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	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Kendal & Ors v. Caley Fisheries Ltd [2005] UKEAT 0507_04_0902 (9 February 2005) URL: http://www.bailii.org/uk/cases/UKEAT/2005/0507_04_0902.html Cite as: [2005] UKEAT 507_4_902, [2005] UKEAT 0507_04_0902

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APPEARANCES

 

 

For the Appellants	MR JEREMY BAKER (Representative)
For the Respondent	MR COLIN BOURNE (of Counsel) Instructed by: Messrs Gosschalks Solicitors 61 Queens Gardens Hull HU1 3DZ

SUMMARY

Contract of Employment

Scallop cutters – were they employees under a series of contracts of employment (one each day they chose to work)? Held not: lack of mutuality of obligation. Employment Tribunal decision upheld.


 


HIS HONOUR JUDGE J R REID QC

1. This is an appeal against a decision of an Employment Tribunal held at Hull on the 5 February 2004. On 25 February the Tribunal considered its decision and the reserved decision was sent to the parties on 20 April 2004.
2. In this appeal the various Applicants, numbering 11 in all, appeal against the determination of the Tribunal on a preliminary point that none of them were employees of the Respondent, Caley Fisheries Ltd.
3. The Applicants all worked at Celtic Sea Foods factory in Hull, owned by the Respondent. The factory dealt with various fish processes, including filleting and curing. The Applicants were involved in "queenie cutting". This is cutting open of queen scallops and the removal of the flesh ready for sale. The work available for queenie cutters varied from day to day and week to week. For example, from January to June 2003 the supply of scallops were such that workers at the factory were engaged for only two days a week. Indeed as a result of the downturn in trade, operations ceased at the factory on 29 July 2003, and the factory was closed after completing some outstanding administration on 1 August 2003. It is this closure which has given rise to the present claims.
4. Each of the Applicants put in an IT1 in the same form. Each claimed unfair dismissal. Each put in, in paragraph 11 of the IT1, a statement which asserted they were not paid any notice pay or holiday pay, that they believed that they were unfairly dismissed and that they claimed a redundancy payment and their outstanding notice and holiday pay.
5. Because of the dispute as to the employment status of the Applicants the preliminary point was ordered. The issue upon which this appeal turns emerged only in the final submissions of the representative of the Appellants. In his final submissions the representative accepted that none of the Applicants had a continuous contract of employment. He submitted, however, that each of them had a new contract of employment on each day on which they went into work, and that by virtue of section 212 of the Employment Rights Act 1996 those separate periods were to be treated together for the purposes of determining their period of continuous employment. The Tribunal disposed of this argument, saying:

"This argument might be correct if a contract of service ever existed. However, the Tribunal has found that the arrangement between each of the Applicants and the Respondent throughout the period of the working relationship lacked the mutuality of obligation required for a contract of employment as defined by the act. None of the Applicants was an employee of the Respondent and the provisions of section 212 of the Act did not apply in the circumstances."

6. The Tribunal's findings of fact as to the system of working at the factory were as follows. Work in the industry was by its nature sporadic and there were many occasions when no work was available. The company would daily record a message on a telephone answering machine, informing those who chose to telephone the number whether work would be available the following day or not. Cutters, including the Applicants, could choose whether or not to ring the number and if work was available, could choose whether or not to attend at the factory to work. Once there, they could work at their own pace, though they were expected "to pull their weight". They could choose whether to work through the morning and afternoon tea breaks and whether or not to work through their lunch break. There was an exception in the case of those who worked on a cutting machine, rather than working by hand, because then the machine would only be stopped by agreement between the operators and supervisor or manager as to when breaks would be taken. Hand cutters could choose their own breaks. There was a requirement that those who chose to come in and work should work at least 4 hours. The work was suitable, for example, to those with young children who could come in after taking them to school and leave to collect them from school.
7. There was evidence that some of the Applicants would come in when they felt like it and others on occasions would choose not to come in. If a cutter did not attend work for about six weeks they would be contacted, if possible, to see if there was any specific reason as to why they might not be attending. If there was a particular circumstance, such as illness or bereavement, they would be left on the books until they decided if they wanted to return. If they did not wish to return, or if they could not be contacted, they would usually be taken off the books and their P45 issued. From September 2001 the cutters were offered the opportunity of joining a stakeholder pension scheme provided by Friends Provident. Unlike members of staff considered to be employed under a contract of service, no contribution was made to their payments by the Company.
8. There was no written contract of any sort between any of the Applicants and the Respondent. The terms on which they worked could be gathered from the course of dealing between the Respondent and the Applicants and perhaps from the terms of an induction talk given to all new workers. Wages were subject to tax; national insurance payments were deducted; statutory sick pay was available to those off sick; and annual paid leave and payment for bank holidays was given.
9. Permanent staff, as opposed to the cutters, had written contracts of employment, were required to attend for work each day, had fixed starting and finishing times, were subject to written disciplinary procedures, and had a written grievance procedure. They were required to notify the Respondent if sick and to notify the Respondent when they wished to take their annual leave.
10. The Tribunal held that when any of the Applicants were at work, they were required to carry out work as dictated by the Respondent, that newcomers would have to be trained and that though they could take a break when they liked, they were required to be productive even though only being paid for the work which they achieved. It was suggested that in a four hour shift about two buckets of scallops could be dealt with for which payment would be about £14. Those working on the cutting machine were paid on an hourly basis at a rate of £5 an hour.
11. The Tribunal concluded that the most significant feature of the arrangement between each of the Applicants and the Respondent was the lack of mutuality of any obligation between the parties. An essential element, said the Tribunal, of a contract of employment is that the employer shall provide work for the employee and, if provided, the employee is obligated to carry out that work. Without that mutuality and obligation there is no contract of service or contract of employment as defined in the Act.
12. The provisions of sections 210 and 212 of the Employment Rights Act 1996 upon which the Applicants relied are as follows:

"210 (1) References in any provision of this Act to a period of continuous employment are (unless provision is expressly made to contrary) to a period computed in accordance with this chapter.

212 (1) Any week during the whole or part of which an employee's relations with his employer are governed by a contract of employment counts in computing the employee's period of employment.

(2) …

(3) Subject to subsection 4, any week (not within subsection (1)) during the whole or part of which an employee is –

(a) incapable of work in consequence of sickness or injury,

(b) absent from work on a count of temporary cessation of work, [or]

(c) absent from work in circumstances such that, by arrangement or custom, he is regarded as continuing in the employment of his employer for any purpose

(d)…

counts in computing the employee's period of employment.

13. Latching on to this section, the representative of the Applicants submitted that the Tribunal fell into error because, it was said, the Tribunal looked only to see if all the days when the Applicants worked could be treated as being parts of a single continuous contract. He noted that the Tribunal referred to Carmichael and Another v National Power Plc [2000] IRLR 43, a case in which the question was whether there was a single continuous contract of employment, and in which Lord Irvine LC carefully pointed at paragraph 3 that the claim to particulars of terms of employment was not advanced on the basis that when the Appellant's actually worked as guides they did so under successive ad hoc contracts of employment.
14. What was submitted was that in this case on each day when one of the Applicants worked there was a separate ad hoc contract of employment between the Respondent and that particular Applicant. It was said then that in looking to compute the employee's period of employment, the Employment Tribunal should have determined that each day when an Applicant worked there was a contract of employment and that each of those contracts counted in computing the employee's period of employment. It was said that by reference to section 212 (1) and (3) all of those contracts of employment could be strung together to determine that the period of employment began with the first of them and ended with the last of them. It was submitted that the Tribunal erred in looking only at the issue of mutuality and that it looked at the issue of mutuality simply because erroneously it was looking to see if there was a single continuous contract of employment, in the same way as the House of Lords had looked in the Carmichael case.
15. In the course of an erudite address the Applicant's representative referred us to a number of cases apart from the Carmichael case. These were Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497, Nethermere (St Neots) Ltd v Taverna and Gardiner [1984] IRLR 240, O'Kelly and others v Trusthouse Forte PLC [1983] IRLR 369, and Hall (H M Inspector of Taxes) v Lorimer [1994] IRLR 171. Grateful though we are for the interesting exploration of those cases, we do not think that they assist the Applicants in their attack on the Decision of the Tribunal.
16. It is clear to us that the Employment Tribunal had well in mind the points which were being made to it on behalf of the Applicants. In our judgment, the Tribunal was well able to distinguish, and in its decision did distinguish, between a single overarching contract of employment and a series of contracts of employment to be taken together for the purpose of considering the statutory concept of a period of employment. It appears likely that the argument was put in rather different terms to the Tribunal from the way in which it was put to the Employment Appeal Tribunal, but the substance of it was in our judgment clearly apparent to the Employment Tribunal. The Tribunal was struck by the lack of mutuality. There was no obligation to provide work, nor was there any obligation to take work up. Of course, once a cutter was within the factory gates she was obliged to do the work required of her, just as any other person providing services would be expected to provide the services that they contracted to provide. That does not mean that the cutters were employees under a series of contracts of employment undertaken day by day as they happened to chose to turn up when work was available.
17. In order to determine whether a person is an employee, one does not go through a mechanical exercise of running through items on a checklist to see whether they are present in or absent from a given situation. The object of such an exercise is to paint a picture from the accumulation of detail, but the overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It was for the Employment Tribunal to evaluate the overall effect of detail. It was this that the Tribunal did. The Tribunal was perfectly entitled to take the view that in reality there was no series of individual contracts of employment day by day. It cannot be said that the Tribunal erred in law in its appreciation of the totality of the evidence, nor can it be said that the Tribunal was seduced by the concept of there being a single overarching contract.
18. Valiantly though the representative of the Applicants struggled, it seems to us that it cannot properly be said that was any error of law on the part of the Tribunal. This appeal is therefore dismissed.