Bunce v Postworth Ltd trading as Skyblue
| Jurisdiction | England & Wales |
| Judge | Lord Justice Keene,Lord Justice Gage,Sir Martin Nourse |
| Judgment Date | 04 May 2005 |
| Neutral Citation | [2005] EWCA Civ 490 |
| Docket Number | Case No: A2/2004/1551 EATRF |
| Date | 04 May 2005 |
| Court | Court of Appeal (Civil Division) |
[2005] EWCA Civ 490
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM
EMPLOYMENT APPEAL TRIBUNAL
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Keene
Lord Justice Gage and
Sir Martin Nourse
Case No: A2/2004/1551 EATRF
Andrew Hogarth QC (instructed by Messrs O H Parson and Partners, London WC2H 8PR) for the appellant
John Bowers QC (instructed by Clarks Legal LLP, London WC2E 9RZ) for the respondent
This is another appeal which is concerned with the legal problems which arise from the increased use of workers supplied by an employment agency to a client in situations where, in the past, the worker would normally have been regarded as the employee of either the employment agency or the client. The employment status of the worker in such cases may be relevant in a number of types of ways. It may, for example, affect whether anyone is vicariously liable for the torts committed by him in the course of his work. But one of the most important ways in which such an issue may be relevant, as in the present case, is in respect of the statutory right enjoyed by employees not to be unfairly dismissed. Putting it shortly, it is only an "employee" who has the right under section 94(1) of the Employment Rights Act 1996 ("the 1996 Act") not to be unfairly dismissed by his "employer".
Who is an employee? According to the definition provided by section 230(1) of the 1996 Act, he is
"an individual who has entered into or works under (or where the employment has ceased, worked under) a contract of employment."
A contract of employment is then defined by section 230(2) as meaning
"a contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing."
A contract of service is not further defined. It appears that the legislature took the view that a contract of service was a creature already sufficiently well-known to the law and was content to leave it to the courts to apply the principles established in the case-law for determining when a contract of service exists or does not exist. The contrast normally drawn in those decided cases has been between a contract of service and a contract for services, the latter being where the task covered by the contract is performed by an independent contractor.
The present appeal arises out of a claim for unfair dismissal brought by the appellant, Mr Bunce, against the present respondent, Postworth Limited, trading as Skyblue, and G.T. Railway Maintenance Limited, trading as Carillion Rail. As the employment tribunal found, Skyblue is an employment agency and Carillion Rail is an associated company whose business is railway maintenance and civil engineering. The appellant is a welder, who entered into an agreement with Skyblue, as a result of which he was sent on a regular basis to carry out welding work for Carillion Rail and other companies. It is not in dispute that, in the 52 weeks before his engagement was ended by Skyblue on 19 December 2002, the appellant worked on 142 assignments, mostly for Carillion Rail but on 39 of them for other companies engaged in railway maintenance. He worked for all or part of each of those 52 weeks. However, the employment tribunal concluded that he was not an employee of either Skyblue or Carillion Rail and that in consequence it had no jurisdiction to hear his unfair dismissal claim.
No appeal was lodged against the decision that he was not an employee of Carillion Rail. The appeal to the Employment Appeal Tribunal ("the EAT") concerned solely the issue whether he had been an employee of Skyblue within the meaning of section 230 of the 1996 Act. The EAT upheld the decision on that issue by the employment tribunal on two grounds: first, that there was an absence of mutuality of obligation between the appellant and Skyblue, and secondly that on the facts, particularly the minimal control exercised by Skyblue (as opposed to Carillion), the tribunal had been entitled to conclude that there was no contract of service with Skyblue. That decision of the EAT is now challenged in the appeal to this court.
It is necessary to set out the relevant facts in more detail. The employment tribunal found that the appellant's relationship with Skyblue began when he signed a written agreement on or about 10 November 2001. The document was entitled "Associate—Term and Conditions of Engagement". The terms expressly provided that this was a contract for services as between Skyblue and the appellant and stated that
"for the avoidance of doubt these Terms and Conditions shall not give rise to a contract of employment"
between Skyblue and the appellant. Clause 3(a) provided that Skyblue agreed to engage the services of the appellant on "these Terms and Conditions" and
"shall undertake to obtain suitable assignments for the Associate (i.e. the appellant) with clients to work as assistant welder."
A subsequent provision specified that he would be paid at an hourly rate of £12. Clause 3(b) stated that the failure of Skyblue to obtain suitable Assignments for the Associate
"shall not give rise to any liability on the part of the Employment Business (i.e. Skyblue) and the Associate recognises that there may be periods between Assignments when no work is available."
Clause 3 (c) provided that
"The Associate shall not be obliged to accept an Assignment offered by the Employment Business."
The agreement provided for a time-sheet to be produced at the end of each week by the Associate to Skyblue, the time-sheet being signed by a representative of the Client. Skyblue would then pay the Associate at the agreed hourly rate for the hours worked, subject to deductions for National Insurance, income tax and any other deductions required by law. Under the agreement the appellant was entitled to paid annual leave but not to sick pay.
Clause 7(a) of the agreement dealt with an Associate's obligations in respect of the conduct of an assignment. It is relied on by the appellant as being of importance to this appeal. It stated that the Associate agreed that during every Assignment and afterwards as appropriate he/she would
"(a) Co-operate with the Client's staff and accept the directions, supervision and instruction of any person in the Client's organisation to whom he/she is responsible and conform to the Client's rules and regulations and normal hours of work and practice."
Clause 8 provided as follows:
"(a) The Employment Business may at any time without notice and without liability instruct the Associate to end an Assignment.
(b) If the Associate is unable for any reason to work on an Assignment he/she should inform the Employment Business by no later than 1hr prior to the start time on the first day of the absence to enable the Employment Business to make alternative arrangements with the Client."
There was also, as part of the same document, a set of terms headed "Associate's Agency Agreement". These too were signed by the appellant. Many of the terms were the same as or similar to those in the first part of the document, but they also provided that the Associate appointed the Employment Business as his agent to arrange Assignments with Clients. Clause 2(a) stated that
"This and the Client Temporary Agreement regulate Assignments undertaken by the Associate with the Client under a contract for services, which applies on each occasion when the Associate provides services to the Client."
"The Client Temporary Agreement" was said to be a document "in the form shown overleaf which sets out the terms upon which the Associate provides services to the Client". That document is not in evidence.
The tribunal found that the appellant was provided with training, certification materials and tools by Skyblue.
The tribunal did not make any explicit findings about how the system set up under these arrangements operated in practice. Evidence in witness statements filed on behalf of the respondents indicated that, when Skyblue were told by a client, such as Carillion Rail, of the need for a certain number of welders, Skyblue would then identify that number of individuals on their data base. Skyblue then would telephone a person on their data base, such as the appellant, about the assignment. If he accepted it, he would be told the location and nature of the job. Once there, he was directed what to do by the local supervisor. When the work was done, it would be inspected by a welder inspector employed by Carillion Rail or other end-client company, as the case might be. The client company in due course would pay Skyblue on a monthly basis a sum based on the number of welders and hours worked that month and their hourly rates. The tribunal found that the rate of pay for the appellant was considerably higher than that of employees of Carillion Rail.
It was also found that in November 2002 there was a change in management responsibilities for those such as the appellant, with his immediate line manager becoming an employee of Carillion Rail. The tribunal did not regard this as changing the relationship between the appellant and Skyblue, and that is not suggested by either party to this appeal.
Eventually there were complaints by Carillion Rail about alleged deficiencies in the appellant's work and on 19 December 2002 he was informed orally by Skyblue that they were terminating the relationship.
In its extended reasons, the employment tribunal referred to a number of authorities on the meaning of a contract of service. It cited the well-known passage from the judgment of MacKenna J in ...
To continue reading
Request your trial
-
Dragonfly Consulting Ltd v R & C Commissioners
...of the Court of Appeal in Dacas v Brook Street Bureau (UK) Ltd [2004] EWCA Civ 217, [2004] ICR 1437 and Bunce v Postworth Ltd [2005] EWCA Civ 490, [2005] IRLR 557. In such a context any statements of intention are likely to be specifically directed towards the characterisation of the contr......
-
The Commissioners for HM Revenue and Customs v Atholl House Productions Ltd
...of employment and contracts for services rendered in a self-employed capacity.” 106 The issue in Bunce v Potsworth Ltd t/a Skyblue [2005] EWCA Civ 490; [2005] ICR 577 was whether the appellant had been employed for the purposes of a claim for unfair dismissal. The employment tribunal had h......
-
Littlewood v HM Revenue and Customs
...and above have said that it is an irreducible minimum and so a determinative issue. 25. In Bunce v Postworth Ltd trading as Skyblue [2005] EWCA Civ 490 (reported at [2005] IRLR 557), a case involving an agency worker, the Court of Appeal had again underlined the need to find the irreducible......
-
Parade Park Hotel (1)
Paul May (2) v Her Majesty's Revenue & Customs, SPC 00599
...SC/3070/2006Authorities referred to in skeletons and not referred to in the decision:Bunce v Postworth Limited trading as Skyblue [2005] EWCA Civ 490 Dacas v Brook Street Bureau Limited [2003] IRLR 190 Global Plant v Secretary of State for Social Services [1972] 1 QB 139 Lee Ting Sang v Chu......
-
It Ain't Necessarily So: A Legal Realist Perspective on the Law of Agency Work
...doctrine in James are instructive, andworth mentioning. Ms James provided support for unaccompanied under-1812 Bunce vPostworth [2005] EWCA Civ 490, [2005] IRLR 557 at [29] (Bunce).13 The latter is considered by some to be the ‘key test’, McGaughey, n 4 above, 16; M. Wynnand P. Leighton, ‘A......