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58
Appeal No: EAT/1017/00
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APPEARANCES
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For the Appellant |
MR
CLIVE SHELDON |
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For the Respondent |
MR
G.T. HAVELOCK |
JUDGE WILKIE QC:
1. This is an appeal by Stuncroft Limited against
the decision of the majority of the Employment Tribunal sitting at Bury St.
Edmunds on
2. The appeal is on two bases. The main basis is that the Tribunal erred as a
matter of law in concluding that there was a contract of employment in a
situation where the evidence was irrefutably that there was no mutuality of
obligation as between Mr Havelock and Stuncroft
Limited. Their secondary argument is that insofar as the Tribunal carried out
an exercise in considering the various factors pointing to, and away from,
there being a contract of employment, their decision was perverse. As matters
have transpired we have not found it necessary to ask Mr Sheldon, who appears
for the appellant, to advance that secondary argument. We may say without
having had the advantage of submissions, as we think he understood,
that would have been very much an uphill struggle given the careful and full
treatment which the various factors had received from the Tribunal in its
decision.
3. However the appeal turns on a single issue which Mr Sheldon has rightly
characterised as a knockout blow if he succeeds.
It turns on one particular piece of compelling evidence or, at any rate, one
compelling admission made by Mr Havelock in a letter of 30 April 2000 sent to
the solicitors acting on behalf of the appellant, where he says in terms:
"Whilst I agree
that I was not obliged to accept work from Stuncroft
Limited, the work was usually offered to me at a very short notice. I would be
called for example on a Friday afternoon before
4. The majority of the Employment Tribunal approached the question whether
there was a contract of employment by taking into account all the factors and
balancing them against one another. The majority found that there was a
contract of employment. In paragraph 8 of the decision the Chairman, who was
the minority, says that he took a different view on the question of balancing
the factors. He says that the lack of mutuality of obligation in particular
was a persuasive factor, together with the
characterisation of the relationship by both parties as
self-employment. He accepted that such characterisation
was not a tax avoidance device and had been accepted by the tax and National
Insurance authorities as appropriate over some period. He concluded that those
factors persuaded him to the opposite conclusion to the majority.
5. The Chairman was relying on the admission in the letter of 30 April that
the applicant accepted that he was not obliged to accept that which was given
to him.
6. Mr Sheldon has taken us carefully through the recent authorities on the
question whether want of mutuality of obligation is fatal to the existence of
a contract of employment, that is to say, that there has to be an irreducible
minimum of mutual obligation necessary to create a contract of service. He has
referred us to the House of Lords decision in
"If this appeal turned exclusively-and in my judgment it does not-on the true meaning and effect of the documentation of March 1989, then I would hold as a matter of construction that no obligation on the C.E.G.B. to provide casual work, nor on Mrs Leese and Mrs Carmichael to undertake it, was imposed. There would therefore be an absence of that irreducible minimum of mutual obligation necessary to create a contract of service."
The Lord Chancellor then referred to two Court of Appeal decisions (Nethermere (St Neots) Ltd v Gardiner [1984] IRLR 240 and Clark v Oxfordshire Health Authority IRLR 125).
7. Mr Sheldon has taken us to each of these cases which establish the same
point, namely, that there is an irreducible minimum of mutual obligation
required for there to be a contract of employment. In addition, he has
referred us to a decision of the Court of Appeal, subsequent to the
Carmichael case, Stevedoring & Haulage Services Ltd v Fuller [2001]
EWCA Civ 651, which is reported in 2001 IRLR 627,
in which the point is made with great clarity that where there is no mutual
obligation then there is not the irreducible minimum necessary to create a
contract of service. The Court of Appeal in that case warns Employment
Tribunals against an over-astute exercise in implying such mutual obligations
where the express documentation does not permit it, in cases where consistent
behaviour on the part of the parties to the
arrangement tempts the Tribunal to imply mutual obligations where none exists
as a matter of law.
8. It is clear that the Employment Tribunal in this case did not have the
advantage of having cited to it any of these authorities nor does it
appear, that the case was argued on the basis that
want of mutual obligation was a knockout blow. Certainly the majority did not
consider the question of the want of mutuality of obligation at all and the
minority Chairman, in our judgment mistakenly regarded
want of mutuality of obligation as merely a persuasive factor whereas
repeatedly the courts at Court of Appeal level and above have said that it is
an irreducible minimum and so a determinative issue.
9. In the light of the weight of authority and, we may say with a deal of
regret, we feel obliged to conclude that Mr Sheldon's arguments are
unanswerable and although Mr Havelock, in his short oral submission to us and
in his longer written skeleton has striven manfully to overcome the weight of
authority which is against him, we are obliged to conclude that he has not
succeeded and therefore we are obliged to uphold this appeal.
10. One matter which we did consider was whether, given that the Tribunal
appears not to have considered the issue at all in its conclusive effect on
this case, this was a case where we should remit the case to the same Tribunal
or a new Tribunal for fresh evidence to be given. However, again with some
regret, we feel that that is not open to us in the light of the very clear and
unambiguous statement by Mr Havelock in the letter of 30 April which precludes
any possibility of getting round the fact that there was no mutuality of
obligation as between him and the appellants. It therefore follows that we
overturn this Tribunal's decision the effect of which is to dismiss Mr
Havelock's claim for a redundancy payment.