Appeal No. UKEAT/0462/07/DA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 21 February 2008

Before
HIS HONOUR JUDGE McMULLEN QC
(SITTING ALONE)

MS S S VIDAL-HALL	APPELLANT

(1) MR K HAWLEY
(2) MS J HENDRICK
(3) MINISTRY OF JUSTICE (SUED AS HM PRISON SERVICE) 	RESPONDENTS

Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING – ALL PARTIES

	APPEARANCES

For the Appellant	MR CHRISTOPHER PITTO
(Representative)
SWERC
Room 18
20 Portland Villas
Plymouth
Devon 
PL4 8AA	
For the Respondents	MR PETER SAVILL
(of Counsel)
Instructed by:
The Treasury Solicitors (Employment Law Team)
One Kemble Street
London 
WC2B 4TS	

SUMMARY
Jurisdictional points – Agency relationships
Sex discrimination – Contract workers
The Claimant was employed by CSV to work at a prison. The prison had an arrangement, but not a contract, with CSV and so the prison could not be liable to the Claimant as a contract worker under Sex Discrimination Act 1975 s9, nor under s41 for the acts of prison officers. It was not necessary to imply a contract of employment with the prison.

HIS HONOUR JUDGE MCMULLEN QC

1.	This case raises the triangular relationship between an employer, an end-user and an employee in the unusual context of a charity providing services to a prison.

2.	At the outset I will change the title of these proceedings so that HMP Channings Wood is dismissed from the proceedings.  The Deputy Governor and Governor as named are to be retained and the Ministry of Justice, sued as HM Prison Service will remain.  The approach reflects the ruling by Sedley LJ in Grady v the Prison Service [2003] ICR 753 CA indicating that proceedings should not be maintained against the Prison Service but against the government department, now the Ministry of Justice.

3.	It is a preliminary hearing where I felt it important to have the Respondents present through Counsel.

Introduction
4.	It is an appeal by the Claimant in those proceedings against the PHR judgment of Employment Judge Toomer, sitting alone at Exeter on 1 November 2006, registered with reasons on 23 November 2006.  The Claimant represented himself and is represented today by Mr Christopher Pitto of the South Western Employment Rights Centre; the Respondent by Mr Peter Savill, of Counsel.

5.	The Claimant made claims of breach of contract and sex discrimination against four Respondents and the PHR was to determine the Claimant’s employment status so she had standing to bring either of the claims.

6.	The Employment Judge decided she could bring claims under neither the contract jurisdiction of the Employment Tribunal nor under the Sex Discrimination Act 1975.  There is no dispute as to his direction on law:

“2.  I remind myself that in the case of a claim of breach of contract under s.3(2) the Employment Tribunal Act 1996 and Article Employment Tribunals Extension of Jurisdiction (England and Wales) Order 1994 the Claimant can only proceed if the claim is of breach of a contract of employment or a contract connected with employment.  A contract of employment is defined in s.42 of the Act as a contract of service or apprenticeship, whether express or implied, and if (if it is express) whether oral or in writing.  Under the Sex Discrimination Act 1975 the Claimant’s claim can proceed if she is an employee within the meaning of s.18(2) of the Act and that is defined as being employed under a contract of service or apprenticeship or a contract personally to execute any work or labour.  Alternatively the Claimant may pursue her claim … under s.9 of the same Act.  That provides for protection of a person (the principal) who supplies her to do work under a contract made between the principal and the end user.  Those are the legal tests which I have to apply.”

7.	The essential issues can be reduced to three: (1) is the agreement between the prison and Community Service Volunteers (CSV), a contract pursuant to section 9 of the Sex Discrimination Act 1975 so as to protect the Claimant as a contract worker; (2) can the officers of the prison made liable in proceedings by virtue of section 41 of the Sex Discrimination Act, CSV having vicarious responsibility for them; and (3) is it necessary to imply a contract of employment between the Claimant and the prison?

8.	A fourth issue, in relation to what we called the missing contracts, has now sensibly been withdrawn by Mr Pitto. I will take the findings and arguments in sequence.

(1) Contract worker: section 9
9.	There is an agreement between the governor of HMP Channings Wood and CSV Media.  Broadly speaking, this voluntary association, a charity, provides services to the prison for the advancement of the education and rehabilitation of the prisoners.  It performs a valuable service to the prison for the prison is able to discharge its responsibilities to its prisoners by using the services of CSV and, in a wider sense, CSV provides a service for us all so that offenders are usefully engaged.

10.	The Claimant was initially a volunteer but became employed by CSV and was unarguably subject to a contract of employment as the unappealed finding by the Employment Judge makes clear.

11.	The relationship between CSV and the prison is contained in the service delivery agreement which, with one exception, looks like a contractual document.  It is signed by the governor and by the regional manager of CSV.  It provides for services to be offered and accepted by the prison relating to training and the provision of certain pieces of hardware.  The prison provides some hardware too. Whatever each clause looks like, it has to be prefaced by the opening words which are these:
“1. INTRODUCTION:
1.1 This agreement is not intended to be a legally binding document.  However, it is an expression of intent and in signing it, each party acknowledges it will use its best endeavours to implement their particular responsibilities.”

12.	The judge held this clause was fatal to there being a contract.  It was not suggested before the judge that this was a sham nor has it been maintained before me, for there is no evidence as to that.  Thus the sole task for me is to construe this document with a view to the submission that it is a contract.  That is because, as the judge made clear, for the purposes of section 9, (rights of contract workers) there must be a contract between CSV and the prison.  In my judgment, there is only one construction which is the one reached by the judge.  The documents are not intended to be legally binding.  The duty of the court is to give effect to the intention of the parties.  That was their expressed intent.  No other intention is to be found.  The parties themselves regard this document, not as a contract, but simply as an expression of intent.

13.	The parties acknowledge that the highest that it can be put is that they will each use their best endeavours to put into place the responsibilities adopted by each under the agreement.  Best endeavours is not the language of contractual obligation.

14.	As I said in Bruce v Dial-House Chester UKEAT 0655/04, the construction of a document making arrangements of a voluntary nature requires an insight into the language used. At paragraph 28 I cited from the judgment of Rimer J and members in Sheffield CAB v Grayson when looking at the nature of the responsibility between a voluntary organisation and a person who is, to put it neutrally, providing services.

15.	Mr Savill is correct.  The language of clause 1.1 makes clear what the parties’ intention was.  The joint intention did not have contractual effect although no doubt it carried with it strong responsibilities which both parties were committed to discharge.

16.	Since the Notice of Appeal, there have been two strong judgments which are of assistance.  The first is James v Greenwich Borough Council [2008] EWCA Civ 35, a judgment of Mummery LJ with whom Thomas and Lloyd LJJ agreed.  This represents the latest stage in a series of protracted litigation on the difficult and practical problem of agency workers.  See the list of cases cited by Mummery LJ at paragraph 4.

17.	This judgment clears up a number of issues. One single result is that, for the most part, issues relating to the status of atypical workers or workers engaged in a triangular relationship at work are to be decided by the employment judge and are not susceptible to appeal.

18.	The second is a judgment handed down by Elias P this morning in M&P Steelcraft Limited UKEAT 0536, and HM Prison Service v Ellis UKEAT 0536.  In those two cases, the President asserted the contractual principle.  He said this:

“The employer submits that it is a pre-requisite of a contract of employment being in place that  there is a contract at all. That is not possible where there is no intention to create legal relations. Whether such an intention exists is a matter to be judged objectively and where, as here, there is an express term dealing with the question of intention, it is simply a matter of construing that clause.  It is the duty of the court to give proper effect to the terms agreed between the parties, whatever the reason for its introduction: see Rose and Frank v Compton [1925] AC 445,451 per Lord Phillimore.”

19.	In our case, the employment judge has been faithful to the task set for him which was to find the intention of the parties and has reached the correct conclusion as a matter of law.  That then defeats the Claimant’s case under the Sex Discrimination Act.  It is simply not possible to accede to Mr Pitto’s submission that clause 1.1 could be severed.  To do so would destroy the joint intention of the parties to keep this as a non-contractual matter.  All of the obligations which look as though they are capable of contractual enforcement are, on analysis, made subject to the obligation to use best endeavours which is not a contractual obligation.  So, if the clause were to be severed, the nature of the agreement would change radically.  It is clear to me that the clause cannot be severed and the agreement retain its meaning.

(2) Auxiliary liability: section 41
20.	I then turn to the point on section 41 of the Sex Discrimination Act.  This, of course, makes employees liable for acts of discrimination of their employees.  The issue here is whether CSV should be brought in.  In my judgment, the difficulty in this case stems from what Mr Pitto has frankly told me was misguided advice given by solicitors to the Claimant that proceedings should be weighed against the four initial Respondents in the case and the claim should not be made against CSV.

21.	While he said that, it at once became apparent that this was a salvage operation to rescue a claim against the right people from the wreckage of suing the wrong people.  That is not a proper way in which to conduct litigation.  The Claimant faces a number of difficulties now.  She may have claims against CSV, but the first thing she is going to be asked, either in further information or at a PHR, is how she squares that with her assertion that she raised no grievance with CSV because she has no grievance to raise with it.  She also would face difficulties, as Mr Savill pointed out at the time, making an application late and relying on the discretion of the Employment Tribunal.

22.	She would, it seems to me, have to deal with a practically insurmountable difficulty which is that she has not raised a grievance against CSV and, therefore, would be barred by the 2002 Act regime from raising it now and, as a matter of substance, she herself disavows a grievance against CSV. In my judgment, no liability under section 41 can be raised here. 

(3) Implied contract
23.	The third point, which is whether it is necessary to imply a contract of employment, is misconceived.  When this doctrine evolved through cases such as Cable and Wireless Plc v Muscat [2006] ICR 975 (CA), the necessity arose so as to give the person undoubtedly working and being paid some anchor for the relationship.  In this case, there is no such necessity.  The Claimant was employed by CSV.  It is not necessary for her to be employed also by the prison.  

24.	Anyway, the employment judge was alert to the possibility of an implied contract and rejected it for reasons which he has given in full.  Not only was it not necessary to imply a contract, but the relationship between the Claimant and prison was in no sense one of employment.  The judge gave, in paragraph 12, a catalogue of criteria necessary for an employment relationship but not fulfilled in the relationship between the Claimant and prison.  So, even if it were necessary to imply a contract, this would not be a contract of employment.

25.	In those circumstances, the three grounds are dismissed.  I would very much like to thank Mr Pitto for coming today to argue them and Mr Savill for his concise submissions which I uphold in full.