Appeal No.UKEAT/0283/03/DA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 17 November 2003

Before
THE HONOURABLE MR JUSTICE RIMER
MR C EDWARDS
MR B V FITZGERALD

SOUTH EAST SHEFFIELD CITIZENS ADVICE BUREAU	APPELLANT

MRS J GRAYSON	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MS L McLYNN
(Non-practising Barrister)
Instructed by:
Messrs Bates Wells & Braithwaite
Solicitors
Cheapside House
138 Cheapside
London EC2V 6BB

	
For the Respondent	THE RESPONDENT IN PERSON	

THE HONOURABLE MR JUSTICE RIMER

1	This is an appeal by the South East Sheffield Citizens Advice Bureau (“the Bureau”) against a decision on a preliminary hearing by an Employment Tribunal sitting at Sheffield on 6 January 2003 and chaired by Mr J C Trayler.  The extended reasons were sent to the parties on 23 January 2003.  The applicant before the tribunal and the respondent to this appeal is Mrs Julie Grayson.  

2	Mrs Grayson was an employee of the Bureau from September 2001 to 26 March 2002.  She was a Home Visiting and Outreach Development Worker earning a basic salary of about £17,200 per year, with an average take-home pay of around £1,100 per month.  She presented her originating application to the tribunal in June 2002, claiming compensation on the ground that she had allegedly been the victim of acts of discrimination by the Bureau, contrary to the Disability Discrimination Act 1995.  Her claimed disability was rheumatoid arthritis, from which she said she had suffered for about twelve years and of which she said the Bureau had been made expressly aware.  She complained that, despite requests, the Bureau had failed to make reasonable adjustments to cater for her disability.  Her employment was terminated in March 2002, in circumstances which Mrs Grayson claimed amounted to dismissal.  

3	The Bureau’s IT3 was dated 17 July 2002.  It disputed the factual basis of Mrs Grayson’s allegations in material respects, including the allegations that it had discriminated against her. But its primary point, and the only one with which we are concerned, is that it denied that the tribunal had any jurisdiction to hear her complaint.  Mrs Grayson’s complaint arose, if at all, under Part II of the Disability Discrimination Act 1995.  Section 7(1) of the Act provides, however, that nothing in that Part applies to an employer who has fewer than 15 employees, and the Bureau’s case was that at all times during Mrs Grayson’s employment, it did have fewer than 15 employees.  

4	The preliminary hearing before the tribunal was concerned solely with whether the Bureau enjoyed the section 7 exemption.  The Bureau’s case was that at all material times it had at most 11 employees.  Mrs Grayson accepted that there were only 11 paid employees, but she claimed that some of the Bureau’s voluntary workers and its management committee directors should also be counted as employees for the purposes of the Act.  If she was right in that then the overall number of employees for the purpose of section 7 would have exceeded 15.  Section 68(1) of the Act defines “employment” as meaning:
“…….. subject to any prescribed provision, employment under a contract of service or of apprenticeship or a contract personally to do any work, and related expressions are to be construed accordingly”

The question for the tribunal was therefore whether the volunteers and directors were employees under such a contract.  

The facts found by the tribunal
5	The tribunal heard evidence from Mrs Grayson and from Mrs Whiteley, the Bureau’s manager.  It found that the Bureau offered advice to the public at a number of locations.  It was controlled at the material time by a board of ten directors.  It found that at the material time it had 11 paid employees who were indisputably engaged under contracts of employment which fell within the definition in section 68.  It also had a number of unpaid volunteers who were essential to its operations.  There were 17 at 31 March 2002.  They carried out a variety of tasks, including giving advice and administrative and reception support.  The tribunal found that the volunteers were engaged under the terms of a “Volunteer Agreement” and we should now refer to the principal provisions of that agreement.  

The Volunteer Agreement
6	The Agreement opened by stating that the Bureau was:
“….committed to the principle of volunteering.  The following agreement has been prepared to clarify the reasonable expectations of both the volunteer and the Bureau.  
The Bureau is committed to providing volunteers with a supportive environment and the opportunity to develop skills and knowledge.
In order to ensure that we give our clients a good service the Bureau has a number of expectations of its voluntary staff.”

The Agreement then set out these expectations under a number of heads.  Under the heading “Social Policy Work”, it provided that volunteers were:
 “expected to take part [in the social policy work of the Bureau, including taking part] “in social policy monitoring exercises from time to time in line with NACAB requests”
Under the heading “Hours”, it provided that:
“The usual minimum weekly commitment is for 6 hours including interviewing and writing up case records.  In addition you will need reading time to keep up to date and to attend workers meetings and training sessions. 
We will be flexible about when you work within the constraints of drawing up the rota”
As for holidays, volunteers were asked to give the Bureau as much notice as possible so that the rota could be re-arranged and the Agreement stated that the Bureau “will accommodate your holiday arrangements”.  Under the heading “Expenses”, the Agreement provided:
“We ask that you try to use the most economical form of transport and in some cases receipts will be required. 
Childminding will be paid at the local rate.
Our policy is that you will be paid on the basis of not being out of pocket.  Expenses will be paid for travel between home and the Bureau and for any other travelling done in the course of your work eg home visits, training courses, staff meetings.  (Please ask for details of rates etc).”

The Agreement imposed confidentiality terms on volunteers about client matters.  It made clear that it operated an equal opportunities policy and that volunteers were expected not to discriminate against “clients and colleagues” on the grounds of race, sex, religious belief, sexual orientation, disability or age.  Under the heading “Problems”, the Agreement provided inter alia that:
“All workers, paid or voluntary should feel able to put forward suggestions for improving the Bureau.  Suggestions can be raised with the manager or deputy manager or at workers meetings”

Volunteers were recommended to consult with whoever was on duty when they felt unsure about how to deal with a client’s problem and the Agreement provided that the Bureau aimed:
“…… to provide adequate back-up to voluntary staff.  You should feel able to ask for help when you get stuck”
The Bureau operated a scheme of:
 “….. regular assessment.  Part of this process is assessing your own strengths and weaknesses.”
Under the heading “Training”, the Agreement provided:
“You are required to undertake the NACAB basic training course before you will be allowed to interview any clients.  
We expect you to accept the need for continued in-service training in order to maintain and improve the quality of your work.  We rely on you to ask for specific training.
We will provide training opportunities at different levels to all staff both in the Bureau and at other locations”. 
The Agreement provided that volunteers were:
“….. expected to attend [staff meetings] as often as possible as they provide a forum to share experiences”
It said that:
“……  there are voluntary staff representatives on the management committee to act on your behalf. These are elected by you.”
It asked volunteers to observe safety rules and practices and to:
“…… inform the manager or deputy of any unsafe practices or any accidents”
It provided that if an interviewer realised that he or she had made a mistake, it was important to tell the person on duty, provided that advisers who make mistakes would:
“…… not be individually liable for any action the client may take.  
The Bureau accepts full liability”
Under the heading “Leaving the Bureau”, the Agreement provided:
“We ask that you give as much notice as possible so that we can re-arrange the rota.
If you are leaving because you are dissatisfied in any way we ask that you discuss this before you leave.
If you wish we will provide you with a reference indicating the skills and knowledge you have required as well as qualities observed.
If you are signing on and are in receipt of benefit we will accept leave at short notice.”
The Agreement further provided that volunteers were expected to retire at the age of 70:
“…. but the management committee has the discretion to extend that”.
Finally, it provided that volunteers should be aware of the Bureau’s grievance and disciplinary procedures and that they had:
“…… the right to be fairly treated within the grievance procedure” 
and 
“the right to instigate the Bureau’s grievance procedure”

Oral evidence

7	The tribunal also heard oral evidence as to the Bureau’s operations.  The tribunal explained that Mrs Grayson relied principally on the contention that it was the voluntary “advisers” rather than the “interviewers” who increased the number of employees for the purposes of section 7.  It had evidence that the advisers were placed on rotas to provide advice at several different centres on a number of different days of the week.  The advisers were committed to the rota appointments and there was evidence that they kept to the rota, but the tribunal found that no sanction could be applied to any adviser who failed to keep to it, although the Bureau could remove that adviser from the rota.  The evidence of Mrs Whiteley, the Bureau’s manager, was that if any adviser offered fewer than six hours work a week, then some other voluntary work for the Bureau could be provided.  The tribunal said that:
“The motive initially for making that minimum expectation of 6 hours per week was to maintain experience so that there would not be huge gaps between the times when the advisers were working”

8	The tribunal found that the expenses payments to volunteers were only by way of reimbursement for genuine expenses and that mileage expenses were reimbursed at the rate of 35p per mile.  It found that this did not involve any additional payment beyond the expense of the use of the volunteers’ vehicles.  It found that:
“There was an expectation that the advisers would commit themselves to the rota and [the Bureau] effectively committed itself to their support on that rota itself.  The advisers could give notice to come off the rota if they so wished and also so as to take holidays or any other absence from their work.”

The tribunal said that it had heard less evidence about the directors.  It said:
“……. that they received no remuneration or benefit from the charity itself.  There was no strict obligation upon them to attend any meetings or to do any work for the charity and whilst there was requirement that they give notice if they wished to cease membership this addressed essentially the quorum for meetings rather than any other matters.”

The tribunal’s conclusions

9	The tribunal found first that the directors were not employed under an employment contract within the definition of section 68.  It found that they had no contract of service or any contract personally to do any work for the Bureau.  It said that it “heard no evidence of any obligations by either side”.  As for the advisers, the tribunal found, by contrast, that they were employed under a contract of service with the Bureau.  In arriving at this conclusion, the tribunal was impressed that there was no clause in the Volunteer Agreement to the effect that there was no intention to create legal relations between the Bureau and the volunteers.  It took account of the fact that:
“…… there was a risk of losing the position on the part of the advisers if they did not comply with the minimum 6 hours per week”

It was apparently impressed by:
“…… the terms of that volunteer agreement and the obligations placed upon each of the parties to it”

It found that:
“…… there was an intention that work would be done by the advisers in return for the payment of expenses incurred and the provision of training, the opportunity to gain experience and the acceptance of legal liability on the part of the Bureau for any errors which they may commit in the course of the work done.”

10	The tribunal said this in paragraphs 15 to 18 of its extended reasons
“15…..  We find that there was a contract between [the Bureau] and the advisors and that there was a binding agreement between them which could have been enforced by either side.  We ask ourselves first of all if this is a contract for services.  There is a usual minimum commitment of 6 hours per week and therefore there is a commitment to provide time.  Whilst providing the advice, i.e. whilst actually working, the volunteers were engaged under a contract of service.  The consideration for that provision of time is the training, supervision, experience and to cover them in respect of any liability for any negligence [sic] advice given.  If they continued with the provision of work then they would continue to receive those benefits. However, if the advisers chose not to continue to provide the 6 hours then [the Bureau] would have been in a position to remove the benefits of experience, of training and indeed provision of any expenses.  We find that there was a contract of employment.
16.  If we were wrong in that we considered the separate part of Section 68(1) under which they are to be treated as employees if they are employed under a contract personally to do any work.  We have already made a finding that there was a contract here, an offer to provide work in return for the other benefits to the advisers which we have already referred and that this is a contract to do work within the meaning of the Act.
17.  Taking those 7 advisers into account and adding those to the 11 paid employees we find that there are 18 and therefore [the Bureau] is not entitled to the Section 7 exemption.  We considered that firstly there was clearly a contract on the part of the advisers to do work for [the Bureau] and from [the Bureau’s] part to pay expenses.  That at least was enforceable within the contract between them.  Similarly in relation to the question of indemnity for errors in the course of the adviser’s work.  It seems to us that there was an enforceable obligation on the basis of a contract between the parties.  The other issues within the contract are to a great degree consistent with employment.  There is a disciplinary and grievance procedure, an equal opportunities procedure, a health and safety policy and in addition provision for supervision and assessments of the advisers whilst giving their work.  
18  Taking into account all the circumstances and on balance we find that the advisers are to be counted as employees and being 7 in number [the Bureau] does not have fewer than 15 employees within the meaning of the Act and therefore we have reached the decision that we have…”

The appeal to this Appeal Tribunal
11	The Bureau’s Notice of Appeal against that decision is dated 5 March 2003.  Mrs Grayson filed an answer to it on 16 May 2003 by which she sought simply to support the tribunal’s decision on the basis that it had applied the correct legal test and had arrived at a justifiable conclusion.  Ms McLynn, a non-practising barrister employed by Bates Wells & Braithwaite, the Bureau’s solicitors, appeared for the Bureau on this appeal.  Her starting submission was that for any alleged contract to be legally binding it is fundamental that the parties should intend to be legally bound by it, that is that they should intend to enter into legal relations.  She said that the unchallenged evidence of Mrs Whiteley was that neither the Bureau nor the volunteer signs the Volunteer Agreement, since it is not a document intended to create any legal contract or obligation between them.  She submitted that in any event it was not possible to infer from the Volunteer Agreement, read as a whole, that it was a document intended to impose legal obligations on either the Bureau or the volunteer and that the tribunal was in error in placing weight on the fact that there was no express statement in it that there was no intention to create legal relations.  She said that whilst an express statement to that effect may be relevant factor to bring into account, the absence of any such statement cannot be a relevant factor.  More generally, Ms McLynn’s submission was that there is simply no basis on which it is possible to interpret the relationship between the Bureau and its volunteers as one in the nature of a contract of service or a contract imposing obligations on the volunteer personally to do work for the Bureau.  

12	We found Ms McLynn’s arguments compelling ones.  We start from the point that the question for the tribunal was whether the Bureau’s volunteer workers were subject to a contract under which they were obliged to work for the Bureau.  So expressed, it would appear to us surprising if the answer to that question were yes, since it is of the essence of volunteer workers that they are ordinarily under no such contract.  As volunteers, they provide their services voluntarily, without reward, with the consequence that they are entitled to withhold those services with impunity.  However that starting position is not necessarily also the finishing point.  In every case, including this one, if a question arises as to the legal relationship between an alleged employer and a so-called voluntary worker, it is always necessary to analyse that relationship to see exactly what it amounts to.  But if the proposition is that the volunteer worker is in fact an employee under a contract of service, or under a contract personally to do work, for the purposes of section 68 of the 1995 Act, then in our view it is necessary to be able to identify an arrangement under which, in exchange of valuable consideration, the volunteer is contractually obliged to render services to or else to work personally for the employer.  

13	At least one test which may help in this identification exercise is to consider whether, if the volunteer should decline without prior notice to perform any work for the employer, the latter would have any legal remedy against him; and similarly to consider whether, if the volunteer attends to do work and there is none, he has any legal remedy against the employer.  We should perhaps add that in summarising the position in the way we have, we have not overlooked the decision of this Appeal Tribunal in Burton -v- Higham t/a Ace Appointments [2003] IRLR 257 in which it was held that it is not necessary for the purposes of the section 68 definition to show that the contractual obligation to work is to do work for the other party to the contract, as opposed to some third party.  We do not regard that particular consideration as material in this case.  The critical question here is whether the volunteers were contractually obliged to provide their services to the Bureau, albeit that the provision of those services, at any rate in relation to the work done by the advisers, was in part outwardly manifested by the giving of advice to the Bureau’s clients.  

14	We agree with the tribunal that, in considering the key questions in the present case, it is necessary to focus on the “Volunteer Agreement” and to consider, in particular, whether it imposes any contractual obligations on the volunteers actually to do any work for the Bureau in exchange for consideration.  We consider, first, that it is of least some relevance that the Agreement is not required to be signed by either the Bureau or the volunteer, a factor which tends to us to suggest that it was not regarded (at least by the Bureau, which was the author of the document) as constituting a binding legal relationship in the nature of a contract of service or for services between it and the volunteer.  We do not, however, regard that feature as by itself conclusive.  

15	However, rather more solid, and early support, for the view that the Agreement was not intended to constitute such a legal relationship is to be found in its opening explanation of itself, namely that it 
“…… has been prepared to clarify the reasonable expectations of both the volunteer and the Bureau”
The Agreement is, therefore, one directed at clarifying each sides “reasonable expectations”.  Translated, that means that it is directed at identifying what the Bureau reasonably expects of the volunteer and what the latter can reasonably expect of the Bureau.  That is not the language of contractual obligation.  In particular, someone who is indisputably engaged under a contract of service, or for services, will not usually find his and his employer’s respective contractual obligations expressed in terms of “reasonable expectations”.  They will ordinarily be expressed in terms of unqualified obligation, or at any rate the primary obligations will be so expressed, in particular those relating to the employee’s hours of work and his reward for it.  

16	Moving forward in the Agreement, it goes on to provide that the volunteer’s “usual minimum commitment is for 6 hours including interviewing and writing up case records”.  We interpret the phrase “usual minimum commitment” as indicating, in the context, what the Bureau expects of its volunteers.  It is not saying that the volunteers must work those hours, let alone that there is a legal obligation for them to do so, and the tribunal accepted Mrs Whiteley’s evidence that no sanction was available against any volunteer who did not honour his commitment.  If there is no sanction for not honouring that commitment, that suggests that it is not a commitment in the nature of a legal obligation.  The reason, however, that the Agreement identifies what it refers to as the usual minimum commitment is that charities like the Bureau that are materially dependent on the provision of assistance by volunteers have to organise the provision of their volunteers’ services to clients in an orderly way, and it is therefore entirely to be expected that an Agreement such as this will set out guidelines as to the hours it expects its volunteers to put in.  This is because the Bureau will want to make the most efficient use of its resources.  Similarly, insofar as the Agreement, as it does, makes clear that it expects the volunteer to give as much notice as possible of holiday arrangements, the reason the Bureau wants that information is so that it will be able to organise the rota accordingly.  But it is to be noted that the Agreement says nothing about the amount of holiday the volunteer can take.  On the face of it, he or she can take as much holiday as and when he or she likes, subject only to the qualification that it is at least expected of him or her that he or she will give the Bureau plenty of warning of it.  It appears to us that an agreement under which an alleged employee has this sort of freedom with regard to the taking of holiday is unlikely to be a contract of service or for services.  The most striking pointer against it being such a contract is of course that the volunteer is not paid for his services.  Whilst he is reasonably expected to put in at least six hours a week, he is not in fact obliged to put in any such hours; he is not paid for such hours as he does put in and the Agreement identifies no minimum number of weeks per year during which he is expected to put in those minimum hours.  

17	The tribunal was impressed by the fact that the Agreement makes it clear that the Bureau will reimburse volunteers for their expenses incurred in connection with the performance of work for the Bureau.  It also found as a fact that this part of the Agreement extends only to true expenses.  We regard this feature of the Agreement between the Bureau and its volunteers as entirely unsurprising.  It would, in our view, be very surprising if unpaid volunteers were expected to bear their expenses incurred in the course of their work for the Bureau, and we do not regard this feature of the Agreement as providing support for the contention that in truth the Agreement was one of service or for the personal provision of services.  

18	We are prepared to accept that this element of the Agreement, and also the provision in it to the effect that the Bureau will indemnify advisers against negligence claims by disgruntled clients, probably do, or at least may, evidence a binding contractual relationship between the Bureau and the volunteer, namely a unilateral contract in the nature of what is sometimes referred to as an “if” contract, one which can be expressed as follows: “if you do any work for the Bureau and incur expenses in doing so, and/suffer a claim from a client you advise, the Bureau will indemnify you against your expenses and any such claim”.  But that contract is still not one which imposes on the volunteer any obligation actually to do any work for the Bureau.  

19	The critical question, in our view, is whether it is possible to extract from the Agreement, read as a whole, a contractual obligation on the part of the volunteer to provide any services at all to the Bureau.  The inclusion in the arrangements between the Bureau and the volunteer of an “if” contract of the type we have just identified does not enable this question to be answered in the affirmative, since such a contract imposes no obligation on the volunteer to do anything.  The tribunal’s conclusion was that the “usual minimum commitment” of six hours a week imposed a commitment on the volunteer to provide time to the Bureau and that the consideration moving from the Bureau for the provision of that time was the provision of training, supervision, experience and the indemnity against expenses and negligence liability.  The tribunal held that, so long as the volunteer provided the Bureau with his work, he enjoyed those benefits in return; but if he chose not to provide the Bureau with his work, the Bureau could withdraw those benefits (see the end of paragraph 15 of its reasons).  

20	In our view, that reasoning is flawed.  We note that the tribunal does not appear to suggest that any cessation by the volunteer of his services will entitle the Bureau to any remedy against him for breach of contract to provide them.  It appears merely to say that withdrawal of his services will entitle it to withdraw its various benefits, including, apparently, not just the provision of training and experience but also the reimbursement of expenses and cover for negligence.  The tribunal’s reasoning to this effect appears to us to be difficult to follow.  First, we fail to understand why, if a volunteer were to decide to cease working for the Bureau, he should not be entitled to recover those expenses he has properly incurred whilst he was working for it, or why he should not continue to be entitled to cover by the Bureau for negligence in respect of work he has actually done.  Equally, we have no difficulty in understanding that, once the volunteer has so ceased, the Bureau will not be liable to indemnify him against future expenses and future negligence liability because there will obviously be none.  We do not know whether this was in fact the situation that the tribunal had in mind in what it said towards the end of paragraph 15, or whether it was contemplating a situation in which, for example, the volunteer chose to reduce his hours from six to five, rather than from six to nought.  Since, however, the tribunal’s reasoning was expressed as economically as it is, we do not propose to take time in guessing what it actually had in mind.  We do not ourselves regard provision to the volunteer of training as amounting to consideration for a commitment by the volunteer to provide services in exchange.  The training is certainly so as to enable the volunteer to do the job, and the Bureau will reasonably expect its trained volunteers to do work for it which will show the provision of training to have been worthwhile.  But the training cannot, in our view, be regarded as consideration of what the tribunal appears to have found to be some form of reciprocal undertaking by the volunteer to honour some minimum commitment.  The Agreement itself makes no such suggestion, nor can we see how the acquisition by the volunteer of experience in the course of the provision of his services can amount to consideration for what the tribunal appears to have found to be such a reciprocal undertaking.  The notion that the acquisition of the experience which the doing of a particular job will give can be regarded as consideration for the performance of the job itself is one which we cannot understand.  

21	We consider that the crucial question which was before the tribunal was not whether any benefits flowed from the Bureau to the volunteer in consideration of any work actually done by the volunteer for the Bureau, but whether the Volunteer Agreement imposed a contractual obligation upon the Bureau to provide work for the volunteer to do and upon the volunteer personally to do for the Bureau any work so provided, being an obligation such that, were the volunteer to give notice immediately terminating his relationship with the Bureau, the latter would have a remedy for breach of contract against him.  We cannot accept that the Volunteer Agreement imposed any such obligation.  Like many similar charitable organisations, similarly dependent on the services of volunteers, the Bureau provides training for its volunteers and expects of them in return a commitment to work for it, but the work expected of them is expressed to be voluntary, it is in fact unpaid and all that the Volunteer Agreement purports to do is to set out the Bureau’s expectations of its volunteers.  In our view, it is open to such a volunteer at any point, either with or without notice, to withdraw his or her services from the Bureau, in which event we consider that the Bureau would have no contractual remedy against him.  We find that it follows that the advisers and other volunteers were not employed by the Bureau within the meaning of the definition in section 68 of the 1995 Act.  

22	We should add that Mrs Grayson, who appeared before us in person, raised in her written argument, although she did not repeat it in her oral address, a point which had not been foreshadowed in her answer, namely that to allow the Bureau to take advantage of the statutory exemption in section 7 of the 1995 Act would be to deny her human right to a fair trial under Article 6 of the European Convention for the Protection of Human Rights and Fundamental Freedoms and to a discriminatory infringement of her Convention rights, contrary to Article 14.  These were new points which were neither ventilated before the tribunal nor, as we have said, raised in Mrs Graysons’s answer, nor has this Appeal Tribunal at any earlier stage, as we understand it, given permission for such a point to be argued.  But in any event, even though Mrs Grayson did not seek to expand upon the point in her oral address, we are anyway unconvinced that there was or is any substance in it.  We cannot see that there is any basis for a suggestion that Mrs Grayson has not had a fair trial before the tribunal, where she was successful, and nor do we understand how any failure on our part to accede to her argument that the volunteers were in fact employed for the purposes of section 68 will mean that she was not receiving a fair hearing from us.  As for her Article 14 rights, we do not understand in what respect it is said that Mrs Grayson has been discriminated against in respect of either her Article 6 right or any other of her Convention rights.  We hold there is nothing in these points.  

23	We will allow the appeal, set aside the decision of the tribunal and substitute for it a decision that the Bureau is entitled to the small business exemption in section 7 of the 1995 Act and that the tribunal had no jurisdiction to hear Mrs Grayson’s application.