Appeal No.	EAT/1261/97

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 30 January 1998

Before
HIS HONOUR JUDGE PETER CLARK
MR A E R MANNERS
MR R SANDERSON OBE

EXPRESS & ECHO PUBLICATIONS LTD	APPELLANTS

MR E TANTON	RESPONDENT

Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING

Revised

	APPEARANCES

For the Appellants	MR J SWIFT
(of Counsel)
Messrs Foot & Bowden
Solicitors
The Foot & Bowden Building
21 Derry's Cross
Plymouth PL1 2SW	

	JUDGE PETER CLARK:     On 9 July 1997 the Applicant presented an Originating Application to the Industrial Tribunal complaining of breach of contract and seeking written particulars of his terms and conditions of employment.  The Respondent contended that he was self-employed and not entitled to a statement of terms and conditions as provided for in Section 1 of the Employment Rights Act 1996.

	The matter came before a Chairman, Mr Brian Walton, sitting alone at the Exeter Industrial Tribunal on 9 September 1997 on a preliminary issue, namely whether the Applicant was an employee of the Respondent within the meaning of Section 230 of the Act.

	The Chairman found that the Applicant was employed by the Respondent until his dismissal by reason of redundancy in 1995.  Subsequently, he and others were engaged by the Respondent as drivers on a basis which the Respondent intended would be that of self-employed independent contractors.  They issued him with a draft contract in writing which he refused to sign.  We have seen that document.  It was designed to create self-employed status.

	The Chairman looked at the various factors pointing each way in determining whether or not the Applicant was employed under a contract of service or engaged under a contract for services.  We need not repeat those factors.  They are fully set out in the reasons given by the Chairman and dated 16 September 1997.

	He directed himself that no one factor was conclusive, and paid particular attention to the fact that the Applicant could and did provide a substitute driver when he was unavailable for work.

	Looking at the matter overall the Chairman concluded that here was a contract of service and so ruled.

	Against that decision the Respondent now appeals.  Mr Swift argues, first, that the question revolved around the proper construction of a written contract:  Davies v Presbyterian Church of Wales [1986] ICR 280.  Secondly, he submits that the contract, alternatively the Chairman’s finding of fact, was that the Applicant was entitled to provide a substitute; accordingly, this was not in truth a contract of personal service.  That provision was inconsistent with employee status.  He relies on the well known judgment of MacKenna J in Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497, and the very recent decision of the Court of Appeal in Clark v Oxfordshire Health Authority, as yet unreported, the judgment handed down on 18 December 1997.

	The question as to whether or not a complainant is employed under a contract of service has led to much legal learning.  We have considered the most recent pronouncement of the Court of Appeal in Clark in which Sir Christopher Slade, giving the leading judgment of the court, reviewed some of the earlier cases and affirmed the principles emerging from those cases.

	From that line of authority beginning with Ready Mixed Concrete and ending with Clark, we have drawn the following propositions of law.

(1)  The presence of mutual obligations on the parties is a prerequisite of a contract of service.  That is an “irreducible minimum”.

(2)  Where the terms of the relevant contract are solely contained in a written contract it will be a pure question of law as to the proper construction of those written terms:  Davies.

(3)  It will be otherwise where the question depends upon an evaluation of the factual circumstances in which the work is performed.  Then, it will only be open to an appellate court or tribunal to interfere with an Industrial Tribunal decision where it can be shown to be perverse in the Edwards v Bairstow sense.

(4)  Subject to the need for mutuality of obligation, no single factor will be conclusive in determining the question of employment status.  In particular, we do not understand the judgment of MacKenna J in Ready Mixed Concrete as laying down a further minimum requirement of personal service at all times.  In that judgment at page 515 C - E MacKenna J said this:

“I must now consider what is meant by a contract of service.
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.
I need say little about (i) and (ii).
As to (i).  There must be a wage or other remuneration.  Otherwise there will be no consideration, and without consideration no contract of any kind.  The servant must be obliged to provide his own work and skill.  Freedom to do a job either by one’s own hands or by another’s is inconsistent with a contract of service, though a limited or occasional power of delegation may not be.”

	In this case we look first at Clause 3 of the draft contract which provides:

“3.  Contractor’s Obligations
3.1  During the period of the Agreement the Contractor is retained to provide the Service to the Client at such times and at such locations as the Client and the Contractor shall agree from time to time.
3.2  The Contractor shall perform the Services with reasonable care and skill and to the best of his ability.
3.3  In the event that the Contractor is unable or unwilling to perform the Services personally he shall arrange at his own expense entirely for another suitable person to perform the Services.”

	By a Schedule to the draft agreement at paragraph 13 it is provided:

“13.  In the event that the contractor provides a relief driver, the contractor must satisfy the company that such a relief driver is trained and is suitable to undertake the services.”

	In the course of his Extended Reasons the Chairman accepted that Clause 3 of the draft agreement was not a sham or device.  He found that in practice substitutes had been provided by the Applicant.  From time to time he arranged for a friend who was previously employed by the Respondent to stand in for him and he further found that, during one period of about six months when the Applicant was ill, that friend took over the work and was paid by the Respondent.  The Chairman found that that was an exceptional state of affairs.

	In his concluding paragraph at paragraph 27 of the reasons he said this:

“On the odd occasions, such as the night before the tribunal hearing, he has simply had a day off and provided a substitute.  There might come a point at which the provision of a substitute is so frequent as to change the whole nature of the arrangement but there is no evidence before me that that point has been approached in any degree at all.”

	He concluded that the Applicant was employed under a contract of service.

	Applying the propositions of law which we have set out to the instant case, we have concluded that the relationship between the parties was not solely governed by a written contract.  The Applicant refused to sign and therefore approbate the draft contract presented by the Respondent.  The Chairman carefully considered the relevant indicia pointing both ways and reached a permissible conclusion that, viewed overall, this was a contract of service.  In particular, we are satisfied that the Chairman was entitled to regard the fact that the Applicant was not required to provide, at all times, his own personal services to the Respondent as a highly material, but not conclusive factor in the equation.  

	For the avoidance of doubt we reject the proposition advanced by Mr Swift on behalf of the Respondent that the fact that under the draft contract and in practice the Applicant was able to provide a substitute when he, himself, was unavailable to carry out the work personally, is fatal to a contract of service.

	In these circumstances we have reached the conclusion that this appeal raises no arguable point of law and accordingly it will be dismissed at this stage.

	Leave to appeal refused.