Appeal No.	 EAT/0301/01

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 27 March 2001

Before
MR RECORDER LANGSTAFF QC
MS N AMIN
MISS D WHITTINGHAM

LONDON BOROUGH OF MERTON	APPELLANT

MRS A M THOMAS	RESPONDENT

Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING

	APPEARANCES

For the Appellant	MISS MARINA WHEELER
(of Counsel)
London Borough of Merton
Legal Services Dept
Civic Centre
London Road
Morden
Surrey SM4 5DX	

MR RECORDER LANGSTAFF QC

1	This appeal comes before us by way of Preliminary Hearing from a decision of the Employment Tribunal at London South promulgated on 24 January 2001.  That decision itself was in relation to a preliminary point.  The question at issue was whether the Employment Tribunal had jurisdiction to consider the Respondent’s complaints.

2	The Respondent, whom I shall call the employee, had been a Playleader since 1991 in a playgroup which was promoted, indeed, arranged by the Appellant.  She was appointed as Senior Playleader in 1997.  The Employment Tribunal had to ask themselves the question, whether she was an employee of the Respondents and if so whether she had been continuously employed by the Respondents for a period of not less than 13 weeks ending on 23 May 2000, when she made her application to the Tribunal.  In the alternative they considered whether she was or was not a worker, but that question does not concern this appeal.  The Tribunal concluded unanimously that she was an employee and had been continuously employed for the requisite period.

3	We are going to take a slightly unusual course in dealing with this appeal.  We propose to give leave, but on one very limited basis, because in the absence of certain information, we do not consider, on the material before us, that the appeal discloses any reasonably arguable point of law.  Accordingly we shall give our reasons in much greater detail than is conventional in a Preliminary Hearing at which leave is granted.

4	Two central points are taken by Ms Wheeler who appears for the Appellant.  They are first, that there was no mutuality of obligation as between the applicant and the employee, such that there could be no global contract of employment whatever the situation might be when the employee worked at the Playgroup.  Secondly, she contends that when the employee worked at the Playgroup, she did so under a contract for services and not as an employee.

5	The Employment Tribunal reached its conclusion by two steps.  At paragraph 11 it asked the question, was the employee under a contract of employment when she worked in the Playgroup?  Having then determined that she was, they had to ask, whether, when she was not performing her duties, she had the status of an employee.  They express it in these terms:

“To put it another way, is she employed by the day, or by the week, or by the term, or for some other period?  Here again, it seems to us that the Respondents face insuperable difficulties.  In our view it would offend common sense to regard the Applicant as being employed under a series of short-term contracts.  That would not reflect the reality of her dealings with the Respondents over many years. Moreover, there is no evidential basis on which we could properly determine the moment when one contract came to an end and another began.”

they went on, and added towards the end of that same paragraph:

“It seems to us that, certainly by 1997 (when the Respondents appointed the Applicant as their Senior Playleader), it is beyond question that the parties had undertaken, and fully recognised, mutual obligations on the one hand to provide work and on the other to perform duties. 

6	We shall deal with the questions in the same order as did the Employment Tribunal.  The question whether an individual is an employee or works under some other form of contract is essentially one of fact.  That has been recognised at Court of Appeal level, not least in O’Kelly v Trusthouse Forte plc (1983) IRLR 369, but also by the Privy Counsel in Lee Ting Sang.  

7	Accordingly the decision of a Court of First Instance or Tribunal must be accepted unless it appears that some wrong legal test has been applied or the decision is perverse.  Ms Warner submits that the decision here was perverse.  She points out that the playgroup staff, collectively, could arrange a substitute if one of the regular workers did not wish to or could not work.  That the playgroup staff would ask parents to stand in for regular workers.  That the Respondent was free to select a replacement of her choice.  Therefore, she says, this was not personal service.  These submissions however, in our view, go to the question of whether there was or was not a global contract, as opposed to whether when she worked there was an employment relationship.  She submits in her skeleton argument that control is a matter of importance and that the playgroup had autonomy so that the Appellants did not have, nor could the Employment Tribunal have thought that they could have had, sufficient control.  

8	The Tribunal set out their reasons for concluding that she worked as an employee in paragraph 11.  They noted there, the supervision of the Respondents and they had earlier noted in paragraph 8, that there was a degree of control and supervision of the playgroup by the Appellant – see sub paragraph 10.  There was ample basis, in our view, for them to do so not least in the witness statements, which have been supplied.  We note in particular the last paragraph of the employee’s statement.  We note also paragraph 9 of the statement of Alison Craigwell.  There being some evidence that there was here control, it seems to us that the Employment Tribunal were entitled to reach the decision they did and that the arguments to the contrary are issues of fact which raise no issue of law.

9	The next question is a little more difficult and it is as to whether the Tribunal were entitled to come to the conclusion that they did in paragraph 12, that there was some form of global or umbrella arrangement.  Once one accepts that the employee was not in business on her own account whenever she actually did work for the Respondent and indeed, it is fair to say, that if the evidence that she was an employee is regarded as thin, any evidence to suggest that she was in business on her own account and was an independent contractor is, in our view, thinner, the question is whether the Tribunal were justified in taking the view that there was an overall arrangement amounting to a contract which had sufficient mutuality of obligation in it.

10	The basis from which the Employment Tribunal seem to have found there was, was the second last sentence of paragraph 12 which we have already quoted.  No doubt the Tribunal had in mind the speech of Lord Hoffman in Carmichael v National Power plc (2000) IRLR 44 in which he emphasised the dynamic nature of a contract of employment which is entered into without any full and comprehensive record in writing.  He said that in that case:

“I think that it was open to the Industrial Tribunal to find as a fact that the parties did not intend the letters to be the sole record of their agreement but intended that it should be contained partly in the letters, partly in oral exchanges at the interviews or elsewhere and partly left to evolve by conduct as time went on.  This would not be untypical of agreements by which people are engaged to do work, whether as employees or otherwise.  Although the Tribunal did not expressly state this to be their finding their whole approach to the evidence was consistent only with their having come to such a conclusion.  In my view they were entitled to do so.”

He recognised there, that the relationship and its terms may evolve by conduct.  There is in that a reflection of the approach which was taken in the cases of Nethermere (St Neots) Ltd v Tavernar (1984) IRLR 240 and Airfix v Cope.

11	Miss Wheeler suggests that there is a consistent line of jurisprudence, consisting of O’Kelly, McLeod and Hellyer Brothers and Wilson v Boston Deep Sea Fisheries Ltd which shows that where there is a succession of individual pieces of work by someone who may well be an employee, one cannot simply construe a global contract from that fact alone.  She contrasts McLeod and Nethermere and points to McLeod being the later of the two authorities at Court of Appeal level.  Nonetheless it is not suggested that Nethermere has ever specifically been overruled or disapproved in its suggestion that it was open to an Employment Tribunal taking its own view of the facts, to find that, in any given case there was a global contract as well as a succession of incidents or work and that the fact that there was such a succession of days of work might indicate the existence of such a contract.  

12	Accordingly we would, but for one point, have concluded that the Employment Tribunal were here entitled to find mutuality of obligation.  That one point is that, we are told by Ms Wheeler, that in, what we think must be cross examination, the employee said, or accepted, that she was under no obligation to work.  The witness statement which we have is capable of being read to the contrary effect.  Such is the clarity with which Ms Wheeler recollects the effect of the evidence given that we would be uneasy in accepting the finding of fact of the Employment Tribunal that there was here an obligation to perform work, without putting that in the context of the evidence as a whole, before the Tribunal.  We think it is possible that the Chairman’s notes of evidence may, if they are obtained, bear out what Ms Wheeler recollects, to such an extent that they might affect the view this Tribunal could reasonably take of the integrity of the finding of fact of the Tribunal.  This is not necessarily the case.  It would have to be considered in the light of the evidence, but we do think this is one of those cases in which we cannot properly determine this appeal against the Appellant without first seeing those notes.  

13	Accordingly we direct that the Chairman be asked to provide notes of the evidence limited to this particular point.  We think the notes of evidence, cross examination, I suspect and re-examination of the employee are what is required.  When those notes are obtained we expect that they will be considered within this Tribunal with a view to determining whether the matter should be listed for a further Preliminary Hearing or whether the case should then go forward to determine at a Full Hearing whether or not there was sufficient evidence upon which the Employment Tribunal were entitled to conclude that there was mutuality of obligation.  

14	That is, we think, the only basis upon which this matter should be considered further by this Tribunal.  We do not see, as we have indicated, any reasonably arguable point in the other matters which have been put before us today.  We think that, if the matter is to proceed to a Full Hearing at which the employee would be represented, that it should be listed, bearing in mind the shortness of the point, for 1½ hours, category C.  Skeleton arguments to be provided together with any authorities to be relied on at least 10 days in advance.