THE INDUSTRIAL TRIBUNALS

CASE REF:	2569/06

CLAIMANT:		JOHN ROSSBOROUGH

RESPONDENT:		McCAUSLAND (HOLDINGS) LTD

DECISION ON A PRE-HEARING REVIEW

The decision of the tribunal is that the claimant was neither an “employee” of the respondent company nor an “employee” within the terms of Article 3 of the Employment Rights (Northern Ireland) Order 1996. 

Constitution of Tribunal:

Chairman:			Ms M Sheehan (sitting alone)

Appearances:

The claimant appeared in person.

Mr D Johnston of T G Menary & Co, Solicitors, appeared on behalf of the respondent.

The Issues

1.	The claimant claimed that on 15 November 2006 he was dismissed unfairly from his employment as a taxi driver with the respondent.  The respondent entered a response denying that the claimant was “an employee” or a worker providing services to them.  The pre-hearing review was arranged to consider the following issue, namely whether the claimant was an employee of the respondent company.

Sources of Evidence

2.	The tribunal heard evidence from the claimant and from Mr Christopher McCausland of the respondent company.  Mr Johnston made submissions on behalf of the respondent company.  In addition the tribunal was referred to a number of documents, which were identified as “R1”, “R2” and “R3”.  The tribunal having heard the evidence and considering all the evidence including the documentation before it found the facts as detailed in the paragraphs below.

3.	The claimant entered into a written agreement with Value Cabs Limited on 25 October 2004 to pay a specified depot rent and comply with other company conditions of customer care in return for obtaining fare paying and account customers who require transport by taxi.  The written agreement was identified at hearing as “R3”.

4.	On 26 October 2004 the claimant entered into a “rent to own” agreement with the respondent trading as Grosvenor Autocentre in respect of a Volkswagen Passat vehicle registration mark NLZ 5232 for £12,250.00.  The claimant made an initial deposit of £250.00 and from 4 November 2004 until 13 November 2006 he made weekly payments in respect of that vehicle while working as a Value Cabs taxi driver. On 16 November 2006 he agreed a final payment figure of £2,215 to purchase outright the vehicle.  The agreement and payment card documentation was identified at hearing as “R2”.

5.	The claimant throughout his time as a “Value Cabs” taxi driver either got paid by passengers direct for jobs allocated through Value Cabs call centre or received payment by cheque, weekly in arrears, from Value Cabs Limited for account passengers for whom he had submitted signed dockets.  The claimant retained all payments received from fare paying passengers with no obligation to account for it to Value Cabs Limited or the respondent.

6.	The claimant could control whether he was available for work or not, subject to the terms of the contractual agreement entered by him in October 2004.  The respondent had no control over when or if the claimant took holidays.  The claimant controlled the times he commenced and finished work on a daily basis.  There was no obligation on the claimant to turn up for work every day.  The claimant upon taking holidays was committed to paying depot rent for those weeks, albeit at a reduced rate.

7.	Value Cabs Limited provided certain equipment specified in the agreement dated 25 October 2004 including radio, meter and roof sign to be used by the claimant when providing a taxi service.  The initial uniform was provided free to the claimant but replacement items had to be purchased from Value Cabs Limited.

8.	There were no payments deducted in respect of income tax or national insurance by Value Cabs Limited from payments made by cheque to the claimant in respect of account customers.

9.	Value Cabs Limited is a wholly owned subsidiary of Whitebridge Investments Limited, a privately owned company with two shareholders Christopher McCausland and Florence McCausland.  These two individuals also are the shareholders in a number of other privately owned companies including McCausland (Holdings) Ltd.  The details of the shareholdings of both individuals in the document identified as “R1” shows that Mr McCausland was the majority shareholder in all three companies identified in that document.

10.	Value Cabs Limited employ approximately 60 people but none are taxi drivers.  The employees either work in the call centre or in the accounts office dealing with various payments including payments to taxi drivers for account customers of Value Cabs Limited.  The claimant received payments weekly for account dockets submitted to Value Cabs Limited although many account customers of Value Cabs Limited were invoiced for these fares on a monthly basis. 

11.	Value Cabs Limited operated a system, which could identify the vehicles available for jobs in any particular zone.  The drivers could, by pressing a switch on the equipment installed in their vehicles, make themselves unavailable for work – called “going off the green”.  Should a driver fail to accept a number of jobs then the control centre could put a driver “off the green”, at least for the rest of that shift.  No one from Value Cabs Limited was responsible for checking why a driver did not turn up for his specified shift.  Drivers like the claimant could change shift simply by informing Value Cab call centre of that intention.  While the claimant agreed to work six days a week with Sunday off, in practice he sometimes worked seven days or varied which day he did not work. 

Applicable Law

12.	The crucial issue between the parties was whether the claimant had worked under a contract of service as opposed to a contract for services either for the respondent McCausland (Holdings) Limited or any other company.  At an early stage of the hearing Mr Johnston on production of the documentation identified at hearing as “R2” and “R3” made submission that there was no evidence before the tribunal that the respondent had employed the claimant.  He submitted that the question before the tribunal should be answered in the negative and the claim dismissed.  The tribunal exercising its powers under rule 14 (3) of Schedule 1 of the Industrial Tribunal (Constitution and Rules of Procedure) Regulations (Northern Ireland) 2005 made enquiry as to the legal status of Value Cabs Limited from Mr Johnston who indicated to the tribunal that he was authorised to represent that company as well. Confirmation was given that the relevant witnesses to give evidence on behalf of Value Cabs Limited were present at the hearing.  The tribunal considered its duty as detailed in the overriding objective under Regulation 3 of the Industrial Tribunal (Constitution and Rules of Procedure) Regulations (Northern Ireland) 2005 and determined that it was appropriate for the pre hearing review to continue as the relevant witnesses were present, taking into account the issues to be determined which did not appear particularly complex in the circumstances of this case. 

13.	The tribunal considered the provisions of Article 3 of the Employment Rights (Northern Ireland) Order 1996.  It also considered relevant case law including Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 1 All ER 433; O’Kelly v Trusthouse Forte plc [1983] IRLR 369 and Cable & Wireless plc v Muscat [2006] IRLR 354.

14.	It is clear from the case law that the essentials of a contract of employment are the obligation to provide work for remuneration and the obligation to perform it, coupled with a “sufficient degree of control” by the employer over the worker.  It is open to tribunals to look beyond the written terms and to examine the substance of the relationship between the parties, in effect, the contractual documentation, oral statements if any and the conduct of the parties throughout the working relationship.  The issue must be determined objectively. 

15.	It was clear on the documentation provided to the tribunal and the evidence of both the claimant and Mr McCausland on behalf of the respondent that any relationship in connection with the claimant’s work as a taxi driver was with the company known as Value Cabs Limited.  The document “R3” did not read like a statement of terms and conditions of employment but more of a contract between the parties as to the service to be provided by each other for a set financial consideration, variable only on four weeks notice by one party Value Cabs Limited to the claimant.  It is clear to the tribunal that in return for the claimant paying depot rent Value Cabs Limited agreed to provide details of jobs received by them to the claimant via the radio controlled equipment owned by them but supplied to the claimant for a set sum.  However whether the claimant accepted the jobs notified was a matter for him. There was no regular or guaranteed number of jobs to be provided for the fixed depot rent.  There was no provision in the agreement for payments other than from the claimant to Value Cabs Limited.  While payments were made in respect of jobs accepted by the claimant in respect of account customers of Value Cabs Limited, payment for those jobs did not depend on Value Cabs being paid by their customer.  Instead Value Cabs Limited paid the claimant often before they had received payment from their customer. While the tribunal was satisfied that Value Cabs Limited and McCausland (Holdings) Limited may be associated companies, the relationship between Value Cabs Limited and the claimant lacked the requisite mutuality of obligation and level of control to amount to a contract of service as opposed to a contract for services.  The tribunal in particular took cognisance of the fact that Value Cabs Limited took no fee or interest in respect of fares paid direct to the claimant for journeys allocated or accepted via the radio system.  All payments were direct to the claimant from the relevant passenger.  There was no hourly or weekly rate of pay.  Indeed it could be said that the claimant’s answer in respect of average take home pay on his application to the Industrial Tribunal office dated 21 November 2006 not only lacked accuracy but amounted to an “economy of the truth”. 

16.	The tribunal found on the balance of probabilities it was satisfied, in light of the facts found, that the claimant was not an employee of the respondent.  The tribunal also found that the claimant was not an employee within the terms of the Employment Rights (Northern Ireland) Order 1996. 

Chairman:

Date and place of hearing:	6 February 2007, Belfast.

Date decision recorded in register and issued to parties: