminds me that this case not only concerns an illegal contract, if that is what it was, but it also concerns extraterritoriality. He submits that what the Employment Tribunal has done in this case is tantamount to exercising “an exorbitant jurisdiction” that would be contrary to the comity of nations. He relies on well known principle and the views of the learned editors of Dicey, Morris and Collins’ The Conflict of Laws: 15 th Edition at paragraph 32-191.[70]I accept those submissions on behalf of the Second Respondent. In my judgment, the correct position is, for the reason I have already set out, that the Employment Tribunal simply misunderstood the contractual arrangements in this case on their true construction. The point about illegality does not in fact arise. However, I do accept Mr Oudkerk QC’s alternative submission that if the true position had been, as the Employment Tribunal thought it to be, that was tantamount to assuming jurisdiction to enforce illegal arrangements and would be contrary to the comity of nations, and for that reason ground 3 also succeeds insofar as it is necessary for it to do so.[71]I turn to the Second Respondent’s ground 5. Mr Oudkerk QC submits in essence two distinct points. First, he makes a specific criticism that the Employment Tribunal was wrong in law when it held at paragraph 92 of its Judgment that the “decisive” factor was what happened towards the end of the Claimant’s employment with ESS when he was in the UK for some 200 days. Secondly, Mr Oudkerk QC advances a much broader attack on the conclusion of the Employment Tribunal. He submits that when regard is had to well known authority in this area of law, which was in fact cited by the Employment Judge himself, there was only one conclusion that was reasonably open to the Employment Tribunal on the evidence before it. I will deal with each of those distinct aspects of ground 5 in turn.[72]As I have mentioned, a large number of authorities were before the Employment Tribunal, and an even larger number of authorities have been cited before me. They include decisions of the House of Lords and Supreme Court. In particular, reliance has been placed by each party upon the decision of the House of Lords in Lawson v Serco [2006] ICR 250 ; Ravat ; Powell v OMV Exploration & Production Ltd [2014] IRLR 80 ; and Olsen v Gearbulk Services Ltd [2015] IRLR 818 . I have found to be of particular assistance the recent decision of Langstaff P in Powell , not least because in that Judgment this Appeal Tribunal was able to summarise some of the earlier authorities. At paragraph 47 Langstaff P said that the test is one of sufficiently strong connection; in other words, a sufficiently strong connection with Great Britain. Citing an earlier decision of the House of Lords, he continued that the connection has to be sufficiently strong to enable it to be said that Parliament would have regarded it as appropriate for the Tribunal to deal with the claim. At paragraph 51 Langstaff P said that the starting point that must not be forgotten in applying the sufficiently strong connection test is that the statute will have no application to work outside the UK:
“51. … Parliament would not have intended that unless there were a sufficiently strong connection. ‘Sufficiently’ has to be understood as sufficient to displace that which would otherwise be the position.”
[73]At paragraph 56 of his Judgment Langstaff P emphasised that, in that case, the employer was not a British company. Although he accepted that that factor is not conclusive, he described it as being nonetheless “highly material”. I note that upon the facts of the present case this also concerns an employer, the Second Respondent, which was not a British company.[74]Finally in the citation from Powell I observe that at paragraph 57 Langstaff P said that in that case the Judge would have been bound to take account of the fact that the parties had agreed that English/British employment law would not apply to the contract and that they and agreed that the courts of the UK would have no jurisdiction. Langstaff P said that, “Those are relevant considerations”.[75]I therefore accept the first aspect of Mr Oudkerk QC’s submission under ground 5. In my judgment, all of the relevant circumstances had to be properly analysed and weighed up by the Employment Tribunal when addressing the question of whether there was a sufficient connection with Great Britain for this claim properly to fall within the jurisdiction of the Employment Tribunal here. It was wrong as a matter of law, in my judgment, for the Employment Tribunal to take the view, as it did at paragraph 97, that a decisive factor in weighing up the matter was the asserted links that the Claimant had with the UK. In fact, as the Employment Judge himself had already found, at the relevant time the Claimant was not doing any work at all. There are a great many other factors, in my judgment, that had to be considered and properly weighed in an exercise that requires weighing up all the relevant considerations. I note in that regard that the Employment Judge was of the view that the present case was very similar to the facts of Ravat . I accept Mr Oudkerk QC’s criticism of that aspect of the Employment Tribunal’s Judgment. It was not in at least one critical respect, because this was not a British company. In that regard it was more akin to the facts of Powell . As I have already mentioned, Langstaff P regarded that factor as being “highly material”, although not in itself conclusive.[76]That, in my judgment, is the key to the second and broader aspect of Mr Oudkerk QC’s submission under ground 5. What Mr Oudkerk QC submits - and he does not shrink from doing so - is that in effect there was only one conclusion that was reasonably open to the Employment Tribunal on the facts before it in particular if one left out of account the facts that were found wrongly and that were tainted by the errors of law that I have already accepted were made. Mr Oudkerk QC submits that if an Employment Tribunal correctly directed itself then there was only one conclusion of fact that was reasonably open to it. I am not persuaded by that broader argument advanced on behalf of the Second Respondent. As I have already said, in my judgment the relevant principles set out in the numerous authorities to which reference has been made and that were summarised most helpfully, in my view, in the Powell case, as I have said. That approach requires all the relevant considerations to be weighed up in arriving at a conclusion that, Mr Oudkerk QC accepts, is one of fact and not one of law.[77]For his part, the Claimant has submitted before me that any error of approach that the Employment Tribunal fell into does not matter. Furthermore, he submits that the focus of the Employment Tribunal on the authorities properly had to be on the point in time when he was dismissed. The Claimant reminds me that at that time he was undoubtedly in the UK and had been for a period of some 200 days leading up to that dismissal. He also reminds me that during that latter period he was going through the grievance procedure, which he was required to do, at the behest of the Second Respondent, in the UK. He submits that the correct point in time for dismissal is made clear in the decision of the House of Lords in Lawson , in particular at paragraph 27 in the speech by Lord Hoffmann. On the other side, Mr Oudkerk QC reminds me that that passage appears in a section beginning at paragraph 25, where Lord Hoffmann was discussing “the standard case: working in Great Britain”.[78]In my judgment, both sides are for present purposes at this stage of the case seeking to prove too much. In my judgment, as I have already said, there were a number of errors of law made by the Employment Tribunal in the approach taken. However, the ultimate question is one of fact, which, in my judgment, still has to be determined by the Employment Tribunal properly and in accordance with a correct understanding of the law. That it has not to date been done. I will come back to the consequences of that later in this Judgment.[79]Before I do so, I must address the seventh and final ground of appeal on behalf of the Second Respondent. Mr Oudkerk QC submits that the Employment Tribunal erred in determining that the Claimant had “regular and substantial” links with the UK. I accept that submission. It is plain, in my judgment, on the findings of fact that the Employment Tribunal itself admits that the issue was at best broadly neutral (see paragraph 95). As I have already said in the context of ground 5, this point should certainly not have been regarded as being decisive, as it appears to have been at paragraph 97 of the Employment Tribunal’s Judgment. Accordingly, ground 7 also succeeds. Should the Case Be Remitted?[80]Mr Oudkerk QC accepts that in accordance with normal practice and principle once this Appeal Tribunal has decided that there were errors of law in the approach that the Employment Tribunal took, the case would be remitted to the Employment Tribunal for reconsideration in accordance with law. He reminds me in that context of the recent decision of the Court of Appeal in Jafri v Lincoln College [2014] EWCA Civ 449 . However, Mr Oudkerk QC submits that on the facts of the present case I should not remit the matter to the Employment Tribunal. He submits that I should decide the case for myself because, as I have indicated, in law he submits there would only be one answer that would reasonably be available to the Employment Tribunal on the findings of fact made if the Employment Tribunal properly directed itself.[81]There are two related difficulties with that approach in my judgment. First, as I have already said, the question ultimately is one of fact not law. Secondly, and related to that, the findings of fact in the present case are fundamentally flawed for the very reasons that the Second Respondent has persuaded me of in relation to most of its grounds of appeal. The question then, in my judgment, is whether the case should be remitted to the same or a different Employment Judge. Again, I have received valuable assistance from Mr Oudkerk QC in that regard. He has reminded me of the decision of this Appeal Tribunal in Sinclair Roche & Temperley v Heard [2004] IRLR 763 . In particular, he reminds me of the well known passage at paragraph 46, where a number of relevant factors to be considered by this Appeal Tribunal were set out.[82]I have had regard of course to all of those and the submissions that have been made by the parties before me. Mr Oudkerk QC has placed particular emphasis on the factor at paragraph 46.4, which is headed “Totally flawed decision” and where it was said:
“46.4. It would not ordinarily be appropriate to send the matter back to a tribunal where, in the conclusion of the appellate tribunal, the first hearing was wholly flawed or there has been a complete mishandling of it. This of course may come about without any personal blame on the part of the tribunal. There could be complexities which have not been appreciated, authorities which had been overlooked or the adoption erroneously of an incorrect approach. The appellate tribunal must have confidence that, with guidance, the tribunal can get it right second time.”
[83]I would respectfully endorse that approach. It is not any personal criticism of the Employment Judge to say that in my judgment that approach is apposite in the present case. There were, as leading counsel has explained to me in this appeal, a number of complexities in this case, including issues of law and fact. Nevertheless, the reality is that, for the reasons I have already given, the Employment Tribunal did fall into error in the manner set out in paragraph 46.4 of Heard . Very fairly and in the spirit with which he has made his submissions before me, the Claimant accepted that that might be the proper course in the circumstances of this case if I should reach this point in my reasoning. In any event, I have come to the conclusion, exercising my own judgment, that that is the right course, and the case will be remitted to a different Employment Judge.[84]Although it is not a matter for me, I would ask that consideration be given by the Regional Employment Judge to whether the case should be listed before an experienced, salaried Judge rather than a fee-paid Judge in view of its complexity and its procedural history. Conclusion[85]For the reasons I have given, this appeal by the Second Respondent is allowed. The Claimant’s cross-appeal is dismissed. The case will be remitted to a different Employment Judge.