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	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Action Contracts (East Midlands) Ltd v Ablitt & Anor [2008] UKEAT 0568_07_1707 (17 July 2008) URL: http://www.bailii.org/uk/cases/UKEAT/2008/0568_07_1707.html Cite as: [2008] UKEAT 568_7_1707, [2008] UKEAT 0568_07_1707

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APPEARANCES

 

For the Appellant	MS T HETHERINGTON (of Counsel) Instructed by: Messrs Browne Jacobson Solicitors 44 Castle Gate Nottingham NG1 7BJ
For the First Respondent	MS J HARRISON (Solicitor) Messrs Chattertons Solicitors 30 Avenue Road Grantham Lincolnshire NG31 6TH
For the Second Respondent	No appearance or representation by or on behalf of the Second Respondent


 


SUMMARY

JURISDICTIONAL POINTS: Agency relationships

Agency worker complains of unfair dismissal against both the agency and the company to which she was "hired". Agency appeal against the Employment Tribunal's finding at PHR that she was their employee. The Employment Tribunal held to have misdirected itself in law as to tests for both mutuality of obligations and control. Remitted for re-hearing.

THE HONOURABLE MRS JUSTICE COX

1. We have all agreed that this appeal should be allowed and that this matter should be remitted for rehearing before a fresh Tribunal. On behalf of the Employment Appeal Tribunal I will now give our reasons for that decision.
2. The first Respondent below Action Contracts (East Midlands) Ltd (Action) is appealing against the judgment of a Nottingham Employment Tribunal, registered on 23 October 2007. After a pre-hearing review the Employment Judge, sitting alone, held that the Claimant, Janet Ablitt, was an employee of Action and was therefore entitled to bring proceedings against them for unfair dismissal. Action contend that the Employment Judge erred in law in a number of respects in arriving at that conclusion.
3. At the same pre-hearing review the Claimant was held not to be the employee of the second Respondent, Asfordby Storage & Haulage Ltd (Asfordby), against whom she had also claimed for unfair dismissal. The Claimant appealed against that finding and the two appeals were originally listed for a full hearing, to be heard together before us today. However, upon the Claimant and Asfordby having recently agreed terms of settlement, the Claimant has now been permitted to withdraw her appeal. Asfordby have indicated that they adopt an entirely neutral position in relation to Action's appeal. They have therefore taken no part in that appeal and have neither appeared nor been represented before us.
4. It is relevant, by way of background, to point out that in her claim form issued against both Respondents the Claimant herself stated that she had a temporary worker assignment contract with Action but had always worked for Asfordby. After describing the incident which led to her claim of unfair dismissal and breach of contract (notice pay) against both Respondents, she concentrated, at paragraph 8, on the matters alleged to show that the Tribunal had jurisdiction to hear her claim against Asfordby. Her allegations relating to the existence of an implied contract, mutuality of obligation, control and other aspects of the relationship which she claimed pointed to her being an employee, were all made against Asfordby and not Action.
5. In their brief response, in their ET3, Action stated simply that the Claimant was not an employee and that all the work undertaken by her was performed under a contract for services. Asfordby, in their detailed grounds of resistance, which were ultimately successful, set out the matters relied upon as rebutting the Claimant's allegations in paragraph 8 and denied that there was any contract of employment between them. The Employment Judge heard oral evidence from the Claimant, Norma Concar, Managing Director of Action, and from Michael Jackson and Michael Dolby of Asfordby, and considered a bundle of documents. The Claimant was represented by Ms Harrison, who has appeared on her behalf again today, but Action were unrepresented at the pre-hearing review.

The Facts

6. It was not in dispute that, through Action, this Claimant began working as a process worker at Asfordby's warehouse premises in Melton Mowbray on 6 September 1999. She worked as a packer, placing products supplied by Asfordby's clients into multi-packs and apparently operating a shrink wrapping machine. She worked Mondays to Fridays between 3.00 pm and 11.00 pm. The Employment Judge found that as at the date of termination she was paid £5.35 an hour. Action paid her salary, sick pay, and holiday pay while she worked at the warehouse. She would contact Action, not Asfordby, if she was unable to attend work because of illness. She arranged leave with Action, not Asfordby.
7. It was not in dispute, although not referred to in the Reasons, that there were occasions when the Claimant would leave the warehouse on the grounds that there was no work available. Documentary evidence before the Tribunal, now at pages 178 to 187 of our bundle, recorded her attendance between 1999 and January 2007 and showed occasions when she had not worked on the grounds that there was no work for her to do. During 2006 there were apparently 31 such occasions.
8. Asfordby's business is the storage and transport of various products. They operate a fleet of about 40 heavy goods vehicles. The Employment Judge found that for over ten years they had had a requirement for agency workers in their co-packing project, which packages products supplied by its major client into multi-packs. The number of agency workers was determined by the volume of work. At peak times 300 a day had been employed and at the time of the hearing a daily average of between 50 and 80 were employed. They used four agencies, including Action, to supply these workers. Usually on a Tuesday Mr Jackson asked the agencies to supply workers for the following week based on an estimate of Asfordby's requirements. He could not require that a particular worker be provided but he could specify the type of work to be undertaken. Sometimes requirements changed rapidly and he had cancelled the agency workers booked on the day itself. On occasions the Claimant acted as co-ordinator in such circumstances and would choose the agency workers who had to leave. Sometimes she volunteered to leave herself. On other occasions Mr Jackson had asked an agency to supply workers on the same day.
9. If an agency worker was unable to work because of illness, holidays or some other reason Asfordby were not informed in advance. Further, Asfordby had no written contracts with any agency worker. They required an agency worker to sign a form providing general details and to complete a health questionnaire.
10. In or about April 2004 Action arranged for the Claimant to work for a company called Break Brothers for some two weeks and Asfordby were not consulted about this arrangement. It appears, apart from this spell with Break Brothers, however, that the Claimant had always worked at the Asfordby warehouse.
11. The Employment Judge set out in detail the various documents which featured in the evidence. On 10 September 1999 Action provided the Claimant with a statement of terms and conditions, the contents of which appear at paragraph 4.2 of the Reasons, as follows.

"STATEMENT OF TERMS AND CONDITIONS OF EMPLOYMENT PURSUANT TO THE EMPLOYMENT PROTECTION (CONSOLIDATION) ACT 1978

CONTRACT FOR CASUAL EMPLOYEES

…

3 NAME AND ADDRESS OF EMPLOYEE

…

The services you are to provide to the company are on an hourly and causal basis. This means that while the company will try to give you as much notice as possible when offering work, there is no obligation on the part of the company to provide such work nor for you to accept any work so offered.

You are not an employee of the company and are not entitled to any fringe benefits such as sick pay, holidays or pension rights.

You will be paid only for the hours actually worked at the rate stated above and it has agreed with the Inland Revenue that there will be deductions of income tax in the same way as if you were an employee, but this is for administrative convenience only."

12. During 2006 the Claimant was asked by Action to sign various contractual documents, being told that this was necessary for the purposes of Action's compliance with new legislation. On 26 June 2006 she was provided with, and signed, a statement of terms and conditions set out at paragraph 4.10 of the Reasons, which provided as follows:

'STATEMENT OF TERMS AND CONDITIONS OF EMPLOYMENT PUSUANT TO THE EMPLOYMENT PROTECTION (CONSOLIDATED) ACT 1978

CONTRACT FOR CASUAL EMPLOYEES

…

3 NAME AND ADDRESS OF EMPLOYEE

…

The services you are to provide to the company are on hourly and casual basis. This means that while the company will try and give you as much notice as possible when offering work, there is no obligation on the part of the company to provide such work nor for you to accept any work so offered.

You are a casual employee of the company and are not entitled to sick pay, holidays or pension rights.

You will be paid only for the hours actually worked at the rate stated above and it has been agreed with the Inland Revenue that there will be deductions of income tax contributions and NIC."

13. On the following day, 27 June, she signed a further document entitled, "Terms and Conditions of Engagement"; the terms of which are set out at paragraph 4.11. They read as follows:

"You will be engaged on a casual basis to work for [the First Respondent].

Although you are casual, [the First Respondent] is required by law to deduct tax and National Insurance from your earnings.

You may be required to carry out the following kinds of work:

Packing, feeding lines, stacking, cleaning at: [the Second Respondent].

While every effort will be made to find you work we cannot guarantee that work will always be available.

…

If you are unable to work on any day which you have been allocated work, you will be expected to telephone [the First Respondent] as early as possible on the day or (in the case of absences for two or more consecutive days) on the first day of such absence and inform [the First Respondent] of the reason for absence and it's likely duration. This is to ensure that [the First Respondent] meets any commitments it may have with the company wishing to hire your services.

…

If there is any dispute between you and the hiring company, or any individual employed by a hiring company, you will notify [the First Respondent] at the earliest opportunity. We will then attempt to resolve the dispute or, if it cannot be resolved, seek to arrange for you to work for some other hirer."

14. Finally, Action asked her to sign another agreement in July 2006 which was drawn up at the request of the Gangmasters Licensing Authority and was apparently drafted by solicitors. The terms of this agreement signed by both parties on 17 July 2006 are set out at paragraph 4.12 of the reasons as follows:

"This contract contains the terms under which [the First Respondent] engages you as a temporary worker under a contract for services. The following terms are in accordance with the Conduct of Employment Agencies and Employment Business Regulations 2003 ('the Regulations') and the Gangmasters (Licensing Conditions) Rules 2006 ('The Rules').

1. The Company operates as an employment business for the purposes of the Regulations.

Duration of Contract

2. You will work for the Hiring Company named in the Hiring Company Information Schedule (as amended from time to time).

Hours of Work

3. Your hours of work are as detailed in the Hiring Company Information Schedule (as amended from time to time).

Work Assignment

4. You will be undertaking the type of work with the Hiring Company as detailed in the Hiring Company Information Schedule (as amended from time to time). The type of work [the First Respondent] will seek to find for you is factory.

5. There is no obligation on the part of [the First Respondent] to provide work and there is no obligation on you to accept any work that is offered.

…

9. Your rate of pay will be as notified to you from time to time, although the minimum rate will not be less that the minimum statutory rate applicable to you from time to time.

10. The minimum rate of pay under this contract is £5.05 per hour.

11. You will be paid only for hours actually worked at the rate stated above.

12. Any payment will be subject to PAYE deductions.

13. You will be paid by [the First Respondent] regardless of whether [the First Respondent] itself received payment for your services from the Hiring Company.

Holiday and Statutory Sick Pay

14. Your entitlement to annual holidays will be in accordance with the terms of the Working Time Regulations 1998 or any amendments to those Regulations. Currently that entitlement is four weeks a year (January to December) and pay is calculated on the basis of an average over the previous 17 weeks worked.

15. Subject to certain limits and conditions you may be entitled to receive Statutory Sick Pay in respect of absences due to sickness or injury at the appropriate rate.

Notice

16. [The First Respondent] or you may terminate this contract at any time without notice, although [the First Respondent] may, at its absolute discretion, provide you with a period of notice that it intends to terminate your contract.

17. If you are unable to work on any day on which you have been allocated work, you will be expected to telephone [the First Respondent] as early as possible on the day or (in the case of absence for two or more consecutive days) on the first day of such absence and inform [the First Respondent] of the reason for absence and its likely duration. This is to ensure that [the First Respondent] meets any commitments it may have to the Hiring Company.

Notification of Dispute between you and the Hiring Company

18. If there is any dispute between you and the Hiring Company, or any individual employed by the Hiring Company, you will notify [the First Respondent] at the earliest opportunity. [The First Respondent] will then attempt to resolve the dispute or, if it cannot be resolved, seek to arrange for you to be assigned elsewhere.

…"

15. On the same day the Claimant signed a document entitled, "The Hiring Company Information Schedule to Work Assignment Contract" which stated that Asfordby was the hiring company and that the start date of the assignment was 6 September 1999.
16. We shall simply summarise the incident which led to the claim to the Employment Tribunal and with which we are not concerned in this appeal. Briefly, on 11 January 2007, the Claimant was accused of gross insubordination, aggressive behaviour and the use of foul language whilst at work. She was excluded by Asfordby from the warehouse premises. Asfordby then told Action not to send her again. The Claimant challenged this both orally and in correspondence with Asfordby. She then attended a meeting at the warehouse with Mr Jackson, with Mr Concar of Action also present, which was referred to as an
    "appeal" against her exclusion. She was, however, unsuccessful and subsequently Action gave the Claimant, at her request, a form P45 which stated that her leaving date was 10 January 2007.

The Tribunal Decision

17. The Employment Judge referred at paragraphs 5 to 9 to the statutory provisions relating to the definition of "employee" and "contract of employment" in s230 of the Employment Rights Act 1996. He then set out the long list of names of the well-known authorities on the topic, to which he was referred. It is, in our view, unfortunate that he did not then set out the legal principles to be gleaned from these authorities, which he had to apply in answering the question he then posed and answered at paragraphs 10 - 17; namely, was the Claimant employed by Action? This process would have ensured in our view that he was applying the right test to the facts he had found and asking himself the right questions. It may therefore have avoided the errors in his reasoning which we find to have occurred in this case.
18. His discussion of the issues and his conclusions, set out at paragraphs 10 to 17 of the Reasons, read as follows:

"DISCUSSION

Was the Claimant employed by the First Respondent?

10. Mrs Concar submitted that the relevant contract was dated 17 July 2006. She relied in particular on the following:- the contract was described as a 'Temporary Work Contract'; there was no obligation on the part of the First Respondent to provide any work to the Claimant and there was no obligation on the Claimant to accept work (clause 5); either party could terminate the contract without notice; there was no obligation for the Claimant to report to work (clause 17). Consequently there was no contract of employment. Further the fact that the First Respondent deducted tax and national insurance, paid sick and holiday pay did not mean the Claimant was an employee. Further the Claimant had not put forward any arguments as to why the Tribunal should disregard the express contractual position between the parties as set out in the contract.

11. Ms Harrison submitted that the terms of the Claimant's express contract with the First Respondent referred to her as an 'employee'. Mrs Concar agreed that she was an employee albeit a casual employee. The First Respondent paid the Claimant after deducting tax and national insurance; it also paid her sickness and holiday pay.

12. The Tribunal noted that Mrs Concar did not dispute that there was a contract between the First Respondent and the Claimant. It did not accept Ms Harrison's submissions that Mrs Concar had admitted that the Claimant was an employee. During cross examination in answer to a question relating to the statement dated 27 June 2006 Mrs Concar did confirm that the Claimant was a casual employee. However, on 17 July 2006 the Claimant and the First Respondent signed the Temporary Work Assignment contract which described the Claimant as a temporary worker under a contract for services. Mrs Concar submitted that this superseded the earlier statement (or contract). The Tribunal decided that it was necessary to determine what was the reality of the situation.

13. The Tribunal began by considering the three sets of documents signed by the parties. The two statements (or contracts) which predated the July 2006 document referred to her as 'employee'. Somewhat confusingly the 1999 document also asserted that she was not an employee and denied any obligation to provide or to accept work. The 2006 document again denied the lack of mutual obligation but also confusingly asserted that she was a 'casual employee'. Mrs Concar explained that the July 2006 document was drawn up at the request of the Gangmasters Licensing Authority. Solicitors had been instructed to draft the document.

14. The Tribunal then considered the substance of the relationship. By 17 July 2006 the Claimant had worked for the First Respondent for nearly seven years. During that period she had worked for the First Respondent when required. There was no evidence that she had, or would have, refused the work offered nor that she had, or could have, worked for anyone else. For at least part of that time she acted as the First Respondent's co-ordinator when on the Second Respondent's premises and had responsibility for deciding who should not work if the Second Respondent had overbooked. The First Respondent paid her subject to deductions for tax and national insurance. She arranged holiday leave with the First Respondent and notified it when she was unable to work because of sickness.

15. The Tribunal accepted the Claimant's evidence that she did not understand the nature of the document and that she only signed it because the First Respondent needed to comply with the new law. She did not appreciate that the document purported to change her status in a significant manner. Further, and even more importantly, Mrs Concar gave no evidence that it was the First Respondent's intention to change the Claimant's status.

16. In all the circumstances the Tribunal decided that the July 2006 statement (or contract) did not genuinely reflect the reality of the relationship which had endured for seven years. The earlier documents made clear that the Claimant was an employee. In reality there was a mutuality of obligation between the parties.

17. The Tribunal understood that the test for determining whether there was a contract of employment included the need for an irreducible minimum of control. In this case the Claimant performed the role of co-ordinator on behalf of the First Respondent and had authority to decide who should leave the Second Respondent's premises when there had been an overbooking. The Claimant had to notify the First Respondent when she was unable to work because of sickness. She also arranged holiday leave with it. In those circumstances the Tribunal found and decided that the degree of control was sufficient to constitute a contract of employment."

19. In answering the same question, subsequently, in favour of Asfordby the Employment Judge dealt with the Claimant's submission that the contract between the Claimant and Action was a sham, as was the contract between Action and Asfordby, holding as follows, at paragraph 20:

"The Tribunal accepted Mr Marsh's submission that there was no necessity for deducing an implied contract of employment. The arrangement was not a sham. The work undertaken and the conduct of the parties was wholly consistent with the agency arrangements and indeed reflected the reality of the situation. Although control could not of itself create an implied contract, the degree of control was explained by the agency arrangement. There was no mutuality of obligation. The Second Respondent could not insist on the First Respondent providing the Claimant; the Claimant could not insist on working for the Second Respondent."

20. Finally, at paragraph 22 he rejected the suggestion that the "triangular arrangements" between these parties justified a finding of "parallel" contracts of employment.

This Appeal

21. Ms Hetherington, on behalf of Action, raises two main grounds of appeal relating to the Tribunal's findings as to mutuality of obligation and control. She submits, firstly, that the Employment Judge misunderstood, or misapplied, the legal test for mutuality of obligation and erred in finding at paragraph 16 that there was in this case the necessary mutuality of obligation between these parties. She also submits, in summary, that he gave no consideration at all to the existence or not of any obligation on the part of Action to provide work for the Claimant; made no finding that the Claimant was obliged to accept work offered by Action; and failed to recognise the importance of the express terms upon which work was offered.
22. In considering her submissions, we agree with Ms Hetherington that, as appears principally from paragraphs 13 to 16 of his Reasons, this being a case involving casual work, the Employment Judge approached this issue on the basis that the relevant contract between the Claimant and Action was an umbrella contract governing the seven-year period during which the Claimant worked at the warehouse. The Employment Judge was clearly in these paragraphs considering the substance of their relationship over this entire period and the frequency with which the Claimant refused the work offered or worked for anyone else, rather than addressing the existence of individual contracts between them, covering each separate assignment to Asfordby, which would in any event raise questions of continuity of service during periods in which no contract was in place. Ms Harrison fairly accepted that this was the Tribunal's approach, although it appears that she had argued the individual contracts point in the alternative and has addressed us upon that matter in her submissions today.
23. It is well-established on the authorities and it is common ground before us that in order for a contract of employment to exist mutual obligations between the parties to it are essential. The employer must have an obligation to offer or to pay for a minimum amount of work for the employee, with a corresponding obligation on the part of the employee to accept work offered and to provide some work for the employer.
24. We have been provided, in this appeal, with a large bundle of authorities which reflect this much litigated area of employment law and we have been referred to a number of them today. The general principles are long established, well-known and have not been in dispute before us. Since we have formed a clear view on the facts of this case that the Tribunal erred in law and that the judgment cannot stand we do not consider that it would be of any great assistance to the parties, or to employment jurisprudence generally, to include in this judgment a lengthy recitation and analysis of all these authorities in explaining our conclusions. We shall therefore identify only the key authorities and passages which are relevant to our decision on the points raised.
25. In order to find an umbrella contract of employment covering a period of several years, and including periods when the employee is performing no work at all, the authorities in our view establish that the evidence must demonstrate the existence of this continuing mutuality of obligations between the parties in the periods between the individual assignments; see Carmichael & Anor v National Power Plc [1999] I WLR 2042 and the very recent decision of this Employment Appeal Tribunal in Postworth Ltd v Ashworth UKEAT/0183/LA (19/6/08) as a good example of this point.
26. In this respect it will be necessary for Employment Tribunals to examine carefully the agreements entered into by the parties and the express terms upon which the work was offered. If those terms negate the existence of such obligations then unless they are held to amount to a sham there will, in our view, be no scope for implying terms which are inconsistent with them, or contradictory; see Stevedoring & Haulage Services Ltd v Fuller [2001] IRLR 627.
27. Most recently, in the decision of the Court of Appeal in Consistent Group Ltd v Kalwak [2008] EWCA Civ 35 Rimer LJ, giving the lead judgment, said this at paragraph 40:

"It is not the function of the court or an employment tribunal to re-cast the parties' bargain. If a term solemnly agreed in writing is to be rejected in favour of a different one, that can only be done by a clear finding that the real agreement was to that different effect and that the term in the contract was included by them so as to present a misleadingly different impression."

28. Whilst we agree that an Employment Tribunal should always be alert to look at the reality of any obligations between the parties, concentrating on what actually happened from time to time may not always elucidate the full terms of the contract. Some care is necessary therefore in analysing the correct position on the evidence as a whole, including any express terms agreed between the parties; see Express and Echo Publications Ltd v Tanton [1999] ICR 693.
29. In the present case, as appears from paragraph 14 of his reasons, the Employment Judge concentrated on the length of time over which this Claimant had worked for Action when required. There is, however, no finding in that paragraph or indeed elsewhere in his judgment that there was an obligation either upon Action to provide work to the Claimant, or upon the Claimant to accept work offered to her. In concluding, at paragraph 16, that in reality there was a mutuality of obligation between these parties, the Employment Judge appears to us to have misunderstood the legal test or to have lost sight of the essential requirement of an obligation upon both parties to offer and to accept work.
30. Putting the written agreements to one side for the present, the evidence adduced below tends to indicate in our view the absence of such an obligation. We say that it is the evidence as far as we understand it because there has been some factual dispute before us as to what was or was not elicited in evidence below and matters have not been dealt with fully in the judgment. However, the log of the Claimant's attendance at the warehouse, as we have said, revealed many occasions when Action provided no work at all and there was no evidence that the Claimant made any complaint about that. Further, as the Employment Judge found at paragraph 4.4, the Claimant would sometimes volunteer to leave the warehouse on the occasions when there was not enough work to go around for all the workers who had been booked to turn up on a particular day. Whilst the Employment Judge states, in paragraph 14 that there was no evidence that the Claimant had or would have refused the work offered, that as it seems to us does not show that she could not have refused it if she had wished to and there is certainly no finding to that effect.
31. The same applies in our view to his statement that there was no evidence that the Claimant had or could have worked for anyone else. Since there was no evidence that she could not, and it is not suggested that any of the written agreements contain any clause preventing her from doing so, this does not seem to us to advance further the Claimant's case on mutuality of obligations. The fact that this Claimant appears to have had some freedom of choice in deciding whether to volunteer not to work on any particular day, to enable other workers to do so, tends to point away from an obligation to accept work when offered, which is an essential requirement of the test for mutuality of obligation.
32. It is correct, as Ms Harrison points out, that on these occasions the Claimant acted as the co-ordinator for Action when she was at the warehouse; and the extent and nature of her role as co-ordinator appears not to have been dealt with as fully as it should have been in the decision. There is, at any rate, a dispute about the extent of the evidence that was given below about the nature of that role.
33. However, we do not consider that this factor, on the evidence as we understand it at present, implies any obligation on her part to accept the work offered at the warehouse premises. Indeed it might tend to suggest the opposite, affording the Claimant an element of flexibility and choice as to when and how she worked. The same applies to the fact that the Claimant arranged her holidays with Action and notified Action of any sickness absence. Some members of this Appeal Tribunal are aware that this practice is relatively commonplace in the casual labour market and clauses containing the same or very similar words appear throughout the case law where these issues arise. These clauses have as their purpose, as the written agreements in this case made clear, the need for the agency to be able to calculate the numbers of workers necessary to carry out their own obligations to their clients.
34. Ms Harrison has drawn attention in the Respondent's Answer, and indeed in her skeleton argument and oral submissions, to the written agreements of September 1999 and June 2006, which state that Action would provide the Claimant with 37.5 hours of work per week, relying upon them as evidence of a continuing obligation to provide work. However, an examination of the agreements shows that the reference to 37.5 hours in them is simply a description of the normal hours of work to be worked, should a full week's work be offered and accepted. In any event, other terms in those same agreements refer expressly to the Claimant providing her services on an "hourly and casual basis" and with no obligation on Action to provide work. In fact, as the log shows, there were a number of occasions when Action did not provide the Claimant with 37.5 hours of work in any week, as we have already said. In fact, the Employment Agencies and Employment Business Regulations 2003 require workers to be provided with details of their hours of work and with relevant information; see Regulations 18 and 21.
35. In relation to the written agreements, Ms Hetherington's primary submission is that the Employment Judge erred in law in implying terms which were inconsistent with the express terms in the umbrella agreement. The Judge recognised, or appears to have recognised, that each agreement contained an express term negating any obligation upon the parties to provide work and to accept work offered. We agree with Ms Hetherington, that notwithstanding some other confusing aspects of the agreements as referred to by the Employment Judge, these express terms were clear.
36. The finding at paragraph 16 that the July 2006 agreement did not genuinely reflect the reality of the relationship is not, in our judgment, an adequate basis upon which to set aside the express terms of the parties' agreement. We find that the Employment Judge erred in finding as he did. We rely, in particular, upon the cases of Stevedoring v Fuller and Consistent Group v Kalwak already referred to above; see in particular paragraph 16 of the judgment of Rimer LJ.
37. Absent a finding that these terms, or the terms contained in the earlier agreements between these parties, amounted to a sham, which the Employment Judge did not find here and indeed he appears to have found to the contrary at paragraph 20, there was in law no scope for implying contradictory terms as to mutual obligations. If there is to be such a finding it must of course be clearly set out and clearly explained. There is no such finding in this case. Nor is there any finding, as there would have to be, that the parties intended their written agreements to give a false impression to third parties. Nor did the Employment Judge find that the 2006 agreement amounted to a variation in the contractual arrangement under which this Claimant worked. At paragraph 15, he found expressly that there was no intention on the part of either party to vary the working arrangements, or to change her status in July 2006.
38. We would add, at this point, that the finding at paragraph 16 that the earlier documents made it clear that the Claimant was an employee seems to us to be unsustainable given that the 1999 agreement stated that she was not an employee and the June 2006 agreement referred to her being "engaged on a casual basis". This finding in our judgment was not open to the Employment Judge. In any event he gives no basis for such a finding.
39. Ms Harrison, in seeking to uphold the judgment below for the reasons given by the Employment Judge, refers to a number of authorities. She refers to the case of Cornwall County Council v Prater [2006] EWCA Civ 102, and submits that there was here sufficient mutuality of obligations on the basis that there was a series of individual engagements covering each shift that this Claimant worked. Once the Claimant was at work, she submits, she was obliged to attend work and to stay at work, to carry out the work offered, and Action was under an obligation to pay her for that work. The lack of mutual obligations when no work is being performed is, she submits, of little or no significance when determining the status of the individual when the work is performed. She referred also to the case of James v Redcats (Brand) Limited [2007] IRLR 296.
40. There is no dispute that Action paid the Claimant and no dispute that they deducted tax and national insurance from her pay. In all the circumstances the expectations of these parties, she submits, hardened into obligations and the finding as to mutuality of obligations should therefore not be disturbed. She referred in addition to Cotswold Development Construction Ltd v Williams [2006] IRLR 181 although that case was not in fact concerned with agreements containing express terms negating mutual obligations, as in this case. Ms Harrison contends that this Employment Judge was recognising the reality of the situation and the true nature of this relationship, having regard to the understanding and expectations of the parties and to the commercial realities.
41. In dealing with her submissions the fact, firstly, that Action deducted tax and national insurance from the Claimant's pay is irrelevant to the question to be determined since this is a statutory requirement for all agency workers. Nor does the decision in Clark v Oxfordshire Health Authority [1998] IRLR 125 assist her. In her oral submissions Ms Harrison developed an argument, relying on the Clark case, that there was evidence that this Claimant was on a retainer to Action in that she was paid during her lengthy periods of absence on holiday, or due to sickness, as shown on the log.
42. Of course the employer's obligation to provide work can equally be an obligation to pay for work. It must, however, be a contractual obligation to pay arising from the contract of employment. Since holiday pay and the payment of SSP are paid pursuant to legislative provisions, we agree with Ms Hetherington that this cannot be relevant to the question of whether there is an umbrella contract of employment. In any event, as the log shows, there were many other days when this Claimant was not working because there was no work available and it is not suggested that she was paid for any of these days.
43. More important, however, is that Ms Harrison's argument depends fundamentally on establishing that the reasoning of the Employment Judge, in relation to mutuality of obligations, proceeded on the basis of there being in this case a series of individual contracts rather than, as she fairly accepted in her oral submissions, on the basis of an umbrella contract extending over the seven-year working relationship between them. We agree with Ms Hetherington, and Ms Harrison effectively conceded the point, that this Employment Judge simply did not address his mind to the question of a series of individual contracts. Had he done so he would have had to consider the position in far greater detail given the background of umbrella written agreements over the years. He would also have had to decide whether it was necessary to imply the existence of such contracts in the face of the express agreements of 1999 and 2006 setting out as they did the type of work that the Claimant would carry out, her wages, her normal hours of work and the arrangements to be made in respect of sickness, absence and holiday pay. Ms Harrison accepts that necessity was not addressed by the Employment Judge in his judgment.
44. For these reasons, in our judgment, the finding of the Employment Judge as to mutuality of obligations between these parties was arrived at in error and on that basis alone his judgment cannot be sustained. We shall, nevertheless consider the second main ground of appeal, though perhaps more shortly than would otherwise be the case, in deference to the parties' submissions upon it and since in our view this case must now be remitted for re-hearing before a fresh Tribunal.
45. Ms Hetherington's second ground is that the Employment Judge erred in finding that the degree of control exercised by Action over the Claimant was sufficient for there to be a contract of employment between them. She submits in essence that he misapplied the legal test by failing to take into account the absence of any day-to-day control by Action and by taking into account factors that provided no evidence of control. Alternatively, she contends, that his conclusion as to control was perverse.
46. The Employment Judge set out his reasoning and conclusions in respect of control in one short paragraph, namely paragraph 17. In doing so we accept Ms Hetherington's submission that he inaccurately stated the legal test to be applied. This test, well-established on the authorities, is that a sufficient degree of control is an "irreducible minimum" for a contract of employment. A minimum amount of control is clearly not sufficient and it is difficult to know from the wording of paragraph 17 what this Employment Judge did consider was sufficient and how he applied the test to the facts.
47. McKenna J in Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497 referred to control as including:

"… the power of deciding the thing to be done, the way in which it shall be done, the means to be employed in doing it, the time when and the place where it shall be done. All these aspects of control must be considered in deciding whether the right exists in a sufficient degree to make one party the master and the other his servant."

48. Much cited over the years since, this passage has remained the key expression of the control test in determining the existence of a contract of service. It is common ground that the absence of control, so defined, will usually be a decisive factor against inferring a contract of service; see Consistent Group Ltd v Kalwak at paragraph 75.
49. The exception, in cases of those highly skilled employees where the nature of their work means that direct and detailed day-to-day control may be unnecessary or inappropriate, does not arise in this case and Ms Harrison does not suggest otherwise. Of course, as Ms Hetherington accepts, it is possible for an agency to have sufficient control depending on the facts in any particular case. However, in the EAT decision in James v Greenwich Council [2007] ICR 168 Elias P said:

"It is plain that whilst of course every case turns on its own particular facts, it will be an exceptional case where a contract of employment can be spelt out in the relationship between the agency and worker. Typically, the agency does not have the day to day control which would establish such a contract."

50. Further, rights to direct the worker where he or she is to work and to terminate a working arrangement cannot by themselves amount to sufficient control to constitute a contract of service. If it were otherwise then as the President recently pointed out in the Postworth case every agency worker would be an employee.
51. The reasons given by the Employment Judge in paragraph 17 for deciding that the control test was satisfied in this case are the Claimant's role as co-ordinator for Action; and the requirements that she notify Action of sickness absence and arrange with them her entitlement to holiday leave. We have referred already to the requirements relating to sickness and holiday leave, which were expressly included in the written agreements to enable the efficient and practical administration of Action's own obligations to its clients, including Asfordby. The Employment Judge made no finding that the requirement of notification of sickness absence was there to enable Action to exercise what Ms Hetherington described as managerial or disciplinary powers over the Claimant and we have seen no evidence which could support such a conclusion. Nor does the requirement to arrange holiday leave suggest on its own that Action could exercise any control over when the Claimant could take her holidays or as to the length of her leave.
52. Ms Harrison referred in the Respondent's Answer to this appeal that Action could deny her days off. This, however, is not a finding made by the Employment Judge. We understand that it is denied by Action, who also dispute that it was raised in the evidence below. We cannot therefore have regard to it in this appeal.
53. In relation to the Claimant's role as co-ordinator, we have been referred to a note of the evidence relating to this below from both the Claimant and Mrs Concar for Action. Parts of that note relating to evidence that the Claimant asserts was given below as to her involvement with wage slips and the handling of cash are not agreed and for that reason cannot be relied on in this appeal. We do not have any notes of evidence from the Employment Judge and there has been no application to obtain them. There are other factual statements in the Respondent's Answer and in Ms Harrison's skeleton argument relating to the Claimant receiving extra pay for her co-ordinating duties; to her having some sort of supervisory role over the workers whom she was co-ordinating, and a role in liaising with Action over the provision of transport; and to Action providing her with safety boots. There were, however, no findings by the Employment Judge as to any of these matters, which are not accepted and which it is said were not raised in evidence below. To these matters in addition, whilst they may be of significance in relation to the Claimant's role or roles and to the issue of control, we can have no regard in this appeal.
54. According to the findings in the judgment the evidence was that from to time this Claimant voluntarily acted as co-ordinator in deciding which workers supplied by Action would work on days when there had been over-booking. In that capacity she would decide on occasions that she herself would not work but there is no evidence that she had to agree this with Action.
55. Ms Harrison points to the fact that it was Action who informed the Claimant that she was no longer to be sent to the warehouse. However, in our judgment, this was the inevitable consequence of Asfordby's decision to exclude her when she was not on the premises, and their report to Action that she was not to return. It was of course Asfordby, not Action, who initiated the disciplinary action against the Claimant and who decided to exclude her, a relevant factor to which the Employment Judge does not refer at paragraph 17.
56. Reliance is also placed by Ms Harrison on the requirement in the written agreements that the Claimant notify Action of any dispute with the hiring company so that Action could attempt to resolve the dispute or arrange alternative work. This, she submits, was tantamount to a grievance procedure. We do not agree. This requirement does not suggest control of the kind required to found a contract of service. The benefits to be gained from ensuring the continued smooth operation of the working relationship through such a requirement do not, in our view, support a finding that Action controlled the Claimant's relationship with Asfordby or could require her to continue to work for them if, for example, attempts to resolve a dispute broke down at any stage.
57. In our judgment the Employment Judge inadequately analysed the issue of control at paragraph 17 and Ms Harrison conceded fairly in her submissions, that the decision was not particularly clear. The Employment Judge erred in his conclusion as to control for the reasons he gave and, as it seems to us, in failing to have regard to other evidence in the case which was relevant to this issue. This would include the Claimant's own case, as expressed in her claim form and her own evidence, as to Asfordby's exercise of day-to-day control over her work, Mr Dolby's evidence to this effect and of course the events which led to her exclusion. Further, we have been shown the terms of business between Action and Asfordby, which provided that Asfordby were responsible for ensuring that the workers were suitably skilled and qualified to operate the machinery and for ensuring compliance with health and safety obligations in the workplace.
58. If the Employment Judge did have regard to any or all of these factors then he failed to explain why he found them of no assistance in deciding the question of control. His conclusions in that sense are inadequately reasoned and fail the Meek test. On these grounds too this appeal is therefore allowed.
59. We mention, finally, that Ms Hetherington drew our attention to three other alleged errors of law, said to found an appeal. In particular the Employment Judge appears erroneously to have factored in the payment of tax and national insurance by Action, as we have already stated. Further, whilst length of service is a relevant factor, there is in our view merit in her submission that in this case the Employment Judge seems to have attached too much significance to a factor which is not in itself sufficient to indicate the existence of a contract of employment. Certainly it would need to be considered together with all the other factors to which we have referred, but which were not addressed by the Employment Judge in his analysis.
60. Finally, it is, we agree, curious that the Employment Judge makes no reference to the parties' own description of their arrangements. Whilst the label put upon a relationship is of course not determinative of its legal status it is a relevant factor to be considered and in this case, given the Claimant's own grounds of claim and evidence, as it appeared in her witness statement, we agree that there should have been greater investigation and analysis of this factor alongside the others, in the Employment Judge's reasoning.
61. For all these reasons we agree that this appeal must be allowed and must now be remitted for re-hearing before a fresh Tribunal.