James v Greenwich London Borough Council
| Jurisdiction | England & Wales |
| Judge | Lord Justice Mummery,Lord Justice Thomas,Lord Justice Lloyd |
| Judgment Date | 05 February 2008 |
| Neutral Citation | [2008] EWCA Civ 35 |
| Docket Number | Case No: A2/2007/0368 |
| Court | Court of Appeal (Civil Division) |
| Date | 05 February 2008 |
[2008] EWCA Civ 35
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
MR JUSTICE ELIAS PRESIDENT
Royal Courts of Justice
Strand, London, WC2A 2LL
Before: Lord Justice Mummery
Lord Justice Thomas and
Lord Justice Lloyd
Case No: A2/2007/0368
UKEAT/0006/06/ZT
Mr Richard O'Dair (instructed by Hammersmith & Fulham Law Centre) for the Appellant
Mr Jonathan Cohen (instructed by Legal Service Department London Borough of Greenwich) for the Respondent
Hearing date: 30 th October 2007
The issue
The issue in this appeal is whether the employment tribunal (ET) erred in law in its decision of 13 October 2005 that the appellant/claimant, Ms Merana James, was not an employee of the respondent London Borough of Greenwich (the Council), for which, through an employment agency, she performed paid work for a period of three years prior to the Council's decision to replace her with another worker supplied by the agency.
The ET's rejection of her unfair dismissal claim was upheld by the Employment Appeal Tribunal (the EAT) on 21 December 2006 on the ground that her appeal raised no question of law. On 23 March 2007 Sir Henry Brooke granted permission to appeal to this court on the ground that, although the EAT judgment was “impressively reasoned”, he could not say that “there is no real prospect of success.”
Ms James could certainly be described as an “agency worker” in the general sense that she had a “Temporary Worker Agreement” with a well-known employment agency, which found her a position as a housing support worker with the Council. After several years the Council replaced her with another worker supplied by the agency. In response to her claim for unfair dismissal, the Council disputed her legal status as an employee under Part X of the Employment Rights Act 1996 (the 1996 Act). The decisions of both ET and of the EAT (chaired by its President, Elias J) were that she was not employed by the Council under a contract of service. So she fell outside the job security scheme of statutory protection from unfair dismissal.
As evidenced by other recent decisions of the EAT ( Cotswold Developments Construction Ltd v. Williams [2006] IRLR 181; Cairns v. Visteon UK Ltd [2007] IRLR 175; Consistent Group v. Kalwak [2007] IRLR 560; Craigie v. LB of Haringey UKEAT/0556/06/JOJ; Astbury v. Gist Ltd UKEAT/0619/06/DA; Heatherwood & Wrexham Park Hospitals NHS Trust UKEAT/0633/06/LA; Harlow District Council v. SJ O'Mahony & APS Recruitment Limited (21 June 2007— UKEAT/0144/07/LA); Wood Group Engineering (North Sea) Ltd v. Robertson UKEATS/0081/06/MT; and National Grid Electricity Transmission PLC v. Mr D Wood (24 October 2007— UKEAT/0432/07/DM) and the decisions of this court in Franks v. Reuters Ltd [2003] ICR 1166; Dacas v. Brook Street Bureau (UK) Ltd [2004] ICR 1437 and Cable v. Wireless plc v. Muscat [2006] ICR 975, the question whether a claimant in an unfair dismissal case is or is not an employee within the meaning of the 1996 Act is increasingly litigated before employment tribunals in unfair dismissal cases, particularly those brought by workers on the books of employment agencies. This is not surprising in view of recent developments: the length of the qualifying period for protection has been reduced to 1 year making it possible for more “temporary workers” to qualify for protection; the maximum award of compensation for unfair dismissal has been substantially increased making it more worthwhile for claims to be brought and providing employers with an additional reason for resisting claims; and, most important of all, there has been an explosion of numbers in the workforce (estimated at 1.3m) engaged to work under arrangements with employment agencies. I understand that, pending guidance from this court on this appeal, proceedings in the tribunals concerning the disputed legal status of agency workers have been put on hold.
Of course, the correct legal question is not whether the claimant was “an agency worker” (whether working for an employment agency or for an end user under an employment agency agreement) but whether the claimant was employed by the respondent end user under a contract of employment. The two types of contract-agency agreement and contract of employment-are not necessarily mutually exclusive. It is legally possible for a worker to have one kind of contract with an employment agency and another kind of contract with the end user to whom he renders services. This is an exercise in legal classification. It requires the fact-finding tribunal to examine and assess carefully all the relevant evidence placed before it by the parties in the particular case for the purpose of determining whether the claimant fits the description of an “employee”, as defined in the 1996 Act.
In the absence of an express contract of employment, which may be written or oral, the ET is faced with the question whether it is necessary to imply a contract of employment between the claimant and the respondent. It is not always possible to predict with certainty how this question will be answered by the tribunal.
The distinction between workers who are employees and those who are not is crucial for the determination of statutory rights, principally the right not to be unfairly dismissed. The legal problem confronting the tribunals and courts is to identify and apply to the facts of each case clear, comprehensible and correct criteria for determining who is an employee and who is not. This is the only way to achieve the consistency necessary for the fair administration of the law. It is, however, unrealistic to expect perfect predictability. The very nature of the judgment that has to be made allows for a degree of latitude without falling into legal error. Sometimes the tribunal has to reach a judgment on unsatisfactory and incomplete evidence of the facts relevant to the legal analysis of the relationships between the worker, the employment agency and the end user of the worker's services.
On appeals the EAT and this court must also aim for consistency in applying the statutory requirement that an appeal only lies on a question of law. Appellate bodies must not interfere with a decision of an ET that a worker is or is not an employee simply on the ground that it would not have decided the point that way. An error of law must be identified in the decision of the ET challenged in the EAT or in this court.
Background facts
The ET considered the case on the basis that there was no dispute about the relevant facts. It was agreed by the parties that the Tribunal did not need to hear live evidence. Accordingly the ET read the witness statements and an agreed bundle of documents. As Elias J observed in the EAT, there may in fact have been more disagreement about the facts than the representatives appreciated. With the benefit of hindsight it might have been preferable for certain aspects of the witness statements to have been explored in more depth in oral evidence.
In 1997 Ms James began to work on a full time basis for the Council providing support work on behalf of the Council's Asylum Seekers Team. She helped at a hostel which provided semi-independent accommodation for unaccompanied under-18 year old asylum seekers. She said that she was placed on a permanent rota to provide continuous 24 hour staff cover at the hostel and that she was a permanent, as distinct from part-time, member of staff. Later the same year she ceased working for the Council and spent time in St Lucia.
On 21 September 2001 Ms James began an engagement with the Council through the Greenwich Social and Care Staff Agency (Greenwich Nursing Agency), an employment agency which provided her services to the Council. According to the Council's revised Code of Practice on the Recruitment and Selection of Employees (paragraph 26) it did not, as a general principle, use the services of employment agencies to fill permanent or temporary vacancies because of the costs involved and the inability to control either the agencies' recruiting practices or the terms of employment they offer their staff, though occasionally the needs of the service and/or lack of suitable potential employees might result in a particular service area need to use agency staff.
The Council conceded that, while she was undertaking work for the Council as a Housing Support Worker, she was subjected to a degree of control consistent with a contract of employment. Ms James explained in her evidence that the Council, not the employment agency, arranged all her instructions, orders and her working conditions, provided the materials used in her work and organised the procedures followed by her. She wore a staff badge bearing the Greenwich Council logo with “Social Services” written under her name. But, the Council contended, there was an absence of that mutuality of obligations which is required to found a contract of employment between her and the Council.
In 2003 Ms James changed agencies. From 28 September 2003 a new agency assumed responsibility for providing her services to the Council. On 28 April 2004 she signed a “Temporary Worker Agreement” with an employment agency called BS Project Services Limited (B.S. Social Care), which paid her a better hourly wage. There was also an agreement between the new agency and the Council under which the agency received from the Council a sum to cover the worker's pay, its expenses in making the arrangements for the supply of “Temporaries to carry out Assignments” and the...
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