Lord Advocate v Babcock & Wilcox (Operations) Ltd [1972] UKHL 8

House of Lords
Between
Lord AdvocateAppellantBabcock & Wilcox (Operations) LtdRespondent
Before
Lord ReidLord Morris of Borthy-GestLord DiplockLord Simon of GlaisdaleLord Kilbrandon
[1]I have had the advantage of reading the speech of my noble and learned friend, Lord Kilbrandon. I entirely agree with regard to the Didcot establishment but I have more difficulty with regard to the three smaller sites. I do not think that it can have been intended that large numbers of small sites should be treated as separate establishments, nor do I think that it would be in anyone's interest to do this. But as the facts with regard to those three small sites are not given very fully I am prepared to treat them as borderline cases and to agree that they can be regarded as establishments. I would therefore allow this appeal. Lord Morris of Borth-y-Gest : My Lords, I have had the advantage of reading in advance the speech prepared by my noble and learned friend, Lord Kilbrandon, and I am in agreement with it. As we are differing from the Court of Session and as our decision is of general application I will briefly express my view. After the introduction of selective employment tax (see s.44 of the Finance Act, 1966), there were some provisions for a refund of it to the employer who had paid it. In certain cases (see s.l of the Selective Employment Payments Act, 1966), there could be a refund with a premium. In certain cases (see s.2 of that Act) there could be a refund but without a premium In certain cases there was no refund at all Then by s.26 (1) of the Finance Act, 1967, there could in certain cases be an increased premium where there was a refund : that was known as a regional employment premium : that could become payable if the "establishment" (a term to which I must more fully refer) was within a development area. Later (see s.l of the Revenue Act, 1968), it was provided that no addition to the refund of tax should be added to a payment under s.l of the 1966 Act unless the relevant "establishment" was situated wholly within a development area. The word "establishment" is found in the 1966 Act. The conditions for a refund with a premium are to be found in s.l. Under that section the refund (with premium) is made by the Minister of Labour to an employer (a) who has paid selective employment tax (b) for any contribution week (c) in respect of a person in an employment to which the section applies. Subject to an exception not now material the section applies" to any employment in or carried out from an establishment" satisfying certain conditions. The respondent company has a number of divisions including a manufacturing division and a construction division. The construction division is chiefly concerned with the installation and erection of steam raising plant, often of a very large size manufactured by the respondent company. The construction division is also concerned (though to a lesser degree) with repairs to such plant. Both the manufacturing and construction divisions are based at Porterfield Road, Renfrew, where they occupy very large engineering premises. The work of installing and erecting plant must naturally be carried out at the place where it is desired to have the plant. The work of repairing plant must naturally be carried out wherever the plant is. So it followed that the respondent company had many men working on sites in many different places. Many of these places were not within development areas. But Renfrew is When the legislation to which I have referred resulted in differences concerning payments to certain employers according as to whether an "establishment" was or was not within a development area the respondent company wanted to know how they stood. So under s.7 (5) of the 1966 Act they submitted a question to the appropriate tribunal. It is important to see how the question was framed. It was as follows:
"Whether the employees (of the respondents) employed on sites out. with development areas during the period from 6th January to 6th July, 1969, were employed from (the respondents') establishment at Renfrew and whether (the respondents) are entitled to be paid regional payments in respect of these employees for the said period."
It is to be noted that one part of the question was expressed as being whether those employed on sites were "employed from" the respondents' establishment at Renfrew. This is not the language of s 1 and it is to the language of s.l of the 1966 Act that attention must be paid. For the purposes of the hearing before the tribunal four sites were taken as example sites. They were sites at Didcot, Carrington, Fulham and Barking. Those sites are not within development areas. At Didcot the respondents were engaged in constructing a power station : at Carrington in installing a steam raising boiler : at Fulham and Barking in renewing and repairing steam raising plant. At Didcot the work was to last nearly four years. Over 500 people were to be concerned. At Fulham (to take the site where as between the four sites the operations were on the smallest scale) the work was to last about one and a half years and initially there were 38 people concerned The facts concerning the four sites are fully set out in the decision of the tribunal and I need not summarise them, but it is helpful to have in mind the nature of the labour forces at the sites. Some were "travelling men". They were employees of the respondents who had undertaken to work at any site within the United Kingdom. Some were chosen by the labour officer (who is stationed at Renfrew) from persons who had applied to the respondents for work. Some came as the result of requests to the Department of Employment and Productivity who recruited on a nation-wide basis. Some were locally recruited from men who called at a site asking for work. Generally speaking, the work at the sites was planned and directed from Renfrew. The refund (with a premium) under s.l of the 1966 Act will be made where the tax (for any contribution week) has been paid by an employer in respect of a person "in an employment" to which the section applies and (for present purposes) the section applies to any employment in, or carried out from, an establishment that satisfies certain conditions as set out in s.l (2). One of these is that the "establishment is engaged by way of business" in certain activities. If there was an "establishment" at Renfrew it is common ground that it satisfied the statutory conditions. If there was an "establishment" at each of the four sites it is also common ground that each one satisfied the statutory conditions. What, then, is an "establishment"? Section 10 (2) of the 1966 Act refers to the site of an establishment : s 7 (1) deals with registers of establishments : s 7 (2) provides that no business or part of a business is to be registered except on the application of the employer. Section 1 (2) refers to an establishment being "engaged by way of business" : it also refers to "employed persons employed in any employment in, or carried out from," an establishment. It would seem clear that where operations of any magnitude are to take place on a site (such as a place where a power station or a steam raising boiler is to be built or where plant is to be repaired) there would be need to have some premises (probably temporary buildings or sheds or huts) on the site. It would be necessary to have places where men could report, places where they could resort, places where they were paid, places where records were kept, places where tools were kept or where stores or equipment were kept. Some tests or indications as to what may constitute an establishment were set out by Lord Parker, C.J. in a case Secretary of State for Employment and Productivity vs. Vic Hallam Ltd. [1] He mentioned "exclusive occupation of premises":
"some degree of permanence": "some organisation on the premises, an organisation of the men who are working there"
. So he said that one of the matters to be considered was whether it could properly be said that men are working in or from such premises. The tribunal were assisted by those tests or indications which Lord Parker formulated and stated that it was not in dispute that there was an establishment at the Renfrew works. As regards the four sites the tribunal held as follows:
"On each of the four sites described in evidence there was sufficient in the way of premises within the exclusive occupation of the applicants, of permanence and of organisation of activities of the men working on the site to constitute an establishment at each site. Moreover for all men working on the site the site establishment is one from which in some sense they are employed. It is the one to which they report each day : at which they receive their orders and from which they go to the constructional sites to carry out their work. It is the one from which they collect their wages and to which they make complaints and address enquiries."
The conclusion which the tribunal reached that at each one of the four sites there was an "establishment" was in my view correct : it was a conclusion amply warranted from the facts as found. As to the Renfrew works, where there was an "establishment" the tribunal posed the question whether it was the establishment "from which the employment of men on sites outwith development areas is carried out". The tribunal said:
"The Renfrew works have a good claim to be so regarded. These works are the establishment to which each employee applies for employment; from which he is paid and dismissed; where all his labour records are kept; where most of the planning is done: and from which supervision and instruction proceed. In the case of those employees of the applicants who are travelling men, sites may come and sites may go but Renfrew remains as the centre from which they are employed and by which they are transferred from one site to another. For men locally employed, the picture is rather different. No doubt they are engaged, paid and dismissed by the labour officer at Renfrew but their local site is the only establishment of the applicants with which they have any connection "
The tribunal proceeded to say that they would be prepared to hold that there were two establishments "from" each of which, in some sense, employees working at sites "were employed" They considered that they had to make a choice because the relevant statutory provisions envisaged that for each person there is only one establishment "in or from which his employment is carried out". They chose Renfrew because, taking the "travelling men", Renfrew "was the place from which travelling men transferred from other sites should be considered as having been employed": and that no distinction should be made in the case of travelling men working at sites at which they had commenced employment with the applicants. Though the tribunal considered that a better case could be made for treating "local men" as employed at and from the sites where they worked they decided on balance that they should be treated as being "employed from Renfrew". That was because all important matters relating to their employment were handled at Renfrew and because their employment was controlled from there. No distinction could be drawn between the four sites The several references made by the tribunal to the conception of men being employed "from" Renfrew were in line with the decision which was arrived at. It was in the following terms:
"that the employees of the applicants employed on sites at Didcot, Carrington, Fulham and Barking during the period from 6th January, 1969 to 6th July, 1969, were employed from the applicants' establishment at Renfrew and the applicants are entitled to be paid regional payments in respect of these employees for the said period."
With every respect, it seems to me that the tribunal's approach and finding involved a departure from the language of the statute. For an employer to be entitled under s.l of the 1966 Act he must have paid selective employment tax (for a contribution week) in respect of a person "in an employment" to which that section applies : and the statutory provision is that the section applies "to any employment in, or carried out from an establishment" satisfying certain conditions. It being found and accepted that there is an establishment (satisfying the conditions) at each one of the four sites, the question in reference to a person employed at one of the sites was not whether it could be said that he was in one sense employed "from" Renfrew, but whether he was in employment in or carried out from the establishment at the site. If someone was engaged in clerical work that involved his working indoors in one of the temporary huts or buildings erected on a site it could not rationally be said that he was working in the Renfrew establishment. If someone was engaged in out-door work such as that of constructing a power station at a site it seems to me that he would be in employment carried out from the establishment at the site. It would not be a normal use of language to say that he was in employment carried out from the establishment at Renfrew. In the context of s.l of the 1966 Act I think that the notion of an employment being "carried out" denotes a carrying out by the person who is employed : he will carry out his employment at the place where he works. The word "employment" involves that there is someone who employs because he wants some work to be done and that there is someone who is employed and who agrees to do the work. In s.l of the 1966 Act I think that the primary reference which is made by the words "employment . . . carried out" is a reference to the person employed He is the person who is "in an employment". He carries out that employment and he carries it out from some base or establishment. Those on the sites were carrying out their employment from those sites. The work they were doing was directed from Renfrew and because of the internal arrangements of the respondents it could be said that in one sense they were employd "from" Renfrew. The conception of being employed "from" a place is a difficult one, but whether it is or is not it is not one that is expressed in or that is inherent in the language of the statute. The statute enjoins the enquiry whether persons work in a qualifying establishment or whether they carry out their work from such an establishment. On the facts as found by the tribunal their decision should have been that the employees employed at the four sites during the period referred to were in employment in or carried out from the respective establishments at the sites and that the respondents were not entitled to be paid regional payments in respect of those employees for the period referred to We were referred to the decision of the Divisional Court in Secretary of State for Employment and Productivity vs. Clarke Chapman & Co. Ltd. [2] The facts in that case were closely parallel to the facts in this case. In line with practice in revenue and taxation matters the Divisional Court followed the decision of the Court of Session in the present case while indicating, for the reasons given by Widgery, L.J., that their own view would have led them to an opposite decision. I find myself in agreement with the reasons expressed by Widgery, L.J. I would allow the appeal. (1971) 6 I.T R. 128, (1971) 1 W.L.R. 1094 Lord Diplock : My Lords, I agree with the speech of my noble and learned friend, Lord Kilbrandon, and for the reasons which he gives would allow this appeal. Lord Simon of Glaisdale : My Lords, I have had the advantage of reading in advance the speeches prepared by my noble and learned friends, Lord Morris of Borth-y-Gest and Lord Kilbrandon, with which I agree. As its name implies, the selective employment tax was imposed with a view to fiscal discrimination between different sorts of employment - even though the original taxing provision, s.44 of the Finance Act, 1966, on which all subsequent provisions depend, itself provided no element of discrimination. A significant feature of the tax - as indeed also of concomitant statutory provisions which did provide the discrimination - is that it was weekly in temporal scope. The first of these concomitant statutory provisions was the Selective Employment Payments Act, 1966. When taken together with s.44 of the Finance Act, 1966, it provided (to speak very broadly) for fiscal discrimination in favour of employment in productive industry and against employment in service industry. The second concomitant statutory provision, contained in s.26(l) of the Finance Act, 1967, when taken together with the provisions of the previous Acts to which I have referred to, provided for fiscal discrimination in favour of employment in development areas (i.e., areas of higher incidence of unemployment) and thus against employment in other areas (i.e., areas of higher incidence of employment). It will be immediately apparent that the decision appealed from involves a result which must be directly contrary to what Parliament intended in 1967. It involves that employers and employees in areas of high or higher incidence of unemployment are taxed to subsidise the employment of people, including those recruited locally, in areas of high or higher incidence of employment (e.g. south-east England). Normally such a conclusion would be the end of the case : a decision directly contrary to what Parliament so plainly intended must be wrong. In the instant situation, however, the matter cannot be disposed of thus summarily. The 1967 Act can only operate within the framework of the 1966 Acts; and, as I have pointed out, the discriminatory purpose of the Selective Employment Payments Act, 1966, is not the same as that of s 26 of the Finance Act, 1967. Nevertheless, although even the manifest intention of a later Act can rarely control the construction of an earlier Act, it is legitimate, in my view, if there is any dubiety as to the construction of the earlier Act, to resolve this in favour of giving effect to the manifest intention of the later Act. This is particularly so when the earliest provision of all merely lays a general foundation (here, for discrimination between employments - potentially on widely different grounds) and where the ensuing particular provisions operate in perfect harmony. In any case, even looking no further than the Selective Employment Pay-ments Act, 1966, the appellant is, in my judgment, entitled to succeed. There are three crucial terms or phrases which fall for interpretation in their instant context: - "establishment", "employment" and "carried out from". "Establishment" is a word of wide meaning. Among other, different, senses, it can signify, on the one hand, a body of persons (generally an organised body) or, on the other hand, premises - with a number of senses intermediate between these two. I think that any attempt at exhaustive judicial definition would be inappropriate where the draftsman himself has not attempted to define; but what this word conveys to me in its instant context is a body of persons carrying on activities by way of business (see Selective Employment Payments Act, 1966, s.l (2)(a)) associated with a locality. I think that the criteria suggested by Lord Parker, C.J. in Secretary of State for Employment and Productivity vs. Vic Hallam Ltd. [3] are relevant and likely to be helpful in deciding in particular cases whether what is in question amounts to an "establishment". A further criterion that might be useful in some cases (though possibly inherent in Lord Parker's third and fourth criteria) would be to ascertain where lies the effective control of the activities of those whose "employment" (the term next for consideration) is in question - which in turn would involve consideration of how far and in what respects control is delegated. (In all four cases under instant consideration, control of employment was so delegated as to be effectively exercised at the local site and not at Renfrew.) I would not, for myself, add size as a further criterion - partly because of difficulty in drawing the differentiating line, but even more because a number of small units of employment could cumulatively be significant for the purposes of the relevant Act. The tribunal found that the respondents had "establishments" in all four localities in question. I would have found so myself on the available evidence : in any case, it is sufficient to say there was material which justified the finding of the tribunal. Then for "employment". In the context of these Acts, the word signifies to me work done under a contract of employment. I do not think it means the contract of employment itself, nor the contractual relationship simpliciter. I can see no reason for considering it from the point of view of the employer : on the contrary, if anything turns on the choice, I think it should be considered from the point of view of the employee, since it is his employment (i.e. work) which the Act contemplates as the subject-matter of discrimination. Thirdly, employment "carried out from" an establishment. I think that this means no more than that the employees whose employment is in question are, in popular language, "based on" a particular establishment. The employees whose employment is in question in the instant appeals were based on the establishments at the local sites. They were not based on Renfrew; so that their employment was not "carried out from" any establishment there. To hold that it was "carried out from" there was a misdirection. I desire to add only two further matters. First, I agree with the observations of Widgery, L.J. in Secretary of State for Employment and Productivity vs. Clarke Chapman & Co. Ltd. [4] , although not with the conclusion to which the court felt bound out of comity. Secondly, once there is an "establishment", it does not cease to be such merely because it is running down. In businesses like the respondents' the activities are bound to build up and run down. In this connection, the situation must, in view of the temporal incidence of tax, refund and premium, be considered from week to week. The provisions relating to registration of establishments contained in s. 7 of the Selective Employment Payments Act, 1966, are also important in considering problems of build-up and run-down - in particular, sub-section (1) (whereby the Minister is not required to make payment for any contribution week falling wholly or partly before the date of registration of the establishment) and sub-section (3) (whereby the Minister may, subject to reference to the tribunal, remove from the register any establishment which he is satisfied no longer qualifies to be included in it). I would allow the appeal. Lord Kilbrandon : My Lords, Before coming to the closer examination of the relevant statutory provisions which will be necessary for the disposal of this appeal, I propose to describe as briefly as possible the scheme of the selective employment tax (SET) and its associated benefits. The tax was imposed by s. 44 of the Finance Act, 1966, which provided that: - ". . . in respect of each contribution week beginning on or after 5th September, 1966, every employer shall be liable, in respect of each person in respect of whom the employer is liable to pay an employer's . . . contribution for that week to pay . . ." SET, the amount of the weekly payment being regulated by the age and sex of each employed person. The tax was to be collected together with the employer's weekly contributions in respect of his employees. In spite of the name of the tax, there is in the instituting statute no element of selection to be found. For that you must go to the Selective Employment Payments Act, 1966, which was passed more or less contemporaneously; I shall call it the 1966 Act, since it will not be necessary to refer to the Finance Act, 1966, again. Section 2 of the 1966 Act provides for "selective employment refund", namely, the repayment of the tax paid to an employer who has paid SET for any contribution week in respect of a person in an employment to which the section applies. Section 1 of the Act provides for "selective employment premium"; not only does the employer receive repayment of the SET he has paid in respect of a person in an employment to which that section applies, but also a premium calculated by reference to that person's age and sex. Section 3 of the 1966 Act provides for payment of selective employment refund and of selective employment premium to employers who may be classified as public undertakers, upon the same principle as those payments are to be made to employers in the private sector under s. 1 and 2. In both s. 1 and s. 2, the employment to which the sections apply is "employment in, or carried out from" establishments having certain characteristics. Putting the matter broadly, and using language which is not intended to compromise the questions which are in issue, the policy of Parliament appears to have been to confer repayment in respect of employment in some forms of industrial activity, to confer repayment plus a premium in respect of others, and for the rest to leave the SET paid to be retained by the Treasury. SET, with its associated refunds and premiums, has been made the vehicle of a second policy, namely, the conferring of benefit and encouragement on the development areas. These are areas in which there is a higher than average rate of unemployment, and a lower than average rate of industrial development. By s.26 (1) of the Finance Act, 1967, the selective employment premium payable under s.l of the 1966 Act is increased, in respect of development areas, by an amount called the "regional employment premium." A further discrimination in favour of development areas is effected by s 1 of the Revenue Act, 1968, whereby the premium payable, in addition to refund of tax, under s.l of the 1966 Act, is no longer to be payable except - again to use non-statutory language - in respect of development areas. These payments, namely, the refund of tax, the selective employment premium, and the regional employment premium have been compendiously and conveniently termed "the regional payment" by the industrial tribunal which dealt with the present case. The question before us is whether the respondent employers are entitled to regional payment in respect of the employment of certain of their employees who work in areas which are not development areas and whose situation I am about to describe. The respondents are a subsidiary of Babcock and Wilcox Ltd.; they have their registered office and their head office in London, where are stationed their planning and engineering staff, as also the main design drawing offices. They are organised in a number of divisions. The division with which we are concerned is the construction division, which is based at Renfrew, in a development area. That division is chiefly concerned with the installation and erection of steam-raising plant, manufactured by the respondents' manufacturing division, also situated at Renfrew, and to a lesser extent with repairs to such plant. The sites on which their operations are carried on are scattered over the United Kingdom. The allocation of functions as between the divisional headquarters at Renfrew and the personnel actually on the sites where the construction is proceeding has been carefully described in the tribunal's reasons for their decision, and I shall only summarise it here. Renfrew (as I shall describe the division's headquarters there) prepares what is called the "critical path network", which I take to mean a co-ordinated work programme. Each contract is under the charge of a sponsor engineer at Renfrew, and under the day-to-day charge of a resident engineer. The resident engineer, except for being in charge of a small cash float, has no financial authority. Nor can he alter the critical path network, though he can recommend alterations to the sponsor engineer. When it comes to labour, with which of course this appeal is primarily concerned, the position is that there are several classes of employee, some being "travelling men" who may move from site to site, and some being specially recruited at the Department of Employment and Productivity for a contract, or accepted for employment locally at the site. Neither party in this case distinguishes in any way, for present purposes, between the classes of labour; it is enough to say that all are hired through Renfrew, by whom they are individually taken on, and where their documents are kept. So also their employment is terminated by Renfrew, except for misconduct, when the resident engineer can dismiss. Gross weekly pay is calculated at the site, and the wages records go to Renfrew, where the net pay is calculated. Renfrew sends a cheque to cover the total sum of wages to the site, where the wage-packets are prepared and handed over to the employees When the question came to be raised between the Secretary of State for Employment and the respondents whether, in respect of the persons employed at the many sites where the respondents' contracts are being carried out, not being sites within development areas, the respondents are entitled to regional payment, it was agreed to test the matter by reference to four individual sites, namely, those at Didcot, Carrington, Fulham and Barking No distinction was sought to be made in principle among these sites by either party for the purposes of this appeal, although the sites differ greatly in size and character. I shall take first Didcot as exhibiting, in my opinion, most clearly the factors which will lead to a decision affecting all. At Didcot the respondents hold the head contract for the construction of a power station on behalf of the Central Electricity Generating Board. It is a large project, upon which about 500 men are employed, and the work is expected to last for between three and four years. The respondents have erected a number of temporary buildings on the site to house their administration staff, to provide stores and workshops, and to serve as messing and changing rooms. In 1969, the assessment to local rates in respect of these buildings amounted to £1,263. The arrangements as to the preparation of plans, the critical path network, and the engagement and administration of labour are in accordance with the general practice I have outlined above. There is this special feature arising out of the fact that at Didcot the respondents are the main contractors : the site manager, who is responsible to Renfrew, co-ordinates the work of the sub-contractors, and has power to vary the terms of the sub-contracts. The question whether the respondents are entitled to regional employment premium payments in respect of their employees at Didcot will depend in the first place on the exact terms of the Finance Act, 1967 Section 26 (1) provides that the premium is payable. "where, in the case of a person in an employment to which s.l of the principal Act [sc the 1966 Act] applies in respect of whom a payment under that section falls to be made to the employer, the establishment in or from which that employment is carried out, is situated wholly within a development area . . . ." The words I have italicised appear first in s.l (2) of the 1966 Act; selective employment premium as provided for in the preceding subsection, is applied "to any employment in, or carried out from, an establishment" fulfilling certain conditions. It is, therefore, plain that the meaning of the words contained in the 1967 Act may be interpreted by reference to the former Act. The phrase is used continually throughout the code, for example, in s.7 (1) of the 1966 Act in connection with the keeping and maintaining of registers of establishments for the purposes of sections 1 and 2, in s.26 (1) of the 1967 Act, as pointed out, in connection with regional employment premium, and in s.l (6) of the 1968 Act, in connection with the confining of the payment of premiums to development areas. The phrase contains two words which may be equivocal - "establishment" and "employment". An establishment may be either incorporateal (an abstraction), or local (a place). The National Coal Board is an establishment in the first sense, so is its headquarters in Westminster in the second. I am satisfied that here the word is used in the second sense. In my opinion, the remaining word of the phrase make that clear. You could perhaps colloquially, though not accurately, say that a man's employment was in the National Coard Board, but you could not say that it was carried out from the National Coal Board, though it might well be carried out from the headquarters in Westminster. Section 10 of the 1966 Act provides by subsection (2) that if access between all parts of an area comprised in the premises occupied by an employer is not available without leaving the premises of the employer, then each part is to be treated as the site of a separate establishment, and goes on in subsection (3) to speak of premises "constituting the site of a single establishment". Again, s.l (3) of the 1968 Act provides for the withdrawal of selective employment premiums from public undertakings unless the employment "is employment at or from places situated wholly within a development area". Here the word "places", in the case of public undertakings, is made exactly the equivalent of "establishments" in the private sector. "Employment" may mean the act of entering into a contract of employment - as Lord Cameron put it in the Court of Session, "the employer's employment of the employee" - or it may mean, quite simply, work. I prefer the latter interpretation. I do not think it is helpful to attempt a sharp discrimination between looking to the activity of the employer and looking to the activity of the employee, but certainly the words of the statute seem to be concentrating on the latter. It is the employee who "carries out" the employment, and that must show where the primary emphasis lies. So I would paraphrase, for this purpose, the word "employment" as "work carried out by a person under a contract of employment". In the light of these interpretations, accordingly, the first question is whether the tribunal were right in holding that there is an establishment at Didcot within the meaning of the statute in which the word is used. That the respondents have such an establishment at Renfrew is not in question. The word "establishment" has not received any statutory definition, but in Secretary of State for Employment and Productivity vs. Vic Hallam Ltd., [5] Lord Parker, C.J. laid down some guidelines: [6] "For my part I find it quite impossible to give any exclusive definition or test as to what constitutes an establishment. The tribunal said that they approached the matter as one of broad common sense. For my part I think that is the correct approach in deciding whether as a matter of fact and degree any particular premises do constitute an establishment. But as it seems to me there are certain indications which help in the matter. The first is one to which I have already referred, exclusive occupation of premises; secondly some degree of permanence - both those are present in this case - and thirdly, as it seems to me, some organisation on the premises, an organisation of the men who are working there. Finally, the question whether a particular premises is an establishment is bound up with the question of where the men who are working there are being employed in or from, because by s.l (2) it is provided that: '. . . this section applies to any employment in, or carried out from, an establishment . . . ' therefore an establishment must be a place in which or from which people are employed. One of the matters, therefore, to be considered in considering whether premises are an establishment, is whether it can be properly said that men are working in or from that establishment. When one finds, as here, a place in which there is no organisation of staff whatsoever, no administration is carried out, then there is a strong pointer, as it seems to me, to it not being an establishment." This passage has been referred to with approval by a Divisional Court in Secretary of State for Employment and Productivity vs. Clarke Chapman & Co. Ltd. [7] and by the Court of Session in the present case. I would wish to follow the guide lines there laid down, which lead me to the conclusion that Didcot is an establishment in the relevant sense. The respondents have exclusive occupation of premises, this very large contract had several years to run, and, apart from the labour organisation on the site, there is the exercise by the site manager of control over the sub-contracts. If, then, Didcot is an establishment, the position of the workers is, in my opinion, that some, such as clerks and storekeepers, workshop fitters and canteen staff, are employed in the establishment, and the remainder carry out their work from it on other parts of the site not forming part of the establishment Here I agree with the conclusion of the tribunal. After pointing out that the requirements laid down by Lord Parker, C.J. are clearly satisfied, the tribunal goes on : "Moreover, for all men working on the site the site establishment is one from which in one sense they are employed. It is the one to which they report each day; at which they receive their orders and from which they go to the constructional sites to carry out their work It is the one from which they collect their wages and to which they make complaints and address enquiries." It is in the next sentence, however, that I cannot agree with the tribunal. "If not constrained by statute to make a choice, we would be prepared to say that there are two establishments from each of which, in some sense, employees working at the sites were employed" - the second site, of course, being Renfrew. Here, in my view, the tribunal misdirected themselves. No doubt the men were, in some sense, employed from Renfrew, but that is not the relevant consideration. The question being, from what establishment did they carry out their employment, then, for those that were not employed in the Didcot establishment, it seems to me there is only one answer. A precisely similar question came before a Divisional Court in Clarke Chapman & Co. Ltd.'s case [8] (supra). The Court followed the decision of the Court of Session in the present case, and did so on the ground it is the practice in revenue and taxation matters that the English Courts should endeavour to keep in line with the Courts of Scotland. At the same time the Court made it plain that they did not agree with that decision. I agree with the criticisms of the Court of Session judgment as stated by Widgery, L.J., and concurred in by the Lord Chief Justice and Bean, J. The basis of the Court of Session's judgment is that you have here men some of whom are employed in the establishment at Didcot, but all from the establishment at Renfrew, and that the employers have therefore in respect of all the men satisfied one of the two conditions either of which would have entitled them to regional payments. As I have indicated, I do not think it is correct to say that the men at Didcot carry out their employment there from Renfrew. In my view, the statutes were not envisaging any such possibility. In most industrial concerns the men work in the establishment, but in some rather exceptional employments, like the present, while all the employees are based on the establishment, some go out to work from it. That is the reason for the propounding of the alternative in the statutory phrase. The employment of the persons at Didcot, accordingly, is not, in my opinion, employment in or carried out from an establishment situated within a development area. The cases of Carrington, Fulham and Barking are not so clear The projects are very much smaller in scale, and we are told very little about the physical nature of the respondents' premises on the sites. However, for the following reasons I think the decision in relation to them should be governed by the decision for Didcot. First, the parties did not distinguish them either before the tribunal, the Court of Session, or this House. Secondly, the general considerations, as far as labour is concerned, are the same as for the establishment at Didcot. Thirdly, the contracts at Fulham and Barking, employing now comparatively few men, are running down; assuming that at their inception they were, for present purposes, indistinguishable in principle from Didcot, and were establishments on their own, we have no materials on which we could decide at what stage, if ever, their character changed. For these reasons I would allow this appeal. Appeal allowed with costs I have had the advantage of reading the speech of my noble and learned friend, Lord Kilbrandon. I entirely agree with regard to the Didcot establishment but I have more difficulty with regard to the three smaller sites. I do not think that it can have been intended that large numbers of small sites should be treated as separate establishments, nor do I think that it would be in anyone's interest to do this. But as the facts with regard to those three small sites are not given very fully I am prepared to treat them as borderline cases and to agree that they can be regarded as establishments. I would therefore allow this appeal.

Lord Morris of Borth-y-Gest :

[3]My Lords,[4]I have had the advantage of reading in advance the speech prepared by my noble and learned friend, Lord Kilbrandon, and I am in agreement with it. As we are differing from the Court of Session and as our decision is of general application I will briefly express my view.[5]After the introduction of selective employment tax (see s.44 of the Finance Act, 1966), there were some provisions for a refund of it to the employer who had paid it. In certain cases (see s.l of the Selective Employment Payments Act, 1966), there could be a refund with a premium. In certain cases (see s.2 of that Act) there could be a refund but without a premium In certain cases there was no refund at all Then by s.26 (1) of the Finance Act, 1967, there could in certain cases be an increased premium where there was a refund : that was known as a regional employment premium : that could become payable if the "establishment" (a term to which I must more fully refer) was within a development area. Later (see s.l of the Revenue Act, 1968), it was provided that no addition to the refund of tax should be added to a payment under s.l of the 1966 Act unless the relevant "establishment" was situated wholly within a development area.[6]The word "establishment" is found in the 1966 Act. The conditions for a refund with a premium are to be found in s.l. Under that section the refund (with premium) is made by the Minister of Labour to an employer(a) who has paid selective employment tax(b) for any contribution week(c) in respect of a person in an employment to which the section applies. Subject to an exception not now material the section applies" to any employment in or carried out from an establishment" satisfying certain conditions.[7]The respondent company has a number of divisions including a manufacturing division and a construction division. The construction division is chiefly concerned with the installation and erection of steam raising plant, often of a very large size manufactured by the respondent company. The construction division is also concerned (though to a lesser degree) with repairs to such plant. Both the manufacturing and construction divisions are based at Porterfield Road, Renfrew, where they occupy very large engineering premises. The work of installing and erecting plant must naturally be carried out at the place where it is desired to have the plant. The work of repairing plant must naturally be carried out wherever the plant is. So it followed that the respondent company had many men working on sites in many different places. Many of these places were not within development areas. But Renfrew is When the legislation to which I have referred resulted in differences concerning payments to certain employers according as to whether an "establishment" was or was not within a development area the respondent company wanted to know how they stood. So under s.7 (5) of the 1966 Act they submitted a question to the appropriate tribunal. It is important to see how the question was framed. It was as follows:
"Whether the employees (of the respondents) employed on sites out. with development areas during the period from 6th January to 6th July, 1969, were employed from (the respondents') establishment at Renfrew and whether (the respondents) are entitled to be paid regional payments in respect of these employees for the said period."
[8]It is to be noted that one part of the question was expressed as being whether those employed on sites were "employed from" the respondents' establishment at Renfrew. This is not the language of s 1 and it is to the language of s.l of the 1966 Act that attention must be paid.[9]For the purposes of the hearing before the tribunal four sites were taken as example sites. They were sites at Didcot, Carrington, Fulham and Barking. Those sites are not within development areas. At Didcot the respondents were engaged in constructing a power station : at Carrington in installing a steam raising boiler : at Fulham and Barking in renewing and repairing steam raising plant. At Didcot the work was to last nearly four years. Over 500 people were to be concerned. At Fulham (to take the site where as between the four sites the operations were on the smallest scale) the work was to last about one and a half years and initially there were 38 people concerned The facts concerning the four sites are fully set out in the decision of the tribunal and I need not summarise them, but it is helpful to have in mind the nature of the labour forces at the sites. Some were "travelling men". They were employees of the respondents who had undertaken to work at any site within the United Kingdom. Some were chosen by the labour officer (who is stationed at Renfrew) from persons who had applied to the respondents for work. Some came as the result of requests to the Department of Employment and Productivity who recruited on a nation-wide basis. Some were locally recruited from men who called at a site asking for work. Generally speaking, the work at the sites was planned and directed from Renfrew.[10]The refund (with a premium) under s.l of the 1966 Act will be made where the tax (for any contribution week) has been paid by an employer in respect of a person "in an employment" to which the section applies and (for present purposes) the section applies to any employment in, or carried out from, an establishment that satisfies certain conditions as set out in s.l (2). One of these is that the "establishment is engaged by way of business" in certain activities. If there was an "establishment" at Renfrew it is common ground that it satisfied the statutory conditions. If there was an "establishment" at each of the four sites it is also common ground that each one satisfied the statutory conditions.[11]What, then, is an "establishment"? Section 10 (2) of the 1966 Act refers to the site of an establishment : s 7(1) deals with registers of establishments : s 7(2) provides that no business or part of a business is to be registered except on the application of the employer. Section 1 (2) refers to an establishment being "engaged by way of business" : it also refers to "employed persons employed in any employment in, or carried out from," an establishment. It would seem clear that where operations of any magnitude are to take place on a site (such as a place where a power station or a steam raising boiler is to be built or where plant is to be repaired) there would be need to have some premises (probably temporary buildings or sheds or huts) on the site. It would be necessary to have places where men could report, places where they could resort, places where they were paid, places where records were kept, places where tools were kept or where stores or equipment were kept.[12]Some tests or indications as to what may constitute an establishment were set out by Lord Parker, C.J. in a case Secretary of State for Employment and Productivity vs. Vic Hallam Ltd. [1] He mentioned "exclusive occupation of premises":
"some degree of permanence": "some organisation on the premises, an organisation of the men who are working there"
. So he said that one of the matters to be considered was whether it could properly be said that men are working in or from such premises.[14]The tribunal were assisted by those tests or indications which Lord Parker formulated and stated that it was not in dispute that there was an establishment at the Renfrew works. As regards the four sites the tribunal held as follows:
"On each of the four sites described in evidence there was sufficient in the way of premises within the exclusive occupation of the applicants, of permanence and of organisation of activities of the men working on the site to constitute an establishment at each site. Moreover for all men working on the site the site establishment is one from which in some sense they are employed. It is the one to which they report each day : at which they receive their orders and from which they go to the constructional sites to carry out their work. It is the one from which they collect their wages and to which they make complaints and address enquiries."
The conclusion which the tribunal reached that at each one of the four sites there was an "establishment" was in my view correct : it was a conclusion amply warranted from the facts as found.[15]As to the Renfrew works, where there was an "establishment" the tribunal posed the question whether it was the establishment "from which the employment of men on sites outwith development areas is carried out". The tribunal said:
"The Renfrew works have a good claim to be so regarded. These works are the establishment to which each employee applies for employment; from which he is paid and dismissed; where all his labour records are kept; where most of the planning is done: and from which supervision and instruction proceed. In the case of those employees of the applicants who are travelling men, sites may come and sites may go but Renfrew remains as the centre from which they are employed and by which they are transferred from one site to another. For men locally employed, the picture is rather different. No doubt they are engaged, paid and dismissed by the labour officer at Renfrew but their local site is the only establishment of the applicants with which they have any connection "
[16]The tribunal proceeded to say that they would be prepared to hold that there were two establishments "from" each of which, in some sense, employees working at sites "were employed" They considered that they had to make a choice because the relevant statutory provisions envisaged that for each person there is only one establishment "in or from which his employment is carried out". They chose Renfrew because, taking the "travelling men", Renfrew "was the place from which travelling men transferred from other sites should be considered as having been employed": and that no distinction should be made in the case of travelling men working at sites at which they had commenced employment with the applicants. Though the tribunal considered that a better case could be made for treating "local men" as employed at and from the sites where they worked they decided on balance that they should be treated as being "employed from Renfrew". That was because all important matters relating to their employment were handled at Renfrew and because their employment was controlled from there. No distinction could be drawn between the four sites[17]The several references made by the tribunal to the conception of men being employed "from" Renfrew were in line with the decision which was arrived at. It was in the following terms:
"that the employees of the applicants employed on sites at Didcot, Carrington, Fulham and Barking during the period from 6th January, 1969 to 6th July, 1969, were employed from the applicants' establishment at Renfrew and the applicants are entitled to be paid regional payments in respect of these employees for the said period."
[18]With every respect, it seems to me that the tribunal's approach and finding involved a departure from the language of the statute. For an employer to be entitled under s.l of the 1966 Act he must have paid selective employment tax (for a contribution week) in respect of a person "in an employment" to which that section applies : and the statutory provision is that the section applies "to any employment in, or carried out from an establishment" satisfying certain conditions. It being found and accepted that there is an establishment (satisfying the conditions) at each one of the four sites, the question in reference to a person employed at one of the sites was not whether it could be said that he was in one sense employed "from" Renfrew, but whether he was in employment in or carried out from the establishment at the site. If someone was engaged in clerical work that involved his working indoors in one of the temporary huts or buildings erected on a site it could not rationally be said that he was working in the Renfrew establishment. If someone was engaged in out-door work such as that of constructing a power station at a site it seems to me that he would be in employment carried out from the establishment at the site. It would not be a normal use of language to say that he was in employment carried out from the establishment at Renfrew. In the context of s.l of the 1966 Act I think that the notion of an employment being "carried out" denotes a carrying out by the person who is employed : he will carry out his employment at the place where he works. The word "employment" involves that there is someone who employs because he wants some work to be done and that there is someone who is employed and who agrees to do the work. In s.l of the 1966 Act I think that the primary reference which is made by the words "employment . . . carried out" is a reference to the person employed He is the person who is "in an employment". He carries out that employment and he carries it out from some base or establishment. Those on the sites were carrying out their employment from those sites. The work they were doing was directed from Renfrew and because of the internal arrangements of the respondents it could be said that in one sense they were employd "from" Renfrew. The conception of being employed "from" a place is a difficult one, but whether it is or is not it is not one that is expressed in or that is inherent in the language of the statute. The statute enjoins the enquiry whether persons work in a qualifying establishment or whether they carry out their work from such an establishment.[19]On the facts as found by the tribunal their decision should have been that the employees employed at the four sites during the period referred to were in employment in or carried out from the respective establishments at the sites and that the respondents were not entitled to be paid regional payments in respect of those employees for the period referred to[20]We were referred to the decision of the Divisional Court in Secretary of State for Employment and Productivity vs. Clarke Chapman & Co. Ltd. [2] The facts in that case were closely parallel to the facts in this case. In line with practice in revenue and taxation matters the Divisional Court followed the decision of the Court of Session in the present case while indicating, for the reasons given by Widgery, L.J., that their own view would have led them to an opposite decision. I find myself in agreement with the reasons expressed by Widgery, L.J.[22]I would allow the appeal. (1971) 6 I.T R. 128, (1971) 1 W.L.R. 1094 Lord Diplock :[23]My Lords,[24]I agree with the speech of my noble and learned friend, Lord Kilbrandon, and for the reasons which he gives would allow this appeal.

Lord Simon of Glaisdale :

[26]My Lords,[27]I have had the advantage of reading in advance the speeches prepared by my noble and learned friends, Lord Morris of Borth-y-Gest and Lord Kilbrandon, with which I agree.[28]As its name implies, the selective employment tax was imposed with a view to fiscal discrimination between different sorts of employment - even though the original taxing provision, s.44 of the Finance Act, 1966, on which all subsequent provisions depend, itself provided no element of discrimination. A significant feature of the tax - as indeed also of concomitant statutory provisions which did provide the discrimination - is that it was weekly in temporal scope.[29]The first of these concomitant statutory provisions was the Selective Employment Payments Act, 1966. When taken together with s.44 of the Finance Act, 1966, it provided (to speak very broadly) for fiscal discrimination in favour of employment in productive industry and against employment in service industry. The second concomitant statutory provision, contained in s.26(l) of the Finance Act, 1967, when taken together with the provisions of the previous Acts to which I have referred to, provided for fiscal discrimination in favour of employment in development areas (i.e., areas of higher incidence of unemployment) and thus against employment in other areas (i.e., areas of higher incidence of employment).[30]It will be immediately apparent that the decision appealed from involves a result which must be directly contrary to what Parliament intended in 1967. It involves that employers and employees in areas of high or higher incidence of unemployment are taxed to subsidise the employment of people, including those recruited locally, in areas of high or higher incidence of employment (e.g. south-east England). Normally such a conclusion would be the end of the case : a decision directly contrary to what Parliament so plainly intended must be wrong.[31]In the instant situation, however, the matter cannot be disposed of thus summarily. The 1967 Act can only operate within the framework of the 1966 Acts; and, as I have pointed out, the discriminatory purpose of the Selective Employment Payments Act, 1966, is not the same as that of s 26 of the Finance Act, 1967. Nevertheless, although even the manifest intention of a later Act can rarely control the construction of an earlier Act, it is legitimate, in my view, if there is any dubiety as to the construction of the earlier Act, to resolve this in favour of giving effect to the manifest intention of the later Act. This is particularly so when the earliest provision of all merely lays a general foundation (here, for discrimination between employments - potentially on widely different grounds) and where the ensuing particular provisions operate in perfect harmony.[32]In any case, even looking no further than the Selective Employment Pay-ments Act, 1966, the appellant is, in my judgment, entitled to succeed. There are three crucial terms or phrases which fall for interpretation in their instant context: - "establishment", "employment" and "carried out from". "Establishment" is a word of wide meaning. Among other, different, senses, it can signify, on the one hand, a body of persons (generally an organised body) or, on the other hand, premises - with a number of senses intermediate between these two. I think that any attempt at exhaustive judicial definition would be inappropriate where the draftsman himself has not attempted to define; but what this word conveys to me in its instant context is a body of persons carrying on activities by way of business (see Selective Employment Payments Act, 1966, s.l (2)(a)) associated with a locality. I think that the criteria suggested by Lord Parker, C.J. in Secretary of State for Employment and Productivity vs. Vic Hallam Ltd. [3] are relevant and likely to be helpful in deciding in particular cases whether what is in question amounts to an "establishment". A further criterion that might be useful in some cases (though possibly inherent in Lord Parker's third and fourth criteria) would be to ascertain where lies the effective control of the activities of those whose "employment" (the term next for consideration) is in question - which in turn would involve consideration of how far and in what respects control is delegated. (In all four cases under instant consideration, control of employment was so delegated as to be effectively exercised at the local site and not at Renfrew.) I would not, for myself, add size as a further criterion - partly because of difficulty in drawing the differentiating line, but even more because a number of small units of employment could cumulatively be significant for the purposes of the relevant Act.[34]The tribunal found that the respondents had "establishments" in all four localities in question. I would have found so myself on the available evidence : in any case, it is sufficient to say there was material which justified the finding of the tribunal. Then for "employment". In the context of these Acts, the word signifies to me work done under a contract of employment. I do not think it means the contract of employment itself, nor the contractual relationship simpliciter. I can see no reason for considering it from the point of view of the employer : on the contrary, if anything turns on the choice, I think it should be considered from the point of view of the employee, since it is his employment (i.e. work) which the Act contemplates as the subject-matter of discrimination.[35]Thirdly, employment "carried out from" an establishment. I think that this means no more than that the employees whose employment is in question are, in popular language, "based on" a particular establishment. The employees whose employment is in question in the instant appeals were based on the establishments at the local sites. They were not based on Renfrew; so that their employment was not "carried out from" any establishment there. To hold that it was "carried out from" there was a misdirection.[36]I desire to add only two further matters. First, I agree with the observations of Widgery, L.J. in Secretary of State for Employment and Productivity vs. Clarke Chapman & Co. Ltd. [4] , although not with the conclusion to which the court felt bound out of comity. Secondly, once there is an "establishment", it does not cease to be such merely because it is running down. In businesses like the respondents' the activities are bound to build up and run down. In this connection, the situation must, in view of the temporal incidence of tax, refund and premium, be considered from week to week. The provisions relating to registration of establishments contained in s. 7 of the Selective Employment Payments Act, 1966, are also important in considering problems of build-up and run-down - in particular, sub-section (1) (whereby the Minister is not required to make payment for any contribution week falling wholly or partly before the date of registration of the establishment) and sub-section (3) (whereby the Minister may, subject to reference to the tribunal, remove from the register any establishment which he is satisfied no longer qualifies to be included in it).[38]I would allow the appeal. Lord Kilbrandon :[39]My Lords,[40]Before coming to the closer examination of the relevant statutory provisions which will be necessary for the disposal of this appeal, I propose to describe as briefly as possible the scheme of the selective employment tax (SET) and its associated benefits. The tax was imposed by s. 44 of the Finance Act, 1966, which provided that: - ". . . in respect of each contribution week beginning on or after 5th September, 1966, every employer shall be liable, in respect of each person in respect of whom the employer is liable to pay an employer's . . . contribution for that week to pay . . ."[41]SET, the amount of the weekly payment being regulated by the age and sex of each employed person. The tax was to be collected together with the employer's weekly contributions in respect of his employees. In spite of the name of the tax, there is in the instituting statute no element of selection to be found. For that you must go to the Selective Employment Payments Act, 1966, which was passed more or less contemporaneously; I shall call it the 1966 Act, since it will not be necessary to refer to the Finance Act, 1966, again.[42]Section 2 of the 1966 Act provides for "selective employment refund", namely, the repayment of the tax paid to an employer who has paid SET for any contribution week in respect of a person in an employment to which the section applies. Section 1 of the Act provides for "selective employment premium"; not only does the employer receive repayment of the SET he has paid in respect of a person in an employment to which that section applies, but also a premium calculated by reference to that person's age and sex. Section 3 of the 1966 Act provides for payment of selective employment refund and of selective employment premium to employers who may be classified as public undertakers, upon the same principle as those payments are to be made to employers in the private sector under s. 1 and 2.[43]In both s. 1 and s. 2, the employment to which the sections apply is "employment in, or carried out from" establishments having certain characteristics. Putting the matter broadly, and using language which is not intended to compromise the questions which are in issue, the policy of Parliament appears to have been to confer repayment in respect of employment in some forms of industrial activity, to confer repayment plus a premium in respect of others, and for the rest to leave the SET paid to be retained by the Treasury.[44]SET, with its associated refunds and premiums, has been made the vehicle of a second policy, namely, the conferring of benefit and encouragement on the development areas. These are areas in which there is a higher than average rate of unemployment, and a lower than average rate of industrial development. By s.26 (1) of the Finance Act, 1967, the selective employment premium payable under s.l of the 1966 Act is increased, in respect of development areas, by an amount called the "regional employment premium." A further discrimination in favour of development areas is effected by s 1 of the Revenue Act, 1968, whereby the premium payable, in addition to refund of tax, under s.l of the 1966 Act, is no longer to be payable except - again to use non-statutory language - in respect of development areas. These payments, namely, the refund of tax, the selective employment premium, and the regional employment premium have been compendiously and conveniently termed "the regional payment" by the industrial tribunal which dealt with the present case. The question before us is whether the respondent employers are entitled to regional payment in respect of the employment of certain of their employees who work in areas which are not development areas and whose situation I am about to describe.[45]The respondents are a subsidiary of Babcock and Wilcox Ltd.; they have their registered office and their head office in London, where are stationed their planning and engineering staff, as also the main design drawing offices. They are organised in a number of divisions. The division with which we are concerned is the construction division, which is based at Renfrew, in a development area. That division is chiefly concerned with the installation and erection of steam-raising plant, manufactured by the respondents' manufacturing division, also situated at Renfrew, and to a lesser extent with repairs to such plant. The sites on which their operations are carried on are scattered over the United Kingdom. The allocation of functions as between the divisional headquarters at Renfrew and the personnel actually on the sites where the construction is proceeding has been carefully described in the tribunal's reasons for their decision, and I shall only summarise it here. Renfrew (as I shall describe the division's headquarters there) prepares what is called the "critical path network", which I take to mean a co-ordinated work programme. Each contract is under the charge of a sponsor engineer at Renfrew, and under the day-to-day charge of a resident engineer. The resident engineer, except for being in charge of a small cash float, has no financial authority. Nor can he alter the critical path network, though he can recommend alterations to the sponsor engineer.[46]When it comes to labour, with which of course this appeal is primarily concerned, the position is that there are several classes of employee, some being "travelling men" who may move from site to site, and some being specially recruited at the Department of Employment and Productivity for a contract, or accepted for employment locally at the site. Neither party in this case distinguishes in any way, for present purposes, between the classes of labour; it is enough to say that all are hired through Renfrew, by whom they are individually taken on, and where their documents are kept. So also their employment is terminated by Renfrew, except for misconduct, when the resident engineer can dismiss. Gross weekly pay is calculated at the site, and the wages records go to Renfrew, where the net pay is calculated. Renfrew sends a cheque to cover the total sum of wages to the site, where the wage-packets are prepared and handed over to the employees[47]When the question came to be raised between the Secretary of State for Employment and the respondents whether, in respect of the persons employed at the many sites where the respondents' contracts are being carried out, not being sites within development areas, the respondents are entitled to regional payment, it was agreed to test the matter by reference to four individual sites, namely, those at Didcot, Carrington, Fulham and Barking No distinction was sought to be made in principle among these sites by either party for the purposes of this appeal, although the sites differ greatly in size and character. I shall take first Didcot as exhibiting, in my opinion, most clearly the factors which will lead to a decision affecting all.[48]At Didcot the respondents hold the head contract for the construction of a power station on behalf of the Central Electricity Generating Board. It is a large project, upon which about 500 men are employed, and the work is expected to last for between three and four years. The respondents have erected a number of temporary buildings on the site to house their administration staff, to provide stores and workshops, and to serve as messing and changing rooms. In 1969, the assessment to local rates in respect of these buildings amounted to £1,263. The arrangements as to the preparation of plans, the critical path network, and the engagement and administration of labour are in accordance with the general practice I have outlined above. There is this special feature arising out of the fact that at Didcot the respondents are the main contractors : the site manager, who is responsible to Renfrew, co-ordinates the work of the sub-contractors, and has power to vary the terms of the sub-contracts.[49]The question whether the respondents are entitled to regional employment premium payments in respect of their employees at Didcot will depend in the first place on the exact terms of the Finance Act, 1967 Section 26 (1) provides that the premium is payable. "where, in the case of a person in an employment to which s.l of the principal Act [sc the 1966 Act] applies in respect of whom a payment under that section falls to be made to the employer, the establishment in or from which that employment is carried out, is situated wholly within a development area . . . ."[50]The words I have italicised appear first in s.l (2) of the 1966 Act; selective employment premium as provided for in the preceding subsection, is applied "to any employment in, or carried out from, an establishment" fulfilling certain conditions. It is, therefore, plain that the meaning of the words contained in the 1967 Act may be interpreted by reference to the former Act. The phrase is used continually throughout the code, for example, in s.7 (1) of the 1966 Act in connection with the keeping and maintaining of registers of establishments for the purposes of sections 1 and 2, in s.26 (1) of the 1967 Act, as pointed out, in connection with regional employment premium, and in s.l (6) of the 1968 Act, in connection with the confining of the payment of premiums to development areas.[51]The phrase contains two words which may be equivocal - "establishment" and "employment". An establishment may be either incorporateal (an abstraction), or local (a place). The National Coal Board is an establishment in the first sense, so is its headquarters in Westminster in the second. I am satisfied that here the word is used in the second sense. In my opinion, the remaining word of the phrase make that clear. You could perhaps colloquially, though not accurately, say that a man's employment was in the National Coard Board, but you could not say that it was carried out from the National Coal Board, though it might well be carried out from the headquarters in Westminster. Section 10 of the 1966 Act provides by subsection (2) that if access between all parts of an area comprised in the premises occupied by an employer is not available without leaving the premises of the employer, then each part is to be treated as the site of a separate establishment, and goes on in subsection (3) to speak of premises "constituting the site of a single establishment". Again, s.l (3) of the 1968 Act provides for the withdrawal of selective employment premiums from public undertakings unless the employment "is employment at or from places situated wholly within a development area". Here the word "places", in the case of public undertakings, is made exactly the equivalent of "establishments" in the private sector. "Employment" may mean the act of entering into a contract of employment - as Lord Cameron put it in the Court of Session, "the employer's employment of the employee" - or it may mean, quite simply, work. I prefer the latter interpretation. I do not think it is helpful to attempt a sharp discrimination between looking to the activity of the employer and looking to the activity of the employee, but certainly the words of the statute seem to be concentrating on the latter. It is the employee who "carries out" the employment, and that must show where the primary emphasis lies. So I would paraphrase, for this purpose, the word "employment" as "work carried out by a person under a contract of employment".[52]In the light of these interpretations, accordingly, the first question is whether the tribunal were right in holding that there is an establishment at Didcot within the meaning of the statute in which the word is used. That the respondents have such an establishment at Renfrew is not in question. The word "establishment" has not received any statutory definition, but in Secretary of State for Employment and Productivity vs. Vic Hallam Ltd., [5] Lord Parker, C.J. laid down some guidelines: [6] "For my part I find it quite impossible to give any exclusive definition or test as to what constitutes an establishment. The tribunal said that they approached the matter as one of broad common sense. For my part I think that is the correct approach in deciding whether as a matter of fact and degree any particular premises do constitute an establishment. But as it seems to me there are certain indications which help in the matter. The first is one to which I have already referred, exclusive occupation of premises; secondly some degree of permanence - both those are present in this case - and thirdly, as it seems to me, some organisation on the premises, an organisation of the men who are working there. Finally, the question whether a particular premises is an establishment is bound up with the question of where the men who are working there are being employed in or from, because by s.l (2) it is provided that: '. . . this section applies to any employment in, or carried out from, an establishment . . . ' therefore an establishment must be a place in which or from which people are employed. One of the matters, therefore, to be considered in considering whether premises are an establishment, is whether it can be properly said that men are working in or from that establishment. When one finds, as here, a place in which there is no organisation of staff whatsoever, no administration is carried out, then there is a strong pointer, as it seems to me, to it not being an establishment."[54]This passage has been referred to with approval by a Divisional Court in Secretary of State for Employment and Productivity vs. Clarke Chapman & Co. Ltd. [7] and by the Court of Session in the present case. I would wish to follow the guide lines there laid down, which lead me to the conclusion that Didcot is an establishment in the relevant sense. The respondents have exclusive occupation of premises, this very large contract had several years to run, and, apart from the labour organisation on the site, there is the exercise by the site manager of control over the sub-contracts.[55]If, then, Didcot is an establishment, the position of the workers is, in my opinion, that some, such as clerks and storekeepers, workshop fitters and canteen staff, are employed in the establishment, and the remainder carry out their work from it on other parts of the site not forming part of the establishment Here I agree with the conclusion of the tribunal. After pointing out that the requirements laid down by Lord Parker, C.J. are clearly satisfied, the tribunal goes on :
"Moreover, for all men working on the site the site establishment is one from which in one sense they are employed. It is the one to which they report each day; at which they receive their orders and from which they go to the constructional sites to carry out their work It is the one from which they collect their wages and to which they make complaints and address enquiries."
It is in the next sentence, however, that I cannot agree with the tribunal. "If not constrained by statute to make a choice, we would be prepared to say that there are two establishments from each of which, in some sense, employees working at the sites were employed" - the second site, of course, being Renfrew.[56]Here, in my view, the tribunal misdirected themselves. No doubt the men were, in some sense, employed from Renfrew, but that is not the relevant consideration. The question being, from what establishment did they carry out their employment, then, for those that were not employed in the Didcot establishment, it seems to me there is only one answer.[57]A precisely similar question came before a Divisional Court in Clarke Chapman & Co. Ltd.'s case [8] (supra). The Court followed the decision of the Court of Session in the present case, and did so on the ground it is the practice in revenue and taxation matters that the English Courts should endeavour to keep in line with the Courts of Scotland. At the same time the Court made it plain that they did not agree with that decision. I agree with the criticisms of the Court of Session judgment as stated by Widgery, L.J., and concurred in by the Lord Chief Justice and Bean, J. The basis of the Court of Session's judgment is that you have here men some of whom are employed in the establishment at Didcot, but all from the establishment at Renfrew, and that the employers have therefore in respect of all the men satisfied one of the two conditions either of which would have entitled them to regional payments. As I have indicated, I do not think it is correct to say that the men at Didcot carry out their employment there from Renfrew. In my view, the statutes were not envisaging any such possibility. In most industrial concerns the men work in the establishment, but in some rather exceptional employments, like the present, while all the employees are based on the establishment, some go out to work from it. That is the reason for the propounding of the alternative in the statutory phrase. The employment of the persons at Didcot, accordingly, is not, in my opinion, employment in or carried out from an establishment situated within a development area.[59]The cases of Carrington, Fulham and Barking are not so clear The projects are very much smaller in scale, and we are told very little about the physical nature of the respondents' premises on the sites. However, for the following reasons I think the decision in relation to them should be governed by the decision for Didcot. First, the parties did not distinguish them either before the tribunal, the Court of Session, or this House. Secondly, the general considerations, as far as labour is concerned, are the same as for the establishment at Didcot. Thirdly, the contracts at Fulham and Barking, employing now comparatively few men, are running down; assuming that at their inception they were, for present purposes, indistinguishable in principle from Didcot, and were establishments on their own, we have no materials on which we could decide at what stage, if ever, their character changed. For these reasons I would allow this appeal.[60]Appeal allowed with costs Note 1 (1970) 5 I.T.R. 108. Note 2 (1971) 6 I.T R. 128, (1971) 1 W.L.R. 1094 Note 3 (1970)5 I.T.R. 108. Note 4 (1971) 6 I.T.R. 128; (1971) I.W.L.R. 1094 Note 5 (1970) 5 I.T.R. 108. Note 6 (1970) 5 I.T.R. at 110. Note 7 (1970) 5 I.T.R. at 110. Note 8 (197lT6 I.T.R. 128.[61]Note 1 (1970) 5 I.T.R. 108.