Appeal No. UKEAT/0051/13/RN

EMPLOYMENT APPEAL TRIBUNAL
FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8JX

		At the Tribunal
		On 19 September 2013

Before
HIS HONOUR JUDGE McMULLEN QC

(SITTING ALONE)

G4S SECURE SOLUTIONS (UK) LTD	APPELLANT

MR C ALPHONSO	RESPONDENT

Transcript of Proceedings

JUDGMENT

FULL HEARING & APPEAL FROM REGISTRAR’S ORDER

	APPEARANCES

For the Appellant	MS JENNIFER OWUSU‑AKYAW
(of Counsel)
Instructed by:
G4S Secure Solutions (UK) Ltd
Sutton Park House
15 Carshalton Road
Sutton
Surrey
SM1 4LD	
For the Respondent	MR MICHAEL REED
(Representative)
Free Representation Unit
Ground Floor
60 Gray’s Inn Road
London
WC1X 8LU	

SUMMARY
PRACTICE AND PROCEDURE - Appellate jurisdiction/reasons/Burns-Barke
JURISDICTIONAL POINTS 
Worker, employee or neither
Claim in time and effective date of termination

The Claimant’s appeal against the debarring of him in the appeal was really an application for relief from sanctions.  Having heard the substantive argument in the appeal, the application was granted as the case raised an important point.

The Claimant changed at his request from a contract of employment and was then engaged on a zero hours contract.  The Employment Judge did not make sufficient findings about what the obligations of the parties were under this contract.  The appeal was allowed and remitted to the same judge for a further hearing so that the urgent issue of such contracts could be determined.

HIS HONOUR JUDGE McMULLEN QC

1.	There are two appeals in my list today, which I will deal with consecutively and give a common Judgment.

2.	In the first appeal, G4S Secure Solutions v Alphonso, the single issue is whether the claim of the Claimant was put in within three months of what he says was the date of termination of his employment, and, if so, he would present a claim of unfair dismissal and for unpaid notice.  The second relates to the finding that he was an employee. The claim was heard at a PHR by Employment Judge Ms J Palca, who decided that on the basis of the evidence the Tribunal cannot conclude that it has no jurisdiction to hear the Claimant’s claim and the claim will, therefore, proceed to a hearing.  The Claimant was represented by a colleague; the Respondent by its HR Manager.  Today the Claimant has the advantage to be represented by Mr Michael Reed, of counsel, from FRU and the Respondent by its in‑house counsel, Ms Jennifer Owusu‑Akyaw.

3.	The circumstances in which the substantive issue arises, that is the termination of employment issue, follow some preliminary interim decisions.  On the substantive issue the Respondent contended that the Claimant had changed his status from permanent full-time employee to zero hours. Zero hours, on the admissions made by the Claimant, means no obligation by the Respondent to offer him work if there was none available or indeed at all.  The Respondent would have no claim against the Claimant if he refused to do any work which was offered to him; no mutuality of obligation. 

4.	The judge found as I have set out above, having heard evidence from the Claimant, no live evidence from the Respondent, and a number of documents, which is essentially an email trail.  The issue was to determine the effective date of termination, for the three‑month period for lodging a claim runs from then.  The judge determined that that was 17 May 2012 and so when the claim was presented by the Claimant on 16 August 2012 he was in time.  The Respondent appeals against that on the basis principally that he was not an employee and his employment actually terminated on 14 November in circumstances which I will set out below.  The Respondent, therefore, appeals against the finding in favour of the Claimant.

5.	When it did so, the Claimant failed to put in a Respondent Answer on a number of occasions.  He was let down by himself and by the representation which he had. The Registrar decided that he had not complied with the requirements and he was debarred pursuant to rule 26.  There is an appeal against that.

6.	At the outset of this morning’s list I invited counsel to consider the practical realities of this.  In Ms Owusu’s skeleton for the appeal against the Registrar’s order she alleges there will be prejudice to the Respondent if the Claimant is allowed back into the case and to be represented by Mr Reed, because Mr Reed has produced a careful skeleton argument which will require points to be answered and possibly an adjournment so that that can be done.

7.	I decided that I would hear both counsel in respect of the substantive matter and reserve my decision on the Registrar’s appeal until after that so that I could see whether there was substance in the case.  The Registrar’s reasoning cannot be faulted.  The Claimant was properly debarred, but on an appeal I can look at the matter afresh and there are plainly new matters not before the Registrar upon which I have decided to exercise discretion in favour of the Claimant.

8.	The strict rules in respect of the initiation of an appeal do not apply with the same rigour where a case is already in the system and, effectively, this is an application for relief from sanctions made late by a Respondent.  There is no proper explanation as to why this occurred but given the way G4S views the principle invoked, it is a case that does call for careful treatment and I am most grateful to Mr Reed for having provided that argument.  Ms Owusu realistically did not advance arguments beyond her skeleton argument in respect of the Registrar’s appeal and I have decided that it is in accordance with the overriding objective that the substance of this case be looked at with the assistance of representation by Mr Reed, in accordance with his skeleton argument.  So, formally I allow the appeal against the Claimant being debarred and descend upon the substance.

The facts
9.	The Claimant was employed by this major security company or its predecessor on 1 April 2002 and, in due course, he was deployed on a sensitive contract at the Foreign and Commonwealth Office in central London.  On 13 October 2011 he approached his manager to request a change from permanent employee to zero‑hour contract.  That is the way he put it, as I understand it, for it was in a letter attached to an email which he has not produced to the Tribunal or to me.  What he said subsequently, and it is not disputed, is said to mirror what was said in October, is this:

“[…] Due to unforeseen circumstances in my personal working arranging I wrote to G4S on the 13th of October 2011 to request that my existing employment contract of 48 hours a week be changed to Zero (0) hours with the obvious flexibility that I be contacted from time to time when shifts become available for me to provide cover and earn some money to enable me to meet the payment of some bills.
I had to make the request at the time due to my personal circumstances and I made it clear that I did not want to leave or resign from my job.  This request was positively considered by Paul Bryant.  Mr Bryant sent an email dated 14th October 2011 to MID.SSS.StocktonAdmin stating that ‘they should arrange for the Officers contract to revert to 0 hours, on standard G4S T’s and C’s.  I will ask that this be effective 14th November 2011’.  I was copied into this email directive and a copy is attached.
I was perplexed, very upset, hurt and flabbergasted when without notice I received in the post a P45 document from by G4S Secure Solutions UK Ltd stating that my contract and employment had ended on the 31st of March 2012.  The P45 was dated 15th May 2012 and I received it towards the end of May.
Due to the considerable stress this information had caused me I have become depressed and I have asked myself time and time again what did I do wrong to warrant such unfair treatment.
Please note that since the 14th of November 2011 when My Bryant instructed MIS.SSS.StocktonAdmin that the zero hours contract be put in place I have been invited to work on two occasions and I actually was able to step in and cover one of the two shifts and I was paid for this on the 15th of March 2012.  Copy of the payslip is attached.
Given that I had worked a shift since t was moved to the zero hours employee contract category I am sure it would have been good practice for G4S Secure Solutions UK Ltd to contact and consult me before changing the existing employment contract we had in place.  It is my assertion that G4S Secure Solutions have unfairly dismissed me without prior notice, without consultation and as such did not follow the correct legal or good practice guidelines in ending the employment contract between us.
I was a permanent employee who due to unforeseen circumstances could no longer work the 48 hours a week contract.  G4S Secure Solutions had this zero hours option in place recognising the flexible shift hours that Security Officers are required to cover and also to help them have at their beck and call highly qualified, vetted and SIA registered Security Officers to step in and provide cover when permanent staff are on leave, sick or unable to do a shift due to sudden unforeseen circumstances or indeed unauthorised absence.  This zero hours contract was also the benefit of G4S.
As an employee G4S Secure Solutions Ltd have a duty to consult me before making changes to my employment contract.  It is completely unacceptable that I receive a P45 in the post stating that my employment had ended on the 31st of March 2012 when I had been paid for work I did on the 15th of March 2012.  I feel used and discarded.”

10.	This email was before the judge.  So was a subsequent email which the judge did not refer to and it says this:

“[…] It was mutually agreed that I change from full time permanent employment to casual zero hours […] I presumed that the agreement of me working casual/zero hours was still in place […] the truth is that G4S and I reached the agreement that I remain on their books as a casual employee.”

11.	The judge recorded the circumstances as being agreed that on 14 November the Claimant moved to a zero hours contract.  This contract has not been produced.  The highest it gets is a direction from the relevant officer to payroll as follows:

“Can you please arrange for the Officers contract to revert to nought hours on standard G4S T’s and C’s?  I would ask that this be effective 14 November 2011.”

12.	Pursuant to the new arrangements, the Claimant was invited to work on 20 November and 7 December 2011, but not again.  On 17 May 2012 he received a P45 in which it is indicated that the Claimant’s effective date of termination was 31 March 2012 and he subsequently put in a grievance where he rehearsed the circumstances.  The judge recorded that he took up a casual contract being the standard zero hours contract operated by the Respondent.

13.	The Respondent’s case was that this was a contract for services and not a contract of service and, on the basis of that challenge, the judge decided that the essential issue could be summarised as follows:

“9. From time to time in 2012 the Claimant would telephone the Respondent to see if there was any work for him.  None was ever provided to him after 7 December 2011.  The Claimant accepted in evidence, in effect, that the Respondent was not obliged to offer him work if there was none available, and that the Respondent would have no claim against him if refused any work that was offered to him.  The Claimant did not however, have a copy of the zero hours terms and conditions and did not understand what the phrase ‘zero hours contract’ meant.”

14.	She also found that there is a screening process:

“10. It is apparently the position under SIA rules that if security guards have not worked for three months, then they need to be rescreened before any fresh work can be offered to them.  The Respondent never contacted the Claimant from March 2012 onwards to warn him that this provision was about to kick in or to ask him if wished to be rescreened.”

15.	The conclusion that she reached, on what she described as the key issue, was there were three potential dates: 14 November 2011; 31 March 2012, the date in the P45; and 17 May 2012 when the P45 was received.  The judge said this:

“16. The Tribunal concluded that the contract of employment was terminated on 17 May 2012.  It rejected the notion that the employment contract had been terminated on 14 November 2011 for a number of reasons, namely that the Claimant was never informed that his employment contract would cease, he never received a P45 at that time, and there was no letter confirming the Claimant’s employment had ended.  The only documents before the Tribunal were an exchange of correspondence which stated that the Claimant’s contract would ‘revert’ to ‘zero hours’ on standard terms.  Since the Claimant did not know what those standard terms were, and in the absence of any documents formally terminating his employment, it was entirely reasonable for the Claimant to have assumed that his employment contract would continue and that the only difference was that he would not be called upon to work regularly, but only on dates that were agreed between the parties in future.  The Claimant is not a lawyer, and it is unreasonable for him to understand what the industry term ‘zero hours’ might portend for such as he.  Had the Claimant been provided with documents at the time, the position might have been very different.
17. The P45 sent to the Claimant in May 2012 was apparently computer generated.  There was no particular decision which took place confirming that the Claimant’s contract of employment wended on 31 March 2012.  The reason why the P45 was apparently sent at that date is because it was during March 2012 that the Claimant had not worked for the Respondent for over three months, and therefore, under SIA rules, would not be able to work in the absence of any rescreening.  This fact alone indicates that the Respondent’s processes are consistent with the possibility that the employment was continuing as at November 2011.”

[I think the reference in paragraph 17 must be to continuing after November 2011.]

The Respondent’s case
16.	On behalf of the Respondent it is contended that the judge made an error in failing to find as a fact the nature of the employment relationship and had, as only barristers use the word, conflated the issues of employment status and termination.  It is also contended that the decision by the judge is perverse and in a rather weak argument on Ground 3 it is contended that the judge gave too much weight to particular factors, including the appreciation of the Claimant of what was happening.

The Claimant’s case
17.	On behalf of the Claimant it is submitted that it is not enough for the axiom to be repeated, that is that there is no obligation to provide work and no obligation to do work; more investigation is required.

The legal principles
18.	The legal principles where that axiom occurs are to be found in the Judgment of the Court of Appeal in Clark v Oxfordshire Health Authority [1998] IRLR 125 at page 130:

“On the findings of the industrial tribunal, the authority was at no relevant time under any obligation to offer the applicant work now was she under any obligation to accept it.  I would, for my part, accept that the mutual obligations required to found a global contract of employment need not necessarily and in every case consist of obligations to provide and perform work.  To take one obvious example, an obligation by the one party to accept and do work if offered and an obligation on the other party to pay a retainer during such periods as work was not offered would in my opinion, be likely to suffice.”

19.	Similarly, in Carmichael v National Power [1999] ICR 1226 the key factor in the decision making was that the respondent was not obliged to provide work and the claimants were not obliged to accept work when it was offered, but that does not close the argument because it is possible for a contract of employment to survive.

Discussion and conclusions
20.	I agree with Ms Owusu that there is insufficient material in this case and I agree with Mr Reed that it is not enough simply to assert that there is a zero hours contract.  The problem in this case may be unique, involving clear renunciation of a contract of employment and willingness to have a zero hours contract. Given the close attention which is currently being given to zero hours contracts, including a Coalition Government review of the matter, a better explanation needs to be given of it.  First, it is a contract - that is conceded in this case - so there is an overarching relationship governed by contract between the Claimant and the Respondent.  Incidents of it are that work can be offered and taken up (see the two dates on which the Claimant did work).  The Claimant continues to have the benefit of his screening under SIA rules, at least for a period of time while that goes on. I asked what would happen when the three months runs out, in this case, apparently, automatically triggering a termination, that is by way of a P45 being sent.  

21.	But something needs to be done to terminate that relationship.  There is no evidence of a retainer being paid as was suggested in Clark, nor of there being an obligation to offer a reasonable amount of work, as there was in Carmichael.  The finding on the Claimant’s account was that the Respondent was not obliged to offer him work if there was none available.  That begs the question: What if there was work available?  It is circular to say that work must be offered when there is none available.  The point is, if there is work available, would it be offered to him?  The evidence showed that he did telephone from time to time to see if there was any work for him and there was not after 7 December 2011.

22.	The grievance which the Claimant has is that he wanted to stay on the books as a casual employee.  He considered the relationship subsisted of an employee but being called in casually to do work.  I put to Ms Owusu that when he did attend on these occasions he was an employee.  It would seem surprising to me that a person who had been employed for ten years, deployed at the FCO as an employee would be so deployed a week later not as an employee, but that is a matter that requires some investigation.

23.	I said in the Judgment I gave in the EAT in Quashie v Stringfellows Restaurants Ltd [2012] EWCA Civ 1735 with the agreement of counsel on both sides in that case that the starting point is to examine the relationship on the occasion when work is actually done.  For, if that is an employment relationship, it is easier to bridge the gaps between those days when work is done than it is if the work is done as an independent contractor.  In other words, you will not put up an umbrella relationship of employment when, on the days work is done, there is not an employment relationship; rather it is the other way round.

24.	The judge, with respect, did not examine the detail which is required to determine whether or not there was a contract of employment in this case.  Given the acceptance that there was a contract in place, the Claimant did not know what the standard terms were.  It may well be that the Respondent was operating under its standard terms, but that does not say standard terms in relation to zero hours.  Standard terms, it seems to me, would be the terms on which he was engaged as an employee and that was the subjective view of the Claimant.  The subjective view is not the most important feature in this case because what has to be determined is what, objectively, were the circumstances.  That is now to be done and so I will allow the appeal and I will send the matter to an Employment Judge to determine whether or not there was a contract of employment as at the date of termination.  The date of termination relied on by the Claimant is 17 May 2012 so that if there were not at that stage a contract of employment then the claim would be dismissed. It is jointly accepted by the advocates before me that this can most expeditiously be done by Employment Judge Palca unless the Regional Employment Judge decides otherwise. This is not at the moment the case on appeal in which a definitive statement of the law relating to zero hours contracts can be given. There is an urgent need for this to happen and Judge Palca may be able to do so in this case on remission, with the Claimant now ably represented by FRU. 

25.	It may be that the scope of the Claimant’s ambition is to go back on the books of the Respondent on a casual basis. If so, since the Respondent contends it did not dismiss him from employment, that result might be achieved by conciliation.