PETER MCLEAN REID v NORTH WEST CEILINGS LTD T/A SHOPSPEC (2001)
Court: EAT (Mr
Recorder
Subject: EMPLOYMENT - CONTRACT
Descriptors: UNFAIR DISMISSAL : SELF-EMPLOYED : CONTINUOUS EMPLOYMENT : STATUS OF EMPLOYEES : PAYE : TAX DEDUCTIONS : NATIONAL INSURANCE CONTRIBUTIONS : S.230 EMPLOYMENT RIGHTS ACT 1996 : SUB-CONTRACTORS
Summary: Employment tribunals had to follow a recognised approach to the question of whether a worker's status was that of an employee or an independent contractor.
Text: Employee's ('R') appeal against the decision of an employment tribunal that R's period of continuous employment was insufficient to enable him to present a complaint of unfair dismissal against the respondent. R had worked as a shop fitter/joiner for the respondent from March 1994 and had worked exclusively on a number of the respondent's contracts as a supervisor. The tribunal found that R was under the respondent's control, was in no way involved in the profits and losses of the business and received full directions as to the work to be carried out. However, until March 1998 tax and national insurance were not deducted from R's salary and R had no holiday or sick pay arrangements with the respondent. The respondent employed other shop fitters/joiners during the period March 1994 to March 1998 who were employees subject to PAYE. By a majority the tribunal found that R had been self-employed from March 1994 to March 1998, when it was common ground that R had become an employee. R submitted that the tribunal's decision did not equate with the facts found.
HELD: (1) By virtue of s.230 Employment Rights Act 1996, an employee was an individual who entered into or worked under a contract of employment. The question of tax and national insurance liabilities was determined by a worker's status and was not determinative of that status. The sole potentially valid reason relied on by the tribunal was that R was not entitled to holiday, holiday pay or sick pay. However, many contracts of employment contained no such express provisions, particularly those entered into orally. Moreover, R did take holidays when he required them and when work was quiet. (2) Whether a worker was employed under a contract of employment was a question of mixed law and fact and a tribunal's finding on that issue could only be impugned if it could be shown that the tribunal could not reasonably have reached the conclusion under appeal, having correctly directed itself on the law (see O'Kelly v Trusthouse Forte (1983) IRLR 369). (3) The employment tribunal's decision could not stand for three separate reasons: (i) the tribunal had to evaluate the facts in accordance with the law and authority and it failed to state which, if any, recognised approach the majority had taken; (ii) the tribunal took into account as relevant and determinative factors that were not and could not have been which rendered the decision flawed; and (iii) the tribunal's decision was perverse because R was indistinguishable from many other workers who were engaged "on the lump" to do labouring work, in respect of whom it was recognised that they were employees and not independent contractors. (4) This court had no hesitation in concluding that R was undoubtedly an employee on the facts as found by the tribunal.
Appeal allowed. Case remitted for a further hearing.
Appearances: Tudor Williams of Tudor Williams & Co (Wrexham) for R. Mr J R Gregory instructed
by
D C Williams (
References:
LTL
Judgment: Transcript