Stringfellow Restaurants Ltd v Nadine Quashie
| Jurisdiction | England & Wales |
| Judge | Lord Justice Elias,Lord Justice Pitchford,Lord Justice Ward |
| Judgment Date | 21 December 2012 |
| Neutral Citation | [2012] EWCA Civ 1735 |
| Docket Number | Case No: A2/2012/1169/EATRF |
| Court | Court of Appeal (Civil Division) |
| Date | 21 December 2012 |
[2012] EWCA Civ 1735
Lord Justice Ward
Lord Justice Elias
and
Lord Justice Pitchford
Case No: A2/2012/1169/EATRF
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
HHJ McMULLEN QC sitting alone
UKEAT/0289/11/RN
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Thomas Linden QC (instructed by Messrs Davenport Lyons) for the Appellant
Mr John Hendy QC and Ms Catherine Rayner (instructed by Bindmans LLP) for the Respondent
Hearing Date: 13 November 2012
Nadine Quashie ("the claimant") worked intermittently for a period of some 18 months as a lap dancer (described in the contractual documents rather more primly as a table-side dancer) at the appellant's two clubs in London. One was Stringfellows and the other was Angels. On 9 December 2008 she was told that she would no longer be permitted to work for the company as she was believed to have become involved with drugs on the premises.
She brought an unfair dismissal claim. There was a preliminary issue as to whether she was an employee as defined by section 230 of the Employment Rights Act 1996 and, if so, whether she had the necessary qualifying period of a year's continuous employment to entitle her to bring that claim.
The Employment Tribunal concluded that she was not an employee and in any event did not have the requisite period of continuous employment. The Employment Appeal Tribunal (HH Judge McMullen QC sitting alone) upheld the claimant's appeal. He held that the only proper inference from the facts was that she was an employee, and he further concluded that she had the necessary continuity of employment. He remitted the matter to the Employment Tribunal. The appellant now appeals against each of those findings and seeks to restore the decision of the Employment Tribunal. However, if the claimant is not an employee, the issue of continuity does not strictly arise.
The law.
The definition of "employee" in the Employment Rights Act, section 230(1), is as follows:-
"'Employee' means 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, section 230(2) as:
'a contract of service or apprenticeship whether express or implied and (if it is express) whether oral or in writing."
There is voluminous case law seeking to encapsulate the essence of the contract of employment and to distinguish it from other forms of working relationship. The distinction is important because some rights, including the right to claim unfair dismissal, are conferred on employees whereas others are conferred upon workers, a more widely defined category. All employees are workers but not all workers are employees.
Various tests for identifying when a contract of employment exists have been proposed in the cases, although none has won universal approval. These tests include, to use the shorthand descriptions, the following: the control test, which stems from the decision of Bramwell LJ in Yewens v Noakes (1880) 6 QBD 530 (which focuses on the nature and degree of control exercisable by the employer); the business integration test, first suggested by Denning LJ in Stevenson, Jordan and Harrison v MacDonald and Evans [1952] 1 TLR 101 (whether the work provided is integral to the business or merely accessory to it); the business or economic reality test, first propounded by the US Supreme Court in US v Silk 331 US 704 (1946) (whether in reality the worker is in business on his or her own account, as an entrepreneur); and the multiple or multi-factorial test, reflected in the judgment of McKenna J in Ready Mixed Concrete (South East Limited) v Minister of Pensions and National Insurance [1968] 1 QB 497 (involving an analysis of many different features of the relationship).
Employment relationships come in such diverse forms that, whilst each of these tests may in any particular case cast some light on the problem of classification, none provides a ready universal answer. However, the test most frequently adopted, which has been approved on numerous occasions and was the focus of the Employment Tribunal's analysis in this case, is the approach adumbrated by McKenna J in the Ready Mixed Concrete case. He succinctly summarised the essential elements of the contract of employment as follows (p.515):
"A contract of service exists if these three conditions are fulfilled.
(i) The servant agrees that, in consideration of a wage or other remuneration, he will provide his own work and skill in the performance of some service for his master.
(ii) He agrees, expressly or impliedly, that in the performance of that service he will be subject to the other's control in a sufficient degree to make that other master.
(iii) The other provisions of the contract are consistent with its being a contract of service."
He later added (p.516–517):
"An obligation to do work subject to the other party's control is a necessary, though not always a sufficient, condition of a contract of service. If the provisions of the contract as a whole are inconsistent with its being a contract of service, it will be some other kind of contract, and the person doing the work will not be a servant. The judge's task is to classify the contract (a task like that of distinguishing a contract of sale from one of work and labour). He may, in performing it, take into account other matters besides control."
This approach recognises, therefore, that the issue is not simply one of control and that the nature of the contractual provisions may be inconsistent with the contract being a contract of service. When applying this test, the court or tribunal is required to examine and assess all the relevant factors which make up the employment relationship in order to determine the nature of the contract.
The role of an appellate court.
Where, as in this case, the contract is to be gleaned from a mixture of written documents and working practices, an appellate court should not readily interfere with the determination of the first instance court. Absent some misdirection from the tribunal, it can only do so if no reasonable tribunal, properly directing itself, could have reached the decision it did. This firmly established principle has been reiterated on numerous occasions. In Clark v Oxfordshire Health Authority [1998] IRLR 125 Sir Christopher Slade summarised it as follows:
"Principles governing appeals from an industrial tribunal
35. At first impression one might suppose that the question whether one person is 'employed' by another under a 'contract of employment' within the meaning of s.153(1) of the 1978 Act would in any case be regarded by the court as a bare question of law, since it raises the question whether there exists between the two parties the legal relationship of employer and employee. And indeed exceptionally, if the existence or otherwise of the relationship is dependent solely upon the true construction of a written document or documents, the question is treated by the court as being one of law, so that an appellate tribunal or court is free to reach its own conclusion on the question without any restriction arising from the decision of the tribunal below ( Davies v Presbyterian Church of Wales [1986] IRLR 194).
36. But in the more ordinary case, where the determination of the question depends not only on reference to written documents but also on an investigation and evaluation of the factual circumstances in which the work is performed, a quite different situation arises: see Lee Ting Sang v Chung Chi-Keung [1990] IRLR 236 at p.240; Clifford v Union of Democratic Mineworkers [1991] IRLR 518 at p.520 per Mann LJ). In such a case, as these two authorities show, the responsibility of determining and evaluating all the relevant admissible evidence (both documentary and otherwise) is that of the tribunal in the first instance; an appellate tribunal is entitled to interfere with the decision of that tribunal, that a contract of employment does or does not exist, only if it is satisfied that in its opinion no reasonable tribunal, properly directing itself on the relevant question of law, could have reached the conclusion under appeal, within the principles of Edwards v Bairstow [1956] AC 14. An illuminating summary of the legal position in this context is also to be found in the judgment of Sir John Donaldson in O'Kelly v Trusthouse plc [1983] IRLR 369 at pp. 381–393."
The EAT cited this passage in its judgment.
Mutuality of obligation.
An issue that arises in this case is the significance of mutuality of obligation in the employment contract. Every bilateral contract requires mutual obligations; they constitute the consideration from each party necessary to create the contract. Typically an employment contract will be for a fixed or indefinite duration, and one of the obligations will be to keep the relationship in place until it is lawfully severed, usually by termination on notice. But there are some circumstances where a worker works intermittently for the employer, perhaps as and when work is available. There is in principle no reason why the worker should not be employed under a contract of employment for each separate engagement, even if of short duration, as a number of authorities have confirmed: see the decisions of the Court of Appeal in Meechan v Secretary of State for Employment [1997] IRLR 353 and Cornwall County Council v Prater [2006] IRLR 362.
Where the employee working on discrete separate engagements...
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