O'Kelly and others v Trusthouse Forte pic

 

COURT OF APPEAL, CIVIL DIVISION SIR JOHN DONALDSON MR, ACKNER AND FOX LJJ 20, 21 JUNE, 20 JULY 1983

 

Master and servant - Contract of service - Distinction between contract of service and contract for services - nether issue of law or mixed fact and law - Jurisdiction of Employment Appeal Tribunal - Employment Protection (Consolidation) Act 1978, ss 136(l), 153(l).

 

The employers carried on a banqueting business at their hotel. Only a few of the banqueting staff were employed permanently under contracts of employment, the rest of the banqueting staff being casual workers engaged for each function, that being the usual practice in the catering industry. However a large number of the casual staff were so-called 'regular casuals', ie they were engaged on a regular basis by the employers to such an extent that some of them had no other regular work. Regular casuals were given priority of engagement over other casual workers. The applicants, who were three regular casuals, sought, through their union, recognition by the employers that regular casuals were permanent employees working under contracts of employment because of the length and continuity of their service and the manner in which they were paid. Thereupon the employers dismissed the applicants, who then complained to an industrial tribunal, pursuant to the Employment Protection (Consolidation) Act 1978, that they had been unfairly dismissed for taking part in trade union activities. On the question whether the applicants were working under a contract of employment within s 153(l) a % 456 @a of the 1978 Act and were thus entitled t( complain of wrongful dismissal, the industrial tribunal concluded that there was no overall contract between the parties and that the applicants were in business on their own account as independent contractors supplying services. The applicants appealed to the Employment Appeal Tribunal, which held that the question whether a contract was a contract of employment or a contract for services was a question of law and therefore under s 136(1)b of the 1978 Act the appeal tribunal had jurisdiction to hear the appeal. The appeal tribunal held, as had the industrial tribunal, that there was no overall contract of employment between the parties but further held that each separate contract entered into on the occasion of each engagement was a contract of employment. The employers appealed, contending (i) that whether a contract was a contract of employment or a contract for services was a question of fact and therefore the appeal tribunal had had no jurisdiction to hear the appeal, and (ii) that instead of itself considering whether there were separate contracts of employment the appeal tribunal should have remitted that issue to the industrial tribunal.

 

Held -(l)(Per Sir John Donaldson MR and Fox LJ) Where an appellate tribunal was limited to hearing an appeal on a point of law it had no jurisdiction to consider a question of mixed law and fact until it had distilled or extracted a question of pure law, since it was not entitled to intervene unless it was satisfied that the tribunal below had misdirected itself in law, and, if the tribunal below did not make any express direction as to the law, the appellate tribunal could only be so satisfied if it was satisfied that no reasonable tribunal, properly directing itself on the relevant questions of law, could have come to the conclusion under appeal (see p 476 e and p 477 f to j, post); Edwards (Inspector of Taxes) vBairstow [1955] 3 All ER 48 applied. (2)(Per Sir John Donaldson MR and Fox LJ) Although the formulation of the test of whether a contract was a contract of employment or a contract for services was a pure question of law, the application of the test so formulated to the relevant facts depended so much on the finding and assessment of the relevant facts and the precise quality to be attributed to them that the primary question was one of fact and degree. Accordingly, the appeal tribunal had been wrong to assume jurisdiction on the basis that the issue was a question of law. Furthermore, it was impossible to say that no reasonable tribunal, properly directed, could have reached the conclusion the industrial tribunal had come to and therefore on that basis also the appeal tribunal could not have assumed jurisdiction. It followed (Ackner LJ concurring on the facts) that the industrial tribunal's decision that there was no overall contract of employment between the employers and the applicants was not open to appeal (see p 473 d e, p 476 b cj toj, p 478 d toj, p 479 j to p 480 a c d, post); Simmons v Heath Laundry Co [ 1 9 1 0] 1 KB 543 followed; Currie v IRC [19211 2 KB 332 applied; dictum of Stephenson LJ in Young & Woods Ltd v West [1980] lRLR at 205 considered. (3) Furthermore (Ackner LJ dissenting), it was apparent on the facts that the industrial tribunal had considered the question whether there were separate contracts of employment between the employers and the applicants, and since there had been no misdirection by the industrial tribunal and its conclusion had not been unreasonable on the facts the applicants had no right of appeal on that issue. Accordingly, the employers' appeal would be allowed and the industrial tribunal's decision would be restored (see p 477 a to d, p 479 e toj and p 480 hj, post).

 

Notes For the nature of a contract of employment and the characteristics of the relationship of employer and employee, see 16 Halsbury's Laws (4th edn), paras 501, 520, and for cases on the subject, see 20 Digest (Reissue) 238-255, 2302 2407. For the jurisdiction of the Employment Appeal Tribunal, see 16 Halsbury's Laws (4th Edn) Para 1044. For the Employment Protection (Consolidation) Act 1978, ss 136, 153, see 48 Halsbury's Statutes (3rd edn) 593,610.

 

Addison vLondonPhilharmonic OrchestraLtd [1981] ICR 261, EAT.

Ahmetv TrusthouseForte CateringLtd(13 January 1983, unreported), EAT.

AirfixFootivearLtdi, Cope [1978] ICR 1210, EAT.

ConstructionIndustry TrainingBoardvLabourForce [1970] 3 All ER 220, DC.

Currie v1RC, Durantv1RC [1921] 2 KB 332, CA.

Edwards (Inspector ofTaxes) vBairstow [1955] 3 All ER 481[1956] AC 14,[1955] 3 WLR 11410, HL.

Ferguson vJohnDawson &Partners (Contractors)Ltd [1976] 3 All ER 817 [1976] 1 WLR 1213, CA.

Global PlantLtd v Secretary of Statefor Health and Social Security [19711 3 All ER 385,[19721 1 QB

139,[1971] 3 WLR 269.

Massey v Crown Life Insurance Co [1978] 2 All ER 57641978] 1 WLR 676, CA.

Melon vHectorPowe Ltd [1981] 1 All ER 313, HL.

Morren v Swinton andPendleburyBC [19651 2 All ER 349,[1965] 1 WLR 576, DC.

Nethermere (StNeots) Ltd v Gardiner [1983] ICR 319, EAT.

Pioneer Shipping Ltd v BTP Tioxide Ltd, The Nema [1981] 2 All ER 1030,[19821 AC 724,[1981] 2 WLR

292, HL.

Ready Mixed Concrete (South East) Ltd v Minister ofPensions and National Insurance [1968] 1 All ER

433,[19681 2 QB 497,[1968] 2 WLR 775.

Simmons vHeath Laundry Co [19101 1 KB 543, CA.

Union ofConstruction, Allied Trades and Technicians vBrain [1981] ICR 542, CA.

Wiltshire CC vNationalAssociation ofTeachers inFurther andHigherEducation [1980] ICR 455, CA.

Woods v kPMCar Services (Peterborough) Ltd [1982] ICR 693, EAT.

Young & WoodsLtd v West [1980] 1RLR 201, CA.

 

Cases also cited

Challiner v Taylor [1972] ICR 129, NIRC.

Coates vModernMethods &MaterialsLtd [1982] 3 All ER 9461[1983] QB 192, CA.

Devonald vRosser & Sons [1906] 2 KB 728,[1904-7] All ER Rep 988, CA.

Heathcote vHaunchwood CollieriesLtd (1917) 117 LT 677, HL.

MarketInvestigationsLtd vMznister ofSocial Security [1968] 3 All ER 732,[1969] 2 QB 173.

Martin v GlynwedDistributionLtd [1983] ICR 51 1, CA.

National CoalBoard v Galley [1958] 1 All ER 91,[1958] 1 WLR 16, CA.

Pedersen v CamdenLondonBorough [1981] ICR 674, CA.

Puttick vJohn Wright & Sons (Black-wall) Ltd [1972] ICR 457, NIRC.

Reardon Smith Line v Hansen-Tangen, Hansen-Tangen v Sanko Steamship Co [1976] 3 All ER

570,[1976] 1 WLR 989, HL.

Retarded Children'sAid Society vDay [1978] 1 WLR 763, CA.

 

Appeal and cross-appeal The applicants, Harry O'Kelly, Thomas M Pearman and Philip Florent (the respondents), who were regular casual workers in the banqueting business carried on by the appellants, Trusthouse Forte plc (the employers), at the Grosvenor House Hotel, applied to an industrial tribunal complaining that the employers unfairly dismissed them from their employment for taking part in trade union activities and applied for interim relief under s 77 of the Employment Protection (Consolidation) Act 1978. An industrial tribunal (chairman Mr G E Heggs) sitting at London Central directed the hearing of a preliminary point, namely whether the respondents were employees who worked under a contract of employment within s 153(l) of the 1978 Act (and thus were entitled to complain of wrongful dismissal and to claim interim relief). By a decision made on 31 March and 1 1 April 1983 the tribunal decided that the respondents were not employees who worked under a contract of employment within the 1978 Act because they were in business on their own account as independent contractors supplying services, and accordingly the tribunal decided that they were not qualified to claim interim relief under s 77 of the 14. 458 @a 1978 Act. The respondents appealed to the Employment Appeal Tribunal (Browne-Wilkinson J and Mr T D Anderson and Mrs M

 

L Boyle) which by a judgment given on 1 1 May 1983 allowed the appeal holding that even though the industrial tribunal were correct in deciding that there was no overall contract regulating the position between the respondents and the employers, nevertheless on each occasion that the respondents worked for the employers they entered into separate contract of service with the employers and accordingly the respondents were employees under contracts of employment within the 1978 Act and were qualified to claim interim relief under s 77. The employers appealed to the Court of Appeal. The grounds of the appeal were (1) that the appeal tribunal wrongly decided to consider for themselves whether the respondents were engaged under separate contracts rather than under an overall contract and ought in the circumstances to have remitted the separate contracts issue to the industrial tribunal. Alternatively, if it was proper for the appeal tribunal to consider the separate contracts issue they wrongly concluded that the separate contracts entered into were contracts of service, rather than for services, and were thus contracts of employment within the 1978 Act. (2) The appeal tribunal was wrong in holding that there was no evidence before the industrial tribunal to justify its findings that it was both parties' view that the relationship between them was not that of employer and employee, and that it was a recognised custom and practice of the catering industry that casual workers were engaged to work under contracts for services. By a respondents' notice the respondents gave notice that on the hearing of the appeal they would contend that the contracts of service found by the appeal tribunal to exist were continuous and not intermittent contracts. They also cross-appealed for an order that there was a continuing contractual obligation on the employers' part to offer them work as and when it was available and on the respondents' part to make themselves available for such work. The grounds of the cross-appeal were that the appeal tribunal wrongly held that on the facts found by the industrial tribunal there was no continuing mutuality of obligation between the parties and ought to have held (a) that economic forces did not negative but supported mutuality of obligation and/or (b) that the relationship of the parties was only or was best explicable as one of continuing mutual obligation. The facts are set out in the judgment of Ackner U.

 

Alexander Irvine QC and Timothy Charlton for the employers. Stephen Sedley QC for the respondents.

 

Cur adv vult

 

20 July 1983. The followingjudgments were delivered.

 

ACKNER LJ (giving the first judgment at the invitation of Sir John Donaldson MR). At the Grosvenor House Hotel the appellants (the employers) carry on two distinct operations. They operate an hotel and a restaurant business which is open to the public, and by reason of the regular and continuous nature of that business the staff engaged are all employees working under contracts of employment. The employers also carry on the business of hiring out rooms for private functions for which they provide the catering and other services. This part of the business is undertaken by the banqueting department. Because of the fluctuating and seasonal nature of this trade there are only 34 permanent staff, including the banqueting staff manager, Mr Hourigan, the bar manager, Mr Mardel, and the managerial and supervisory staff and the head waiters. All the other staff in the department are known as casual staff and they are paid at a set rate for the work actually performed. Because of the large number of casual staff required during the busy season and the difficulty of finding staff in sufficient numbers during the slack season Mr Hourigan maintains a list of some 44 wine butlers and 60 food service waiters and waitresses. They are known as 'regulars' and are rostered in preference to other casual staff, numbering between 200 and 300, who work less regularly and are employed for fewer functions. 14. 459 @a Th, ,regulars' are members of staff who can be relied on by the employers to offer their services regularly and, in return, have the assurance of preference in the allocation of an available work. They receive exactly the same rate of remuneration as other casuals, but have the ability to earn more money by being offered more frequent engagements, and there is more regularity in their earnings. 'Regulars' are offered any available engagement the slack season. Because of the extent of the work they are offered they may work longer hours than the permanent staff working a regular 40-hour week. Because of the extent to which they make their services available to the employers some 'regulars', including the respondents, have no other regular employment.

 

The employers' practice of staffing banquets and other functions with workers designated as casual staff is widespread throughout the hotel and catering industry in London, although there may be individual variations in rates and conditions. The staff are considered by the employers to be casual workers and not employees engaged under a contract of employment. The separate position of casual workers is recognised by the Wages Council and in App 2 to the current Wages (Licensed Residential Establishment and Licensed Restaurant) Order 1982 (Order LR(6 5)) a 'casual worker' is defined as meaning la worker who undertakes engagements on either an hourly or day to day basis and has the right to choose, without penalty, whether or not to come to work.' The respondents are members and stewards of the Hotel and Catering Workers' Union. They have made an application to the industrial tribunal for interim relief under s 77 of the Employment Protection (Consolidation) Act 1978, as amended by the Emplovme Act 1982. By their letter of 26 February 1983 they complain that the employers unfairly dismissed them from their employment at the Grosvenor House Hotel, London, and that their dismissal is to be regarded as unfair by virtue of s 58 of the 1978 Act, as substituted by the 1982 Act, that is to say, they were dismissed for an inadmissible reason, the alleged reason for the dismissal being that they were members of a trade union and had taken part in its activities. The industrial tribunal directed the hearing of a preliminary issue, namely whether or not the respondents were 'employees' who worked under a contract of employment within the meaning of s 153(l) of the 1978 Act, or whether they were independent contractors who worked under a contract for services. If the respondents were not 'employees' of the employers it followed that their complaint of unfair dismissal and their application for interim relief must necessarily fail. After a hearing which lasted some two days the industrial tribunal held that the respondents were not 'employees'. The respondents appealed to the Employment Appeal Tribunal, and after a hearing which lasted some three days it allowed the appeal, but gave leave to appeal to this court. Section 153(l) of the 1978 Act define 'employment' as being 'employment under a contract of employment'. It defines 'employee' as meaning 'an individual who has entered into or works under or (where the employment has ceased, worked under) a contract of employment'. It defines 'contract of employment' as meaning 'a contract of service or apprenticeship, whether express or implied, and (if it is express) whether it is oral or in writing'. This appeal therefore raises the familiar problem: were the respondents working under a contract of service or under a contractfor services? As the Employment Appeal Tribunal pointed out, just because a person is an 'employee' within the meaning of the 1978 Act, he does not automatically enjoy all the rights and protection accorded by the Act. For most purposes an 'employee' does not enjoy such protection unless he has a period of qualifying continuous employment with the employer against whom he brings his case, the most common example of which is the requirement that an employee shall have 52 weeks of continuous employment with that employer before becoming entitled to bring a claim for unfair dismissal. The period of continuous employment is calculated in accordance with the provisions of Sch 13 to the 1978 Act which, amongst other things, normally requires the minimum number of hours employment in each week in order for that week to be counted. However, there isi4. 460 @a one exception to the requirement for , qualifying period of employment: where the claim is based on dismissal for an inadmissible reason there is no minimum period before an employee may bring a claim for unfair dismissal (see s 64(3) of the 1978 Act); dismissal because of taking part in trade union activities is an inadmissible reason (see s 5 8(l) and (5)). So far as the respondents are concerned, Mr O'Kelly and Mr Pearman were wine butlers and Mr Florent was a dispense barman. They were 'regular' casuals in regard to whom the evidence established that in practice they worked virtually every week for hours varying in number from as little as three in some weeks up to as much as 57 in others. In the last year they each had only two weeks in which they did not work. Over this period of 52 weeks two had worked an average of 31 hours per week and one 42 hours per week. I join in the tribute which the Employment Appeal Tribunal paid to the industrial tribunal for the most careful way in which they investigated the facts and for the detailed grounds which it gave for its decision. They found that

 

,The principles on which a casual worker is employed are simple. There is no obligation for the worker to offer his services and there is no obligation for the employer to provide work.' The accuracy of this proposition, in so far as it related to 'regulars', was strongly contested before us. They continued:

 

'If an engagement is undertaken the worker is paid at the appropriate hourly or sessional rate for the work performed. During the function the casual worker works under the direction and control of the employer as part of his Organisation and the relationship ends automatically at the end of the function without the need of notice on either side. Many casual workers have other regular employment.' The industrial tribunal conveniently set out a number of headings under which they considered the facts of the case, and it would be convenient if I now referred to these in summary form. Engagement. Mr Hourigan has the responsibility of engaging casual staff for functions. He receives a list of functions for the following month and this is updated weekly on Thursday mornings. He prepares a list of wine service staff and a separate list of food service staff required for the following days. The lists are posted on Thursday evenings showing the names of the casual staff rostered for each function. Thus, the casual staff know what work, if any, is available for them for the week commencing on a Friday. During the slack period the lists are posted fortnightly. A similar roster of bar staff is prepared by Mr Mardel. Tax treatment and payment. The Inland Revenue requires the employers to deduct from the remuneration they pay to casual workers income tax under PAYE and social security contributions and to account to the Inland revenue for the money deducted. As a matter of necessary convenience the employers ensure that any casual staff working regularly at the hotel are entered on the computer payroll and they are paid weekly, in arrear, on Thursdays like any weekly paid employees. The industrial tribunal accepted that the tax and social security contributions are deducted as a requirement imposed on the employers by the Inland Revenue and that this is not, of itself, indicative of the legal basis of the relationship between the employers and the casual staff, for employment protection purposes. Holiday pay. Although casual workers were not assured of any regular work and received no sick pay and did not participate in the employers' pension scheme or enjoy any of the other fringe benefits accorded to their permanent staff, and they were not included in the annual pay review, casual workers had a holiday pay entitlement based on the number of full weeks worked during the preceding year. However, unlike the holiday pay entitlement of permanent staff, the payment was not made when they took their holiday but during the last two years it was paid to them at the commencement of the new banqueting season in September. The industrial tribunal accepted that it was in 14. 461 @a reality a discretionary incentive payment to workers who were prepared to continue offering thei services during the new season. Disciplinary and grievance procedures. The employers adapted their existing disciplinary and appeal procedure and recognised a formal grievance procedure for their casual staff. The industrial tribunal did not find that this was tantamount to recognising that the casual worker was an employee. They were merely using a fair procedure appropriate to a reasonable management and it said nothing about the underlying nature of the relationship. Incorporation in the Organisation. Casual workers in the banqueting department were supplied with jackets, as is the practice for permanent employees, and they worked under the direction and control of the head waiters. As a dispense barman, Mr Florent worked under the direction of Mr Mardel and the permanent dispense barman. As so much of the work in the department was performed by casual staff, the 'regulars' were introduced into the consultation process. Towards the end of 1982 the employers put forward the draft of a handbook for casual staff, in order to aquaint casual workers with general arrangements at the hotel and give information about conditions of engagement and procedures. The industrial tribunal were satisfied that the handbook, taken as a whole, referred only to casual workers and its provisions were consistent only with the casual worker status. Enforcing attendance. This part of the findings of the industrial tribunal is of crucial importance and it is worth setting verbatim paras 1 0 and 1 1 of their reasons:

 

'10. It is an essential feature of casual work that the worker has the right to choose, without penalty, whether or not to come to work. It is, however, necessary to the running of the banqueting business that the employer should be assured that a casual worker who has accepted an engagement does not withdraw at the last minute. As the employer has no obligation to offer future engagements he has the opportunity of exercising extremely effective control over attendance. The balance in the relationship exclusively favours the employer because a casual worker can be denied future engagements without reason given and without any form of inquiry or the right to be heard. 1 1. For a banqueting business operated on the scale of Grosvenor House it would clearly be impracticable to recruit casual workers on a daily basis. The publication of weekly rosters was not merely of convenience to the casual workers but it was of importance to Mr Hourigan to be assured in advance that all necessary staff were available and booked for each function. While the Fostering of staff might be considered as an offer of engagement for each of the functions, which a worker could decline by asking that his name be removed from the roster prior to the function, it is only a short step for the employer to exercise his dominant position to require a casual worker to accept an engagement he would prefer to decline. It was the uncontested evidence on behalf of the applicants [the respondents] that difficulty was experienced in securing variations to the published roster, that Mr Hourigan would raise objection to medical appointments, and that he was unsympathetic towards certified sickness. While the [employers] could have declined to offer any future engagements, the penalty imposed on "regulars" for non-attendance or other infractions was to "suspend" the worker from a limited number of future engagements, even if those engagements had been rostered and therefore impliedly accepted by the worker. We did not have the benefit of Mr Hourigan's evidence, and the fact that he may have exceeded his authority does not in itself alter the contractual nature of the relationship, but we refer to the system as indicative of the fact that the freedom to choose whether or not to come to work, if Mr Hourigan wanted the individual to work, was more apparent than real if that individual wished to continue working at the hotel. A "regular" had to conform with the requirements of Mr Hourigan both in respect of rostered engagements and future engagements or he would risk losing his assured livelihood. In the context of 'i4. 462 @a casual work for these or any other employees the expression "without penalty" has little practical meaning when the consequences of failure to attend can so nearly imply an obligation to attend.' Acts exempli)@ing the understanding of the parties . The industrial tribunal, though accepting that the understanding of the parties was only one of the relevant factors since they may well be mistaken and the relationship may alter as a result of developments, made the following findings. From the commencement of their engagement the respondents were treated by the employers as casual staff on terms and conditions entirely distinct from those accorded to the wine butlers and dispense barmen who were permanent employees and issued with written contracts of employment. The respondents were aware of the distinction and did not challenge it. It was not until October 1982 that Mr O'Kelly and Mr Pearman first raised the question of contracts of employment with Mr Green, one of the employers' senior managers. They asked that the casual wine butlers should be classified as full-time staff 'because of the hours we done'. Mr O'Kelly said that he was seeking recognition as 'permanent employees', but Mr Green said,'No, we were casual'. After that Mr O'Kelly raised the matter with the union, it being his wish to obtain recognition of a change in the status of the employment in order to obtain the benefits accorded to permanent employees. The industrial tribunal referred to the correspondence from Miss T A Gudgin, the union's recruitment officer for London hotel and catering establishments, and concluded that Miss Gudgin was seeking an alteration in the prevailing legal status of casual workers involving them being issued with contracts of employment to which they would not otherwise be entitled. In March 1983 Mrs Gill, legal officer for the union, wrote to the employers' solicitors setting out four grounds on which the respondents based their claim that they were employees:

'I. They are regularly called upon to serve at banquets according to rota arrangements which are posted a week in advance. 2. They normally work over 16 hours a week. 3. They are paid weekly and tax and national insurance is deducted by your clients. 4. They receive holiday pay.' It was thus, said the industrial tribunal, a claim based on length and continuity of service and the manner of payment. It noted that despite discussing the basis of a claim for some two months it was not the respondents' assertion that there was a mutual obligation to provide and perform work. I observe that no alternative was then

 

raised of employment by successive individual contracts of service. Before the industrial tribunal the submission was made on behalf of the respondents that the 'regulars' were employees because they were provided with regular and frequent work on the basis of weekly engagements, with a build-up of holiday entitlement over the year. The contention was that there was no freedom to refuse work and accordingly there was an implied obligation on the part of the employers to provide work. The industrial tribunal did not accept that it was necessary to imply an obligation to provide work in order to give business efficacy to the contract. They stated:

 

'The rights and obligations of casual workers and employers are well established by the custom and practice of the trade. In return for making their services available, the "regulars" were assured of preferential treatment in the allocation of work. There was mutual advantage to the parties of which both were well aware, and it is not necessary to imply any terms, even if they could be expressed with precision, to give business sense to the arrangement ... It would be impossible in an objective sense to draw a line between the time when an individual ceases being a casual worker disentitled to protection and a "regular" who is to be considered an employee.' It is common ground that the industrial tribunal's approach was not open to criticism. % 463 @a It was in thesc terms:

 

,The tribunal should consider all aspects of the relationship, no single feature being in itself decisive and each of which may vary in weight and direction, and having given such balance to the factors as seems appropriate to determine whether the person was carrying on business on his own account.' In making their assessment, the industrial tribunal took into account the following factors which they considered consistent with a contract of employment: (a) The respondents provided their services in return for remuneration for work actually performed. They did not invest their own capital or stand to gain or lose from the commercial success of the functions organised by the banqueting department. (b) They performed their work under the direction and control of the employers. (c) When the casual workers attended at functions they were part of the employers' Organisation and for the purpose of ensuring the smooth running of the business they were represented in the staff consultation process. (d) When working they were carrying on the business of the employers. (e) Clothing and equipment were provided by the employers. (f) The respondents were paid weekly in arrear and were paid under deduction of income tax and social security contributions. (g) Their work was organised on the basis of a weekly rota and they required permission to take time off from rostered duties. (h) There was a disciplinary and grievance procedure. (i) There was holiday pay or an incentive bonus calculated by reference to past service. The following additional factors in the relationship the industrial tribunal considered were not inconsistent with the contract of employment: 0) The respondents were paid for work actually performed and did not receive a regular wage or retainer. The method of calculating entitlement to remuneration is not an essential aspect of the employment relationship. (k) Casual workers were not remunerated on the same basis as permanent employees and did not receive sick pay and were not included in the employers' staff pension scheme and did not receive the fringe benefits accorded to established employees. There is, however, no objection to employers adopting different terms and conditions of employment for different categories of employee (eg, different terms for manual and managerial staff). (1) There were no regular or assured working hours. It is not a requirement of employment that there should be 'normal working hours'(see Sch 3 to the 1978 Act). (in) Casual workers were not provided with written particulars of employment. If it is established that casual workers are employees there is a statutory obligation to fumish written particulars. The following factors were considered by the industrial tribunal to be inconsistent with a contract of employment: (n) The engagement was terminable without notice on either side. (o) The respondents had the right to decide whether or not to accept work, although whether or not it would be in their interest to exercise the right to refuse work is another matter. (p) The employers had no obligation to provide any work. (q) During the subsistence of the relationship it was the parties' view that casual workers were independent contractors engaged under successive contracts for services. (r) It is the recognised custom and practice of the industry that casual workers are engaged under a contract for services. I shall return later to deal in some little detail with the third category, because this has given rise to a substantial degree of controversy. The majority decision of the industrial tribunal was in these terms:

 

'It is freely recognised that the relationship of the [respondents] to the employers had many of the characteristics of a contract of service. In our view the one important ingredient which was missing was mutuality of obligation. The [respondents] entered into their relationship with the employers in the expectation that they would be provided with any work which was currently available. It was a purely commercial transaction for the supply and purchase of services for specific events, because there was no obligation for the [employers] to provide further work 14. 464 @a and no obligation for the [respondents] to offer their further services. By making themselves available on a regular basis the [respondents] had the prospect of enhanced profit for themselves. If they could obtain more regular and profitable work elsewhere they were free to take it. The [respondents] were in no different position than any independent contractor who offers his services for a particular purpose or event (eg, a jobbing gardener or a day Tabourer) and it was by their choice that they made their services available to a single customer. Where the commodity offered is the simple supply of semi-skilled labour for a specific occasion, or series of occasions, it is not to be expected that there would be a financial investment or participation in the profits or losses of the business. We are, of course, aware that lack of mutuality of obligation is not, in itself, a decisive factor and that outworkers can, in appropriate circumstances, be employees working under a contract of employment, even though there is no obligation to provide work or perform it: see Airfix Footivear Ltd v Cope [ 1 978] ICR 12 1 0 and Nethermere (St Neots) Ltd v Gardiner [1983] ICR 319. Nevertheless, this was a factor on which we placed very considerable weight in making our assessment. What is required of us in these proceedings is to determine the nature of the contractual relationship between the parties. This is not the description which the parties give to their relationship but the nature of the engagement resulting from the terms (whether express or implied) of their mutual agreement. No detailed terms were discussed at the time of engagement because there was no need to discuss them. All parties were fully aware of the custom and practice of the industry that casual workers were not considered to be employees working under a contract of employment. They entered into and continued the relationship on that understanding until Mr O'Kelly and the union attempted to negotiate an alteration in the fundamental basis of the relationship. As Lord Denning MR said in Massey v Crown Life Insurance Co [19781 2 All ER 576 at 580,[1978] 1 WLR 676 at 680: "It seems to me on the authorities that, when it is a situation which is in doubt or which is ambiguous, so that it can be brought under one relationship or the other, it is open to the parties by agreement to stipulate what the legal situation shall be. That was said in Ready Mixed Concrete (South East) Ltd v Minister ofPensions and National Insurance [1968] 1 All ER 433,[1968] 2 QB 497 in 1968 by MacKenna J. He said ([1968] 2 QB 497 at 513)'If it were doubtful what rights and duties the parties wished to provide for, a declaration of this kind might help in resolving the doubt and fixing them in the sense required to give effect to that intention.' So the way in which they draw up their agreement and express it may be a very important factor in defining what the true relation was between them. If they declare that he is self-employed, that may be decisive." We conclude that when the parties embarked on their engagement pursuant to the known custom and practice of the industry, it was indicative of their intention not to create an employment relationship.' The majority decision concluded by stating that custom and practice is not, in itself, decisive because each case must be determined on its individual facts and the evidence may indicate that other developments occurred to alter the status of the relationship. However, they considered that it would be irresponsible lightly to disregard the clear evidence of the intentions of the parties derived from an engagement under custom and practice, because this could have widespread and damaging repercussions throughout the whole industry. In the industrial tribunal's judgment the respondents were in business on their own account as independent contractors supplying services and were not qualified for interim relief because they were not employees who worked under a contract of employment.

 

JURISDICTION Under the provisions of s 136(l) of the 1978 Act an appeal lies to the Employment Appeal Tribunal only on a question of law'. The proceedings before the Employment 14. 465 @a Appeal Tribunal are thus by way of appeal and not by way of rehearing. If the Employment Appeal Tribunal is to allow the appeal it can only do so on the basis that the industrial tribunal was wrong in law. The employers contend that the appeal tribunal can only interfere with the decision of the industrial tribunal if it is shown that they have applied the wrong legal principles or that they have reached a conclusion on the facts which no reasonable tribunal applying the law could have reached. In the submission of counsel for the employers the limited question which the Employment Appeal Tribunal was entitled to ask itself was: on the facts found by the industrial tribunal, have they arrived at a conclusion which could be reasonably entertained? In his submission, the appeal tribunal are not entitled to ask themselves whether, on the facts found, the industrial tribunal have reached the correct conclusion. The issue before the industrial tribunal was whether the respondents worked for the employers pursuant to a contract or contracts of service or a contract or contracts for services. Before dealing with the substance of the appeal the appeal tribunal dealt with the extent of their jurisdiction in the following terms:

 

'As is well known, an appeal lies here on a question of law only. There is a pronounced difference of judicial view whether the question,"Is a contract a contract of employment or a contract for services?" is a mixed question of fact and law or a question of law. The older view was that it was at best a mixed question of fact and law. As a result, an appellate court with jurisdiction to correct errors of law only could not intervene in the decision of the lower court unless it was shown that the lower court, in deciding whether or not there was a contract of employment, had on the face of its reasons for its decision indicated that it had misdirected itself in law, or had reached a conclusion that was in a legal sense "perverse".

 

This was the approach of the Court of Appeal in Simmons v Heath Laundry Co [ 1 9 1 0] 1 KB 543, and of the Queen's Bench Divisional Court in Construction Industry Training Board v Labour Force Ltd [ 1 970] 3 All ER 220 and Global Plant Ltd v Secretary of State for Health and Social Security [ 1 971] 3 All ER 3 85,[1972] 1 QB 139. It was also the approach of Browne LJ in the Court of Appeal in Ferguson v John Dawson & Partners [ 1 976] 3 All ER 817 at 832,[1976] 1 WLR 1213 at 1230, a case in which the appeal to the Court of Appeal lay on questions of fact as well as law. On the other side, in Young & Woods Ltd v West [1980] IRLR 201 at 205 Stephenson LJ following the view which he understood Megaw LJ to have expressed in Ferguson's case, held that the question was one of pure law so that the appellate court can, and indeed must, reach its own view whether or not, on the findings of fact made by the lower court, the true legal analysis is that there was a contract of employment. Ackner LJ, whilst agreeing with the conclusion reached by Stephenson LJ, did not specifically deal with this point. Since the Young & Woods case this appeal tribunal has often been confronted with a choice between these two conflicting views but in general has felt bound to follow the views of Stephenson LJ in Young & Woods: see, eg, Addison v London Philharmonic Orchestra [1981] ICR 261 at 270, Ahmet v Trusthouse Forte Catering Ltd (13 January 1983, unreported), Nethermere (St Neots) Ltd v Gardiner [1983] ICR 319. We do not propose to increase the leaming onthis matter. Very many cases come before this appeal tribunal on the point and it is in the highest degree desirable that the matter should be settled by the Court of Appeal one way or another at an early date. In the meantime it seems to us important to maintain a consistency of approach by this appeal tribunal. For that reason we, too, will approach the case on the basis laid down by Stephenson LJ, ie, that the question is a question of law on which we must make up our own minds on the basis of the facts found by the industrial tribunal whether the relationship between the parties is or is not a contract of employment.' I think it may be helpful to go straight to Young & Woods Ltd v West. Mr West was a skilled sheet metal worker and when he joined Young & Woods Ltd he was offered alternative methods of payment: either he could become an employee in the ordinary way or he could be treated as a self-employed person. Mr West chose to be treated as 'la 466 @a self-employed. No deductions were made from his pay for tax, he was responsible for his own national insurance contributions, he did not receive any holiday pay or sickness benefit from the company. This agreement was entered into with the knowledge of the Inland Revenue, who treated Mr West for tax purposes as self-employed. When Mr West's work was terminated he complained that he had been unfairly dismissed. Young & Woods Ltd contended that he was not an employee under a contract of service, but he was self-employed under a contract for services. The industrial tribunal held that Mr West was an employee as defined by the statute and not self-employed as he and the company had agreed that he was. The Employment Appeal Tribunal, by a majority, dismissed the company's appeal. They held that the parties cannot, by a mere label, alter realities and that the realities were that Mr West was no more than a skilled sheet metal worker working under a contract of service, just as other employees who were admittedly working under a contract of service. The minority view was that a deliberate choice had been made by Mr West to be treated as self-employed in order that he might reap fiscal advantages. The reality was that he deliberately chose to be in the position of a self-employed person. On behalf of Young & Woods Ltd it was argued in the Court of Appeal, inter alia, that the presumption created by Mr West deliberately and openly choosing the relationship of self-employed, although rebuttable, was not easily rebutted and had not been rebutted by him. The complaint was made that the appeal tribunal did not pay any, or any adequate, regard to those facts which pointed away from a contract of service to a contract for services. In the course of his judgment Stephenson LJ commented on the observation made by Browne LJ at the conclusion of his judgment in Ferguson v Dawson & Partners (Contractors) Ltd [ 1 976] 3 All ER 817 at 832,[1976] 1 WLR 1213 at 1230, which was in these terms:

 

'When the right tests have been applied, the conclusion to be drawn is in my view a question of fact: see Global Plant Ltd v Secretary of State for Health and Social Security [19711 3 All ER 385 at 391-393,[19721 1 QB 139 at 152-155.' The Global Plant case was a decision of the Divisional Court. The Ferguson decision was a case in which the majority of the Court of Appeal held that notwithstanding the label which the parties had put on their relationship to the effect that the plaintiff was to be, or was deemed to be 'a self-employed labour only subcontractor', in reality the relationship was that of employer and employee. Stephenson LJ cited the following excerpt from the judgment of MacKenna J in the well-known case of Ready Mixed Concrete (South East) Ltd v Minister ofPensions and National Insurance [ 1 968] 2 QB 497 at 512-513, which Megaw LJ had clearly cited with approval in the Ferguson case:

 

'It may be stated here that whether the relation between the parties to the contract is that of master and servant or otherwise is a conclusion of law dependent upon the rights conferred and the duties imposed by the contract. If these are such that the relation is that of master and servant, it is irrelevant that the parties have declared it to be something else. I do not say that a declaration of this kind is always necessarily ineffective. If it were doubtful what rights and duties the parties wished to provide for, a declaration of this kind might help in resolving the doubt and fixing them in the sense required to give effect to that intention.' That part of Stephenson LJ's judgment which the appeal tribunal rely on in Young & Woods Ltd v West [1980] IRLR 201 at 205 is as follows:

 

'... but I must respectfully express my dissent from what [Browne LJ] said at the very conclusion of his judgment, that the conclusion to be drawn from the facts as to the true legal relationship between the parties after the right tests have been applied is a question of fact. If by that he meant that it was a question on which this court cannot interfere, I prefer the view of Lord Justice Megaw that it is a question of law, in those cases of service or services as in the case of lease or licence, whether the true inference from the facts, the true construction or interpretation of a written 14. 467 @a agreement or of an agreement partly oral and partly written or of a wholly oral agreement, is a matter of law on which there is a right and a wrong view, and if an Industrial Tribunal comes to what in the view of this court is a wrong view of the true nature of the agreement, it can and should find an error in law on the part of the Industrial Tribunal and reverse its decision. It cannot say that two views are possible of the true construction of this particular agreement on the facts which the Industrial Tribunal has found, and we cannot say that no reasonable tribunal could have come to the interpretation which the Industrial Tribunal has put upon the facts. It must make up its mind what the true interpretation of the facts and the true legal relationship created by the contract between the parties is.' Stephenson LJ rejected the submission that the appeal tribunal had ignored or undervalued those facts which pointed away from a contract of service to a contract for services. He took the view that the pointers in the other direction were strong enough to satisfy the burden which no doubt rested on Mr West to show that the label was a false label and that, though the mutual intention of the parties was undoubtedly to call the work which Mr West was going to do for them services under a contract for services, nevertheless it was in reality service rendered under a contract of service. There was no such ambiguity in the relationship between Mr West and the company as could make their declared intention as to what it should be decisive of it. The extent of the appeal tribunal's jurisdiction was not called into question, as I recall the appeal, and in my judgment I did not deal with that subject in express terms. I did, however, at the outset of my judgment, express my agreement with the judgment of Stephenson LJ, and this was certainly intended to cover all that he said.

=El

 

Sir David Cairns began his judgment in these terms (at 208-209):

 

'I found this a difficult case. I was much impressed by [counsel for the respondent's] contention that the right conclusion from the facts found in paragraph 3 of the decision of the Industrial Tribunal was that there was in reality, and not merely as a matter of label, a contract for services rather than a contract of service. An alternative argument of [counsel] which also seemed to me to have much force was that, taking account of the facts in paragraph 3 together with those in paragraph 5 of the decision indicating that Mr West's working conditions were indistinguishable from those of the company's employees, the case was one of ambiguity where the label might be decisive.' It seems to me clear that Sir David Cairns was approaching the case not on the basis that the appeal court had merely to be satisfied that the industrial tribunal reached a decision which was reasonably open to them when properly applying the law to the facts. The appellate tribunal, be it the Employment Appeal Tribunal or the Court of Appeal, had to be satisfied that the industrial tribunal had reached the correct decision. Towards the end of his judgment he said (at 209):

 

'... on balance, the matters pointing to its being a contract of service do outweigh the matters pointing in the other direction ...' It is clear that the approach of the Court of Appeal in the Young & Woods Ltd v West case was that an error of law could be established if. (a) the industrial tribunal took into account the wrong criteria in concluding that a contract was a contract of service or a contract for services and/or (b) if the tribunal, although applying the proper criteria, gave the wrong weight to one or more of the relevant factors. Counsel for the employers, while accepting that it is a question of law whether or not the right criteria had been applied in answering the question 'Contract of service or contract for servicesT, contends that it is entirely a matter of fact as to the weight given to the relevant criteria. I am bound to say that I find this submission difficult to accept. For example, it is well established that the power to direct and control the work of the employee is an important factor, but only one of the factors to be considered. If an 14. 468 @a industrial tribunal decided that so much weight should be given to the control exercised or exercisable by the employer that it concluded the issue, I would have thought that an appeal tribunal would clearly be entitled itself to make the proper evaluation of that particular factor and reverse the decision. The one case in the Court of Appeal on which counsel for the employers relies is Simmons v Heath Laundry Co 1 9 1 0] 1 KB 543. The facts are quite simple. A laundry girl had her hand injured by an accident arising out of and in the course of her employment. She earned 7s a week at the laundry, but she also gave piano lessons to a man's children at his house at 3s a week. She applied under the Workmen's Compensation Act 1906 that the latter sum might be taken into account under para 2(b) of Sch 1 to that Act in assessing her compensation. This paragraph provided that where a workman had entered into concurrent contracts of service with two or more employers under which he worked at one time for one such employer and at another time for another such employer his average weekly earnings should be computed as if his earnings under all such contracts were earnings in the employment of the employer for whom he was working at the time of the accident. 'Workman' in s 13 of the 1906 Act meant  any person who has entered into or works under a contract of service or apprenticeship with an employer, whether by way of manual labour, clerical work, or otherwise, and whether the contract is expressed or implied, is oral or in writing ...' Liability was admitted on the footing of the wages of 7s per week paid by the respondents, but they denied that the case fell within para 2(b) of Sch 1, contending successfully before the county court judge that the appellant had not entered into concurrent contracts of service. The issue which had to be decided was whether the girl, as a teacher of music, came within the definition of 'workman' in the Act. In his judgment, Cozens-Hardy MR said (at 548):

 

'In any particular case it will be for the arbitrator, after considering all the circumstances, to decide whether the injured professional person is or is not a "workman". This is not a question of law, but a question of fact, and, unless the arbitrator has misdirected himself, this court ought not to interefere.' Fletcher Moulton LJ said (at 549):

 

'These facts, although very simple, raise a question of law of considerable importance and difficulty. It turns substantially on the scope which is to be given to the phrase "contract of service" in the [Workmen's Compensation] Act.' Towards the end of hisjudgment he said (at 550):

 

'The learned county court judge has decided that it was not a contract of service, and that therefore the earnings under it cannot be counted in assessing the compensation to be paid to the injured girl. This is a question of fact as to which we cannot interfere with his decision.' Buckley LJ began hisjudgment in these words (at 550):

 

'This appeal involves a decision trifling in pecuniary amount, but of the largest consequence in its possible application to other cases. The question in substance is as to the true meaning of the words "contract of service" in the definition of a workman contained in s. 13 of the Act.' Buckley LJ dealt in some little detail with examples of contracts under which services are rendered but which could not be described as contracts of service. He then said (at 5 5 3):

 

'The question to be answered is, Was he employed as a workman or was he employed as a skilled adviser? I do not know whether it is possible to approach more closely to an answer to the question as to what is a contract of service under this Act 14. 469 @a than to say that in each case the question to be asked is what was the man employed to do; was he employed upon the terms that he should within the scope of his employment obey his master's orders, or was he employed to exercise his skill and achieve an indicated result in such a manner as in his judgment was most likely to ensure success? Was his contract a contract of service within the meaning which an ordinary person would give to the words? Was it a contract under which he would be appropriately described as the servant of the employer? If the question which the county court judge puts to himself is that question, and his answer is given in view of those principles, then I think his finding is a finding of fact.' I must confess that I was surprised at the terms of this decision, emanating, as it does, from so strong a Court of Appeal. I am relieved to find that my diffedent conclusion that the decision was wrong seems to me to be amply home out by the two main speeches in the well-known case of Edwards (Inspector of Taxes) v Bairstow [ 1 9 5 5 ] 3 All ER 48,[19561 AC 14. The facts of the case are simple enough. In 1946 Mr Bairstow and Mr Harrison embarked on a joint venture involving the purchase of a complete spinning plant, agreeing between themselves not to hold it but to make a quick resale. After much negotiation and not until 1948 the plant was sold in several lots at a substantial profit. Expenses had been incurred, inter alia, for commission for help in effecting the sales, for insurance, renovation of the plant, etc The General Commissioners found that there was not an adventure in the nature of trade to justify an assessment to income tax under Case 1 of Sch D to the Income Tax Act 1918. Viscount Simonds said ([ 1 95 5] 3 All ER 48 at 54J19561 AC 14 at 30-3 1):

'To say that a transaction is, or is not, an adventure in the nature of trade is to say that it has or has not the characteristics which distinguish such an adventure. But it is a question of law, not of fact, what are those characteristics, or, in other words, what the statutory language means. It follows that the inference can only be regarded as an inference of fact if it is assumed that the tribunal which makes it is rightly directed in law what the characteristics are and that, I think, is the assumption that is made. It is a question of law what is murder; a jury finding as a fact that murder has been committed has been directed on the law and acts under that direction. The commissioners making an inference of fact that a transaction is, or is not, an adventure in the nature of trade are assumed to be similarly directed, and their finding thus becomes an inference of fact.' Lord Radcliffe said ([1955] 3 All ER 48 at 55,[1956] AC 14 at 33):

 

'My Lords, I think that it is a question of law what meaning is to be given to the words of the Income Tax Act "trade, manufacture, adventure or concern in the nature of trade" and for that matter what constitutes "profits or gains" arising from it. Here we have a statutory phrase involving a charge of tax, and it is for the courts to interpret its meaning, having regard to the context in which it occurs, and to the principles which they bring to bear on the meaning of income.' He then went on to observe that the law did not supply a precise definition of the word 'trade', much less did it prescribe a detailed or exhaustive set of rules for application to any particular set of circumstances. He said ([1955] 3 All ER 48 at 55-56,[19561 AC 14 at 33):

 

'In effect, it lays down the limits within which it would be permissible to say that a "trade" as interpreted by s. 237 of the Act does or does not exist. The field so marked out is a wide one and there are many combinations of circumstances in which it could not be said to be wrong to arrive at a conclusion one way or the other. If the facts of any particular case are fairly capable of being so described, it seems to me that it necessarily follows that the determination of the commissioners, special or general, to the effect that a trade does or does not exist is not "erroneous in point of law"; and, if a determination cannot be shown to be erroneous in point of law, the statute does not admit of its being upset by the court on appeal. I except the 14.470 U occasions when the commissioners, although dealing with a set of facts which would warrant a decision either way, show by some reason they give or statement they make in the body of the Case that they have misunderstood the law in some relevant particular. All these cases in which the facts warrant a determination either way can be described as questions of degree and therefore as questions of fact.' It seems to me clear that in the Heath Laundry case it was a question of law what meaning had to be given to Para 2(b) of Sch 1 to the Workmen's Compensation Act 1906. Further, it must be axiomatic that whether or not A has entered into a contract with B, whether such contract be in writing or partly in writing and partly oral, or wholly oral, is a question of law involving the true interpretation of a document and/or the conduct of the parties. The facts cannot warrant a determination either way. It is not a question of degree, as in the case of the meaning of reasonableness (see Union ofConstruction, Allied Trades and Technicians vBrain [1981] ICR 542) or whether a breach amounted to a repudiatory breach (see Woods v RPM Car Services (Peteroborough) Ltd [1982] ICR 693). If then it is a question of law, whether on the correct interpretation of a document or whether on the true inference from the facts, parties have entered into a contract, then in my judgment it must be equally a question of law what on the facts found is the true nature or quality of that legal relationship? Given that A has entered into a contract with B to allow him to use his, A's, premises, I would have thought it axiomatic that whether such an agreement amounts to a lease or a licence is a question of law depending on either a proper construction of the relevant document(s) and/or on the true interpretation of the facts. If this be correct, then having established as a matter of law that there was a contract of employment between A and B, the quality or nature of that contract must equally be a question of law: Was it a contract of service or a contract for services, did B enter A's employment as an ordinary employee or was he employed by A as an independent contractor? I do not think that it is profitable to consider all the other cases of a lesser status than that of the Heath Laundry case. I should perhaps refer to Morren v Swinton and Pendlebury BC [19651 2 All ER 349,[1965] 1 WLR 576, which involved a case stated by the Minister of Housing and Local Government under s 35 of the Local Government Superannuation Act 1937 for the opinion of the High Court on 'any question of law ...' The dispute was between a local authority and a resident engineer whom they had appointed, and the issue was whether or not he came within the definition of 'employee' in s 40(l) of the Local Government Superannuation Act 1937. Lord Parker CJ, with whose judgment Marshall and Widgery JJ agreed, said Q19651 2 All ER 349 at 352,[1965] 1 WLR 576 at 583):

 

'Counsel for the respondents has pressed on the court that the question of what is the legal quality of the contract is a question of fact, and that, being a question of fact, it is for the Minister and not for this court to determine, provided that there is any evidence which would justify the Minister in arriving at this conclusion. For my part, I am quite unable to accept that. The terms of the contract of course are fact, and to that extent the determination depends on fact, but it seems to me perfectly clear that, once the primary facts are found, then it is a pure question of law what is the reasonable inference based on the legal interpretation of the contract.' In Global Plant Ltd v Secretary of Statefor Health and Social Security [ 1 971] 3 All ER 3 85 [1972] 1 QB 139 Lord Widgery CJ declined to follow the view expressed by Lord Parker CJ, distinguishing it on the ground that in that case the issue of contract of service or no had to be determined substantially from a written contract. I cannot accept the validity of this distinction. It was objected by counsel for the employers that if the Employment Appeal Tribunal and the Court of Appeal were entitled to intervene where in their opinion the industrial tribunal had reached the wrong, although an arguable decision, this would lead to a multiplicity of litigation. In my judgment the contrary would be the case. Without the Employment Appeal Tribunal being entitled to intervene where in its view the industrial % 471 @a tribunal hw wrongly evaluated the weight of a relevant considerations) then it will be open to industrial tribunals to reach differing conclusions, so long as they are reasonably maintainable, on essentially the same facts. This is clearly highly undesirable, particularly where a substantial number of statutory provisions impose duties on an employer in relation to his employees, or confer benefits on employees, where they work under a contract of service, but not under a contract for services. Quite apart from the 1978 Act, there are the Transfer of Undertakings (Protection of Employment) Regulations 1981, SI 1981/1794 dealing with rights and obligations relating to employers and employees on certain transfers or mergers of undertakings, business or parts of business, the Social Security Act 1975, which makes the employer responsible for contributions in respect of an employed 'eamer', and the Factories Acts. To permit conflicting decisions on the basis that a broad band exists where a tribunal or a court might be said reasonably entitled to decide the issue either way would seem most unsatisfactory. At the appeal tribunal two attacks were mounted on the decision of the industrial tribunal and I will seek to deal with these separately. 1. Thefinding that there is no contractual obligation either on the employers, TrusthouseForte, to offer work or on the respondents to do work once rostered It was submitted that the industrial tribunal, having found that in practice 'regular' casuals on the list had priority in the offer of available work and a reciprocal practical requirement to do the work once rostered (because failure to do the work could lead to possible suspension and subsequent removal from the list) the right conclusion to draw was that there was a contractual obligation on the employers to offer work to 'regulars' in priority and on 'regulars' to do the work when offered. It was therefore contended that factors (o) and (p) in Para 23 of the industrial tribunal's reasons should not have been placed in the balance against there being a contract of employment. On the contrary,'the one important ingredient'(namely mutuality of obligation) which the industrial tribunal found to be missing was indeed present. The appeal tribunal rejected this submission. It was, as found by the industrial tribunal, the commanding economic power of the employers and the financial advantages to the respondents of conforming with the employers' requirements which enabled the employers to be able to rely on the 'regulars' accepting the work when it was rostered, and the 'regulars', for their part, being able to rely on receiving the priority to which I have referred. The same attack has been repeated before us. Counsel for the respondents complained that the industrial tribunal had begged the question in factors (o) and (p). I do not think this is right. The 'assurance of preference in the allocation of any available work' which the 'regulars' enjoyed was no more than a firm expectation in practice. It was not a contractual promise. The employers, of course, expected the respondents to accept engagements rostered, but to suggest that a failure to accept amounted to a breach of contract is going too far. They were entitled to choose whether or not to attend, and however irritating it might have been to the employers if faced with a refusal, it would have been quite unreal to conclude that either party would have thought it was a breach of contract. 2. The industrial tribunal erred in law in weighing in the balancefactors (q) and (r) Factor (q) was that during the subsistence of the relationship it was the parties' view that the casual workers were independent contractors engaged under successive contracts for services. Factor (r) was that it is the recognised custom and practice of the industry that casual workers are engaged under a contract for services.

 

The Employment Appeal Tribunal accepted this submission, concluding that the evidence fell far short of showing that the parties had any view of the nature of the existing contractual relationship between them, let alone a shared intentional desire to produce a particular legal relationship. Having accepted the finding by the industrial tribunal that there was no overall contractual obligation to roster any 'regular' casuals and accordingly unless and until in each week a 'regular' casual was rostered for a job there could be no contractual bond of any kind between the employers and the employee, 'la 472 @a the respondents' success on this subsidiary issue was, however, considered to be irrelevant. Since I agree that the Employment Appeal Tribunal were right to conclude that the respondents' success on the subsidiary point was of no practical consequence, there is no need to inquire into the correctness or otherwise of their accepting the respondents' submissions with regard to paras (q) and (r). I add, however, these short observations since they may have some relevance to the next main heading. I accept counsel for the employers' submission that there was ample evidence that the respondents and the employers were aware of the factual distinctions between 'regular' casuals and the employees of the employers, but since there was no ambiguity as to the relationship it seems to me to be irrelevant to consider what was the legal result the parties intended to produce. Clearly the 'custom and practice' found in factor (r) did not amount to a legal custom properly so described. However, the respondents' evidence was initially that the employers were out of step with the industry. They said that they were the only employers who did not issue contracts of employment. This was subsequently withdrawn as a result of the employers, during an adjournment, calling evidence to establish that the practice which they adopted, referred to earlier in this judgment, was indeed the practice adopted generally throughout the trade. This was a factor, although not a particularly important factor, which the industrial tribunal were entitled to take into account as part of the background against which the parties regulated their relationship. The industrial tribunal were entitled to find as they did that from the commencement of their engagement the respondents were treated by the employers as casual staff, on terms and conditions entirely distinct from those accorded to the wine butlers and dispense barmen who were permanent employees and issued with written contracts of employment. The respondents were aware of the distinction and did not challenge it. Separate contracts. It seems quite clear that at the hearing before the industrial tribunal the essence of the respondents' case was that there was one overall or continuous contract in relation to the 'regulars'. The chairman's notes show that it was in his mind that certainly one alleged feature, the casual nature of the contract, might affect 'whether we conclude a continuing or successive contract'. The tribunal note of counsel for the employers' closing speech again makes it clear that he was dealing with a case in which it had been maintained throughout that the nature of the relationship was not short-term but a continuous contract of service, which had been terminated by the employers' letter of 26 February. The reply by Mrs Gill, on behalf of the respondents, again made it clear that the employment was 'continuous'. However, it was accepted before the appeal tribunal, before whom Mr Irvine did not appear for the employers, that the point had been made that each hiring was a separate contract and the nature of that contract was a contract of service. The point was not dealt with by the industrial tribunal, but the appeal tribunal felt at liberty to decide it. They took the view that the factors relied on as indicating the existence of a contract of employment enumerated by the industrial tribunal was as much applicable to each individual contract as to an overall contract. They left out of account factors 0) to (in) which the industrial tribunal, rightly in the view of the appeal tribunal, regarded as neutral. When they came to the factors which in relation to the overall contract were treated as being inconsistent with a contract of employment, the lack of mutuality factors (o) and (p) did not apply to the individual contracts, since once a 'regular' had turned up for the function then it was accepted there was a contractual obligation to allow the work to be done. They repeated their views in relation to factors (q) and (r), namely that there was no evidence justifying a finding of any specific intention by the parties as to the nature of the legal relationship that they were creating. They therefore concluded that all those elements pointing against a contract of employment had disappeared, leaving in existence factors all of which point to there being a contract of employment. The appeal tribunal said:

 

'We find it difficult to see on what grounds it can be urged that each individual contract is a contract for services, given the degree of control, the nature of payment, the holiday pay, the background of recurrence, the de facto requirement to work for one person only.' ,1@ 473

 

However, the nature of payment, the holiday pay, the background of recurrence and the de facto requirement to work for one person only are not relevant to status when working pursuant to an individual contract: they are only

 

relevant to the issue,'Was there an overall contractT, as to which the appeal tribunal have agreed with the decision of the industrial tribunal. The appeal tribunal concluded that each individual contract was a contract of employment and not a contract for services. Counsel for the employers, of course, accepts that there were individual contracts with the 'regulars', as, indeed, with all casuals. He contends that they were not contracts of employment and that this issue was never properly before the industrial tribunal. He takes the further point that in each single contract the engagement was for a particular task and when that task was performed that engagement was discharged by performance. In such circumstances there was no dismissal and therefore no entitlement to invoke the Act: see Wiltshire County Council v National Association of Teachers in Further and Higher Education [ 1 980] ICR 45 5, a decision of this court. There is, in fact, indeed a finding in this regard in Para 6 of the industrial tribunal's reasons for its decision:

 

'If an engagement is undertaken the worker is paid at the appropriate hourly or sessional rate for the work performed. During the function the casual worker works under the direction and control of the employer as part of his Organisation and the relationship ends automatically at the end of the function without the need of notice on either side.' It appears to have been accepted before the industrial tribunal that it cannot be determined in advance precisely how long each function will last, therefore how long the casual will be employed in relation to that function. He will, of course, stay until he has completed all the work for which he was engaged. The point whether the expiry of each such individual contract at the conclusion of each session constitutes a 'dismissal' within the meaning of s 55 of the 1978 Act was not considered by the appeal tribunal and, indeed, was not investigated by the industrial tribunal. In my judgment the appeal tribunal, having allowed the individual contract point to be raised, should have remitted it to the industrial tribunal in order to consider not only whether such individual contracts were contracts of service or for services, but also whether, since counsel for the respondents wishes to contest the point, each such contract was discharged by performance at the conclusion of the work involved in the session and whether, in such circumstances, where was a 'dismissal' within the meaning of s 5 5 of the 1978 Act. I would accordingly have allowed this appeal to the limited extent of ordering the remission to the industrial tribunal of what can be called, conveniently,'the single or successive contract issue', and dismissed the cross-appeal.

 

FOX LJ. The preliminary issue with which we are concerned is whether the applicants, the respondents in this court, were 'employees' under a 'contract of employment' within s 153(l) of the Employment Protection (Consolidation) Act 1978 or whether they were independent contractors working under a contract for services. Under s 136(l) of the Act an appeal lies to the Employment Appeal Tribunal 'on a question of law' arising from a decision of the industrial tribunal. The first question which we have to determine is the extent of the jurisdiction of the Employment Appeal Tribunal to interfere with the decision of the industrial tribunal. It is said, by the applicants, that the question whether a contract is a contract of service or a contract for services is a question of law, that s 136(l) permits an appeal on a question of law, and that accordingly the Employment Appeal Tribunal were free to make up their own minds on that question of law on the basis of the facts found by the industrial tribunal. I accept that the question whether a contract is a contract of service can, in a general sense, be called one of law. But I doubt if that is useful in relation to the present problem. It gives too general an answer to a more complex matter. Thus it is evident from the authorities that a question can, in a general sense, be characterised as one of law without excluding the possibility that, in the end, it resolves itself into a question of fact ini4. 474 @2 individua cases. In Currie v IRC [1921] 2 KB 332 the question was whether a person was carrying on a 'profession' within the meaning of exception (c) of s 39 of the Finance (No 2) Act 1915. Lord Stemdale MR said (at 335-336):

 

'Is the question whether a man is carrying on a profession or not a matter of law or a matter of fact? I do not know that it is possible to give a positive answer to that question; it must depend upon the circumstances with which the Court is dealing. There may be circumstances in which nobody could arrive at any other conclusion than that what the man was doing was carrying on a profession; and therefore, looking at the matter from the point of view of the judge directing a jury, the judge would be bound to direct them that on the facts they could only find that he was carrying on a profession. That reduces it to a question of law. On the other hand, there may be facts on which the direction would have to be given the other way. But between those two extremes there is a very large tract of country in which the matter becomes a question of degree; and where that is the case the question is undoubtedly, in my opinion, one of fact ...' In Edwards (Inspector of Taxes) v Bairstow [1955] 3 All ER 48,[19561 AC 14 the question was whether a transaction was 'an adventure or concern in the nature of trade' and so taxable under Case I of Sch D to the Income Tax Act 1918. Lord Radcliffe said that was a question of law: see [1955] 3 All ER 48 at 55,[1956] AC 14 at 33. But he also said that the law provided no precise definition of the word 'trade' and that there were many combinations of circumstances in which it could not be said to be wrong to arrive at a conclusion one way or the other. All such cases could be described 'as questions of degree and, therefore, as questions of fact'. Simmons v Heath Laundry Co [19 101 1 KB 543 is a much earlier example of the principle stated in Currie v IRC and Edwards v Bairstow. The case turned on the meaning of the term 'contract of service' in the Workmen's Compensation Act 1906; the problem related to part-time earnings of the applicant from giving piano lessons and giving accompaniments on the piano. The arbitrator decided that the earnings did not arise under contracts of service. That was held to be a question of fact for the arbitrator, and accordingly the Court of Appeal refused to interfere. Fletcher Moulton LJ said (at 549):

 

'Some cases present no difficulty. For example, where the proprietor of a private boarding school engages ushers to teach the boys and to maintain discipline, it does not, in my opinion, admit of reasonable doubt that the contracts into which those ushers enter are "contracts of service" within the Act. On the other hand it is in my mind equally clear that where a person goes to a music or singing master to take lessons it would be absurd to hold that the person giving the lessons is the servant of the person taking them in any sense of the word. The contract between them is a contract for services, but it is not a contract of service. Between these two extreme cases lie an infinite number of intermediate cases where the special circumstances point with greater or less force towards the one conclusion or the other, and in my opinion it is impossible to lay down any rule of law distinguishing the one from the other. It is a question of fact to be decided by all the circumstances of the case.' Woods v RPM Car Services (Peterborough) Ltd [ 1 982] ICR 693, which was concerned with the question whether the employer had repudiated the contract of service, seems to me to follow the same principles as those stated by Lord Stemdale MR, Fletcher Moulton LJ and Lord Radcliffe. In Woods (at 698) Lord Denning MR said:

 

'In each case it depends on whether the misconduct amounted to a repudiatory breach ... The circumstances are so infinitely various there can be, and is, no rule of law saying what circumstances justify and what do not. It is a question of fact for the tribunal of fact in this case the industrial tribunal.' Now what is said on behalf of the respondents in the present case is this. It is accepted that in Woods v kvm Car Services, for example, the nature of the issue before the court 14. 475 @a was such that there was a grey area, or a band of uncertainty, where one could not say that it would be wrong for the tribunal to decide the case one way or the other. The confines of the law were imprecise and, within the grey area, it was a matter of degree in individual cases whether the case was within the statutory provision or not. That, however, is not, so it is said, the position here. There can only be one correct answer to the question whether a contract of service exists. Reliance is placed on the decision of this court in Young & Woods Ltd v West [1980] IRLR 201 and, in particular, the observations of Stephenson LJ (at 205). 1 do not feel able to accept that argument. The issue seems to me to be no more susceptible of the analysis that there is a right and a wrong answer to be determined as a matter of pure law than was the issue in Heath Laundry or Currie v IRC or Woods v RPM Car Services. The precise quality to be attributed to various individual facts is so

 

much a matter of degree that is is unrealistic to regard the issue as attracting a clear 'legal' answer. I do not think that Heath Laundry was wrongly decided. It seems to me to be consistent with the principles applied by the Court of Appeal in Currie v IRC and the House of Lords in Edwards v Bairstow, and if there be any conflict between it and Young & Woods v West (in which, in fact, the Court of Appeal was of opinion that the decision of the industrial tribunal was right and did not have to interfere with it), I would follow the Heath Laundry case. I should add that I do not detect in the more recent authorities any tendency to depart from the Edwards v Bairstow principles. In Melon v Hector Powe Ltd [ 1 9 8 1 ] 1 All ER 3 13 they were applied by the House of Lords in an appeal from an industrial tribunal under the Redundancy Payments Act 1965: see the speech of Lord Fraser (at 316). And in Pioneer Shipping Ltd v BTP Tioxide Ltd, The Nema [1981] 2 All ER 1030 at 1047,[19821 AC 724 at 752 Lord Roskill said that in Edwards v Bairstow the House of Lords made it clear that the court should only interfere with the conclusion of special commissioners if it were shown either that they had erred in law or had reached a conclusion which no reasonable tribunal, properly instructed, could have reached. And he went on to deprecate the suggestion that since the question whether a contract was frustrated was one of law the court was free to decide the matter itself and contrary to the decision of the arbitrators. In the present case the industrial tribunal in their full and careful reasons list nine circumstances which are consistent with the existence of a contract of employment, four which are not inconsistent with it and five which are inconsistent with it. It seems to me that the case was indeed one where the answer, in the end, was a matter of degree and, therefore, of fact. For example there may, I think, be a narrow line between the conclusion that the employers were undertaking to offer work to the regular casuals in return for the regular casuals undertaking to accept the work which was offered (ie a contract of employment) and the conclusion that there was no contract to employ and that the arrangement was simply the consequence of market forces (in effect, the dominant economic position of the employers). It was essentially a matter of fact for the industrial tribunal to decide which was correct after considering the evidence. The result, in my view, is that the Employment Appeal Tribunal was not entitled to interfere with the decision of the industrial tribunal unless that tribunal misdirected itself in law or its decision was one which no tribunal, properly instructed, could have reached on the facts. Neither of those exceptions can be demonstrated here in relation to the overall contract question. I cannot see any misdirection and I find it quite impossible to say that no reasonable tribunal, properly instructed, could have reached the conclusion that the industrial tribunal did. They had evidence on which to do so. I agree, therefore, with the conclusion of the appeal tribunal that the industrial tribunal's decision that there was no overall contract of employment must stand. There remains the question whether there was a series of individual contracts of employment of the 'regular' casuals. The appeal tribunal were of the opinion that the industrial tribunal had not dealt with the point at all. Mrs Gill, who appeared for the respondents before the industrial tribunal, is, we are informed, in no doubt that she put the point. In the light of its careful reasons, I should be surprised if this tribunal overlooked it. ,1@ 476 @a If the point was not dealt with by the industrial tribunal I do not think that the appeal tribunal was justified in dealing with the point itself. The appeal tribunal should, in the circumstances of this case, have remitted the matter. In fact, however, what the industrial tribunal decided was this:

 

'The majority decision of the tribunal is that the applicants [the respondents] are not qualified for interim relief because they are not employees who worked under a contract of employment.' That was the question the industrial tribunal were required to decide. Now the industrial tribunal, no doubt, decided that there was no overall contract of employment. But they decided more than that. In the final paragraph of their reasons they state:

 

'It is our decision that the applicants [the respondents] were in business on their own account as independent contractors supplying services and are not qualified for interim relief because they were not employees who worked under a contract of employment.' That seems to me to be inconsistent with the 'separate contracts' contention. Since it does not appear to me that there was any misdirection by the industrial tribunal and the conclusion was not unreasonable on the facts, I would therefore regard the point as concluded.

 

I would allow the appeal and dismiss the cross-appeal.

 

SIR JOHN DONALDSON MR. The judgment of the Employment Appeal Tribunal in this case suggests that there is a difference of judicial view whether the question 'Is a contract a contract of employment or a contract for servicesT is a mixed question of fact and law or a question of law, but I do rather doubt whether the triple categorisation of issues as 'fact','law' and 'mixed fact and law' is very helpful in the context of the jurisdiction of the Employment Appeal Tribunal. The Employment Appeal Tribunal is a court with a statutory jurisdiction. So far as is material, that jurisdiction is limited to hearing appeals on questions of law arising from any decision of, or arising in any proceedings before, an industrial tribunal: see s 136(l) of the Employment Protection (Consolidation) Act 1978. If it is to vary or reverse a decision of an industrial tribunal it has to be satisfied that the tribunal has erred on a question of law. Whilst it may be convenient for some purposes to refer to questions of 'pure' law as contrasted with 'mixed' questions of fact and law, the fact is that the Employment Appeal Tribunal has no jurisdiction to consider any question of mixed fact and law until it has purified or distilled the mixture and extracted a question of pure law. The purification methods are well known. In the last analysis all courts have to direct themselves as to the law and then apply those directions in finding the facts (in relation to admissibility and relevance) and to the facts as so found. When reviewing such a decision, the only problem is to divine the direction on law which the lower court gave to itself. Sometimes it will have been expressed in its reasons, but more often it has to be inferred. This is the point of temptation for the appellate court. It may well have a shrewd suspicion, or gut reaction, that it would have reached a different decision, but it must never forget that this may be because it thinks that it would have found or weighed the facts differently. Unpalatable though it may be on occasion, it must loyally accept the conclusions of fact with which it is presented and, accepting those conclusions, it must be satisfied that there must have been a misdirection on a question of law before it can intervene. Unless the direction on law has been expressed it can only be so satisfied if, in its opinion, no reasonable tribunal, properly directing itself on the relevant questions of law, could have reached the conclusion under appeal. This is a heavy burden on an appellant. I would have thought that all this was trite law, but if it is not, it is set out with the greatest possible clarity in Edwards (Inspector of Taxes) v Bairstow [1955] 3 All ER 48,[1956] AC 14. ,1@ 477 Why, then, is there a problem in relation to an issue whether an applicant to an industrial tribunal is or is not employed under a contract of employment? The answer lies in the interpretation which the Employment Appeal Tribunal has placed on a passage in ajudgment of Stephenson LJ in Young & Woods Ltd v West [1980] IRLR 201 at Para 15, which, in the appeal tribunal's judgment, Browne-Wilkinson J interpreted as authority for the proposition that 'the question is one of pure law, so that the appellate court can, and indeed must, reach its own view on whether or not, on the findings of fact made by the lower court, the true analysis is that there was a contract of employment.' If this is the true interpretation of Stephenson LJ's judgment, it represents a sudden and unexplained departure from what has been understood to be the law for over 70 years, for it was as long ago as that that this court went so far, in Simmons v Heath Laundry Co [19101 1 KB 543, as to described the issue as one of fact with which an appellate court could not interfere in the absence of reason to believe that the arbitrator had misdirected himself. For my part I do not think that Stephenson LJ can be taken as having intended to make such a departure. There is no doubt that there are pure questions of law which throw a court back to questions of fact. The most obvious example is what length of notice is required to terminate a contract which does not expressly make provision for termination. This is a pure question of law and the answer is: such time as is reasonable in all the circumstances. Applying that direction to facts whose nature, quality and degree are known with complete precision will no doubt always produce the same answer. But this is not real life. In reality every tribunal of fact will find and assess the factual circumstances in ways which differ to a greater or lesser extent and so can give rise to different conclusions, each of which is unassailable on appeal. In this sense, but in this sense alone, their conclusions are conclusions of fact. More accurately they are conclusions of law which are wholly dependent on conclusions of fact.

 

The test to be applied in identifying whether a contract is one of employment or for services is a pure question of law and so is its application to the facts. But it is for the tribunal of fact not only to find those facts but to assess them qualitatively and within limits, which are indefinable in the abstract, those findings and that assessment will dictate the correct legal answer. In the familiar phrase, it is all a question of fact and degree. It is only if the weight given to a particular factor shows a self-misdirection in law that an appellate court with a limited jurisdiction can interfere. It is difficult to demonstrate such a misdirection and, to the extent that it is not done, the issue is one of fact. This, I think, is what this court meant in Simmons v Heath Laundry Co which, so construed, is consistent with Edwards v Bairstow. In the instant appeal the industrial tribunal directed itself to 'consider all aspects of the relationship, no single factor being in itself decisive and each of which may vary in weight and direction, and having given such balance to the factors as seems appropriate, to determine whether the person was carrying on business on his own account.' This is wholly correct as a matter of law and it is not for this court or for the Employment Appeal Tribunal to reweigh the facts. The industrial tribunal then concluded that there was no contract of employment extending over a series of engagements. This conclusion was based on an evaluation of the large number of factors set out in their reasons, but it is clear that the majority attached great importance to the fact that, as they saw it, there was no mutuality of obligation and that in the industry casual workers were not regarded as working under any overall contract of employment. The Employment Appeal Tribunal refused to interfere with this conclusion and in myjudgment they were right to do so. So far as mutuality is concerned, the 'arrangement', to use a neutral term, could have been that the employers promised to offer work to the regular casuals and, in exchange, the regular casuals undertook to accept and perform ,4. 478 @a such work as was offered. This would have constituted a contract. But what happened in fact coul( equally well be attributed to market forces. Which represented the true view could only be determined by the tribunal which heard the witnesses and evaluated the facts. Against, although how the industry and its casual workers regarded their status is not directly material, any generally accepted view would be part of the contractual matrix and so indirectly material, although in no way decisive. This again was a matter for the industrial tribunal. Although 1, like the Employment Appeal Tribunal, am content to accept the industrial tribunal's conclusion that there was no overall or umbrella contract, I think that there is a shorter answer. It is that, giving the respondents' evidence its fullest possible weight, all that could emerge was an umbrella or master contract for, not of, employment. It would be a contract to offer and accept individual contracts of employment and, as such, outside the scope of the unfair dismissal provisions. This leaves the question of whether the respondents entered into individual contracts of employment on each occasion when they worked for the employers and it is here that the Employment Appeal Tribunal and the industrial tribunal parted company. The Employment Appeal Tribunal dealt with this aspect of the matter by saying:

 

'For whatever reason, the industrial tribunal have not dealt with the point, nor have they weighed the factors bearing on the question,"Was each contract a contract for services?" in the same careful way in which they weighed those factors when looking at the nature of an overall contract of employment. In our judgment, the mere assertion by the industrial tribunal that it was a succession of contracts for services entered into by independent contractors cannot stand as good in law in the absence of any reason for that conclusion. We must therefore consider the point and reach our own decision on it.' This, in my judgment, does less than justice to the decision of the industrial tribunal. It had weighed the relevant factors governing the relationship between the parties with great care in the course of determining whether any umbrella contract was one of employment or for the provision of services. It had rejected the umbrella contract on the grounds that there was no contract at all, but it had also concluded that

 

'the applicants [the respondents] were in business on their own account as independent contractors supplying services and are not qualified for interim relief because they were not employees who worked under a contract of employment'. This, unless erroneous in law, was a wholly sufficient reason for holding that the individual contracts, which clearly existed, were contracts for the provision of services. If and in so far as the Employment Appeal Tribunal was criticising the industrial tribunal for failing to say so, it should be pointed out that there was only one question which it had to decide, namely whether the respondents were employees who worked under a contract of employment. It answered this question in the negative as a matter for decision under the heading 'Decision'. The purpose of what followed under the heading 'Reasons' was to explain this decision. Those reasons, by explaining that there was no umbrella contract and that the respondents were independent contractors, disposed in different ways of the two different forms of contract of employment which had been suggested in argument. The fact that the argument was primarily about the umbrella contract does not persuade me that the status of the individual contracts was not carefully considered, particularly as Mrs Gill, who appeared for the respondents, says that she argued in the alternative for a succession of individual contracts of employment. Furthermore, in the light of the industrial tribunal's finding of lack of mutuality in relation to the umbrella contract the only point of considering 'service v services' was in relation to the individual contracts. Even if the Employment Appeal Tribunal had been correct in holding that the industrial tribunal's reasons were not sufficiently clear, this would not have entitled it to arrogate to itself the full functions of an industrial tribunal and so reach its own decision. The Employment Appeal Tribunal can correct errors of law and substitute its own decision in so far as the industrial tribunal must, but for the error of law, have reachedi4. 479 @a such a decision. But if it is an open question how the industrial tribunal would have decided the matter if it had directed itself correctly, the Employment Appeal Tribunal can only remit the case for further consideration. In the course of argument it was suggested that the course adopted by the Employment Appeal Tribunal could be justified by Para 2 1 (1) of Sch 1 1 to the Employment Protection (Consolidation) Act 1978, which provides:

 

'For the purpose of disposing of an appeal the Appeal Tribunal may exercise any powers of the body or officer from whom the appeal was brought or may remit the case to that body or officer.' However, I do not read that paragraph as doing more than authorising the Employment Appeal Tribunal to record a decision which, on the facts found, it could have directed the industrial tribunal to record. In pursuance of this declared intention to reach its own decision, the Employment Appeal Tribunal reviewed and re-evaluated the various factors, concluding that there was a series of ad hoc contracts of employment. In so doing, in my judgment it quite clearly usurped the function of the industrial tribunal. This was not a case in which no reasonable tribunal could have reached the conclusion reached by the industrial tribunal and no reasonable tribunal could have failed to reach that reached by the Employment Appeal Tribunal. The industrial tribunal's decision may have been surprising, but it was certainly not 'perverse' in the legal or any other sense. The Employment Appeal Tribunal justified its own conclusion by saying:

 

'Standing back and looking at the matter in the round, what we have to ask is whether these applicants [the respondents] can be said to have been carrying on business on their own account. We can well understand that casuals who have their services to sell, and sell them in the market to whoever needs them for the time being, can be said to be in business on their own account in the marketing or selling of their services; but we find it difficult to reach that conclusion in a situation where the services are, in fact, being offered to one person only against a background arrangement (albeit not contractual) which requires the services to be offered to one person only and which involves a repetition of those contracts (albeit under no obligation to do so) as is shown by the weekly pay packet, the holiday pay and other matters of that kind. In our judgment, each of these individual contracts is a contract of employment, not a contract for services.' This must involve a misdirection on a question of law or every independent contractor who is content or able only to attract one client would be held to work under a contract of employment. Indeed, I could as well point out that what distinguishes the respondents' contracts from those of waiters who admittedly work under contracts of employment is that the respondents were employed to wait at a given function and were not available to the employers for general deployment as waiters during their hours of work. But if I did so, I too should be usurping the functions of the industrial tribunal. I can detect no error of law on the part of the industrial tribunal and I would therefore allow the appeal and dismiss the cross-appeal, thereby restoring the decision of the industrial tribunal. For the reasons which are set out in the judgments which have already been given to counsel, and shown, no doubt, to their clients, the appeal is allowed, although there is a small difference between Ackner LJ, on the one hand, and Fox LJ and myself on the other hand, as to the consequential orders which should be made. Ackner LJ would have remitted the successive individual contracts point to the industrial tribunal for further consideration.

The cross-appeal is unanimously dismissed.

 

Appeal allowed. Cross-appeal dismissed. Leave to appeal to the House ofLords refused.

 

Solicitors: Linklaters & Paines (for the employers); Tess Gill, Claygate (for the respondents).

 

Frances Rustin Barrister.