Mingeley v Pennock and Ivory, t/a Amber Cars

(Approved by the Court)

Monday, 9 February 2004

I will ask Lord Justice Maurice Kay to give the first judgment.

John Mingeley is a private hire taxi driver in Leeds. For about four years prior to 8 November 2001 he had a contract with Mr Pennock and Mr Ivory, proprietors of a business known as Amber Cars. Upon the termination of that contract Mr Mingeley commenced proceedings in the Employment Tribunal alleging that he had been the subject of unlawful discrimination on the grounds of his race. He is of black African racial origin. The response of Amber Cars to the application in the Tribunal was to contend that the Tribunal lacked jurisdiction because the relationship between Mr Mingeley and the firm was not one of "employment" within the meaning of section 78 of the Race Relations Act 1976. Section 78(1) of the 1976 Act defines employment as:

"Employment under a contract of service or of apprenticeship or a contract personally to execute any work or labour."

It has never been suggested that the relationship between Mr Mingeley and Amber Cars was pursuant to a contract of service or apprenticeship. It is his case that the relationship was pursuant to a contract personally to execute any work or labour. That issue, which goes to jurisdiction in the circumstances of this case, was determined as a preliminary issue by the Employment Tribunal. It decided that the contract between Mr Mingeley and Amber Cars was not one personally to execute any work or labour. Mr Mingeley appealed to the Employment Appeal Tribunal and in a judgment delivered on 9 June 2003 the Employment Appeal Tribunal, with His Honour Judge Peter Clark presiding, came to the same conclusion as had the Employment Tribunal. On 29 August 2003 Kennedy and Peter Gibson LJJ granted Mr Mingeley permission to appeal to this court. Peter Gibson LJ observed that "the issues raised are of some general importance."

The contractual relationship between the parties was never the subject of a written agreement. It was a type of arrangement which is commonly found in the private hire industry. Mr Mingeley owned the vehicle and he was required to obtain the relevant licence from Leeds City Council showing the name of Amber Cars as the vehicle operator. He was also required to have a standard driving licence and evidence of compulsory third-party insurance. Amber Cars made available to him initially a radio and later a computer system which, according to the finding of the Employment Tribunal, allocated calls to drivers from Amber Cars' customers. In return Mr Mingeley was obliged to pay Amber Cars £75 per week. Other aspects of the arrangements are apparent from the following findings of the Employment Tribunal (in which Mr Mingeley is referred to as "the Applicant" and Amber Cars as "the Respondent"):

"He expressed a wish to work on the Respondent's nightshift, that is from 5.00pm until 1.00am Sunday/Thursday and from 5.00pm until 3.00am Friday/Saturday. It was, however, a matter entirely for the Applicant as to whether he actually worked those hours and the Respondent did not operate any monitoring system, either via its radio/computer system or otherwise,whereby it checked the actual times that the drivers, including the Applicant, made themselves available for allocation to particular customers. The Applicant was free to work seven days per week if he wished or he could work any lesser number of days. That was entirely a decision for him… If the Applicant failed to pay £75 in any given week, then the system was disabled. The Applicant was not required to and did not give notice to the [Respondent] if he took a period of time off work for holiday or if there was any illness. If he chose not to work on any particular day, for whatever reason, he simply did not use his vehicle and did not notify the [Respondent] either that he was or was not available. The Respondent had no concern either way as to that. Overall, the Respondent's only concern was that a sufficient number of its substantial fleet of drivers, some 225 in all, were available for allocation of calls at any particular time… The Applicant did not make any further payment to the Respondent in respect of the fares that he collected from customers allocated to him. The Respondent had no interest in the amount that the Applicant so collected. Equally, the Applicant had no interest in the number of customers who sought the services of the Respondent and its various drivers or, save as to the matters which form the substance of the Applicant's substantive complaint, no interest in the allocation of calls to particular drivers. The Applicant was not entitled to allow any other person to drive his vehicle during any part of the working week unless a further sum of £75 was paid by that person (or the Applicant) to the Respondent… The Applicant was required to wear the Respondent's uniform… The Respondent enforced that uniform code. The Respondent similarly enforced a scale of charges. Those charges were set by the Respondent and the Applicant was not at liberty to amend them. The Respondent did… seek to impose a proper code of conduct on its drivers and, if there was any complaint from a member of the public, that was investigated in some form of hearing and the Respondent had power to order a refund of the fare to the customer."

The decision of the Employment Tribunal

The Employment Tribunal identified two issues and resolved them both in favour of Amber Cars. In relation to both issues it based its decision on Mirror Group Newspapers Ltd v Gunning [1986] IRLR 27. The first issue is dealt with in the following passage in the decision of the Employment Tribunal at paragraph 13:

'… what falls to be determined, looking at the contract as a whole, is firstly whether there is some obligation by one contracting party personally to execute any work or labour… We note the word 'obligation'. We are concerned as to whether there is some obligation by one party personally to execute work or labour … we cannot accept that there was any obligation on the part of the Applicant to execute any work or labour. The Applicant was entirely free, whatever he actually did, to work whenever it suited him or not to work whenever it suited him. That was the case whether or not he paid £75.00 per week to the Respondent. We accept that, in the real world, if the Applicant did make that payment, he would make himself available to work, both so that he could recoup the fee and so that he could earn a living. The test… is not the commercial reality but the strict contractual position. It is inconsistent with an obligation to execute work or labour that a party is free to work or not work as he wishes, free to take holidays as and when he wishes without notification to any other party, free to decide that he is sick on any particular day without notification and free to work whatever hours he wishes on any particular day that he does work, without sanction of any sort on the part of the 'employer'."

The Tribunal then turned to the second issue, identifying and resolving it in this passage at paragraph 15:

"As Gunning indicates, the Tribunal is required to determine whether that, ie, the obligation, if any, by one contracting party personally to execute any work or labour, is the dominant purpose of the contract… In our view, that is not the case. The dominant purpose of the contract between the parties was the efficient provision of a private hire service to customers of the Respondent. The parties made the contractual arrangements between them, to their mutual benefit, so that the Applicant could earn his living from the fares that he received from third parties and the Respondent could run its business from the profit on the rentals it received from its various drivers. It would be stretching the reality of that position far beyond that which this Tribunal can accept to say that the dominant purpose was the execution of personal work or labour by the Applicant. That was an incidental feature of the overall arrangement but some substantial distance from the dominant purpose."

The Employment Tribunal concluded with this comment:

"It is by no means clear whether it was the original intention of Parliament that persons in this position should be excluded from the provisions of the 1978 Act. Insofar as it is a matter for us, we would welcome clarification by the Employment Appeal Tribunal on this issue."

The decision of the Employment Appeal Tribunal

The Employment Appeal Tribunal identified and addressed the two issues which had arisen in the Employment Tribunal but considered them in the reverse order. First, it found in favour of Amber Cars on the dominant purpose issue in the light of Gunning. Secondly, the Employment Appeal Tribunal concluded at paragraph 32:

'… there must be some mutuality of obligation, the employer to provide work and the employee to do the work when offered, where the extended definition is relied upon…

33. On the facts of the present case there was, as the Employment Tribunal found, no requirement at all for the Applicant to accept any of the...