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Jersey Unreported Judgments |
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You are here: BAILII >> Databases >> Jersey Unreported Judgments >> Marchem (Europe) Limited -v- Carre [2015] JRC 075 (21 April 2015) URL: http://www.bailii.org/je/cases/UR/2015/2015_075.html Cite as: [2015] JRC 075, [2015] JRC 75 |
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Employment tribunal - application by the appellant for leave to appeal decision of tribunal.
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Before : |
Sir Michael Birt, Commissioner, sitting alone. |
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Between |
Marchem (Europe) Limited |
Appellant |
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And |
Helen Carre |
Respondent |
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Mr A. Gordon, Director for the Appellant.
Advocate M. C. Goulborn for the Respondent.
judgment
the commissioner:
1. On 14th June, 2014, by way of interim decision, the Employment Tribunal (Mrs Griffin, Deputy Chairman presiding) held that the respondent was an employee of the appellant rather than, as the appellant contended, engaged pursuant to a 'zero hours' contract. The consequence of the Tribunal's decision was that she was therefore entitled to pursue her claim for unfair dismissal.
2. The appellant appeals against that decision with the leave of the Tribunal.
3. The respondent was engaged as a bookkeeper by the appellant, which is a company providing computer support services. The appellant's engagement began on 7th July, 2012, and continued until 6th January, 2014, when it was terminated.
4. Although it was not signed at the start, it seems not to have been disputed that the respondent was engaged on the terms of a standard form of contract which stated that it was a 'zero hours' contract. It contained the following provision in that respect:-
"This is a zero-hours contract, which means that:-
We may offer You work as and when it is appropriate but We are not obliged to offer You work;
You are not obliged to accept Our offer of work; You may make Yourself available for work or not as You choose;
We shall pay You for the approved hours that You work for Us;
We shall not pay You for mistakes nor for un-approved, inappropriate or unsatisfactory work..."
5. Initially, the respondent worked for less than eight hours per week, usually on a Sunday. During the week she worked for another employer. However, in early 2013, she resigned from that other employment and made it known to Mr Gordon, a director of the appellant, that she would like to increase her hours with the appellant. There was a significant backlog of work which needed to be cleared and Mr Gordon realised that if he did not offer the respondent increased hours, she would seek employment elsewhere.
6. Both parties gave evidence before the Tribunal that, when negotiating the contract in April 2013, the respondent made it clear that she wanted to work at least 30 hours per week at £15 an hour in order to meet her regular outgoings. Mr Gordon agreed to this and inserted the following wording into the existing contract:-
"From April 2013, ordinarily We shall offer you a minimum of 30 hours of extended work a week plus 16%.
We shall not pay You for more than the ordinary hours of approved or extended work per week unless We have given You Our expressed offer or permission to work that extra time."
7. The previous provision in the contract had read "ordinarily, We shall offer you less than eight hours of work per week at mutually convenient days and times".
8. The Tribunal found that the respondent enjoyed significant autonomy in terms of the days and the hours she worked. Mr Gordon gave evidence that he was not overly concerned about how many hours the respondent worked so long as she did not work for more than 30 hours per week. He assumed that she would work 30 hours per week, not because he required her to do so but because she had been keen to negotiate that term in the contract. Mr Gordon's view was that whether she worked 30 hours per week or five hours per week was up to her. The respondent stated that she could work for 30 hours whenever she liked. The Tribunal also heard that holiday pay as set out in the contract was rolled up into a payment of 16% on top of her salary. Parking which was available seven days a week and 24 hours a day was also provided for the respondent at the cost of the appellant.
9. The Tribunal also stated that, at some stage after April 2013, the respondent asked that, rather than holiday pay being rolled up into a payment of 16% on top of her salary, she should be paid a regular salary every month (including when she was on holiday), as this would dispense with the cash-flow problems caused by the fact that she received no payment at all when she took annual leave. Mr Gordon rejected this request. There was evidence before the Tribunal that the matter had originally been raised by the respondent with Mrs Gordon who had reported to Mr Gordon that the respondent wanted to change her 'zero hours contract'. The respondent disputed that she had ever used those words.
10. The Tribunal recorded at paragraph 11 of its judgment that "there was no need to call [Mr Gordon's] wife as a witness as she would not add anything to the evidence already provided by [Mr Gordon] and there was no dispute that the meeting took place"; but it went on to find in the same paragraph that "given the [respondent's] clear understanding that she was employed to work a 30 hour week, the Tribunal considered it highly unlikely that the [respondent] would have referred to her contract as a 'zero hours' contract."
11. At paragraph 17 of its decision, the Tribunal set out what was required in order to find a contract of employment rather than a zero hours contract. Having referred to an earlier decision of the Tribunal in Pereira v Jersey Road and Driveway Repairs Limited (JET 101/2013) it said this:-
12. The Tribunal's reasoning for finding that this was a contract of employment rather than a zero hours contract was contained in four paragraphs as follows (adapted to use the same terminology as in this judgment):-
13. Article 94 of the Employment (Jersey) Law 2003 ("the Law") provides that a right of appeal to this Court lies only on a "question of law". In Voisin v Brown [2007] JLR 141 at paragraphs 18 and 19, the Court stated that the Court therefore had no power to interfere with a decision of the Tribunal unless it could be shown (a) that the Tribunal misdirected itself in law or misunderstood the law or misapplied the law; or (b) that there was no evidence to support a particular conclusion or finding of fact; or (c) that the decision was either perverse in that it was one which no reasonable Tribunal, directing itself properly on the law, could have reached, or alternatively, was one which was obviously wrong. The Court emphasised however that it reserved its position on whether the last test ('was obviously wrong') was properly a question of law or not.
14. Rather unusually, given that an appeal lies in a question of law, the Master gave leave for further evidence to be adduced by the parties. The appellant has filed affidavits by Mr and Mrs Gordon and the respondent has also filed an affidavit. The affidavits refer to the conversation between Mrs Gordon and the respondent to which reference has already been made. They show a conflict between Mrs Gordon and the respondent as to whether the respondent referred in that connection to her contract as a 'zero hours' contract. Mr Gordon's affidavit also includes some time sheets-pay slips although I have not found these to be of any assistance.
15. The appellant contended that the Tribunal had erred in law, had reached a conclusion where there was no evidence to support it and had reached a decision which was perverse. All of these were related to the Tribunal's finding that there were mutual obligations on the appellant and the respondent in relation to the 30 hours a week. It was contended that there was no evidence or reasoning to support a finding that the respondent was obliged to work 30 hours a week and this was borne out by the fact that she had not in fact done so.
16. The Tribunal has in recent times been faced on a number of occasions with an issue as to whether a person is an employee for the purposes of the law and therefore whether he can bring a claim for unfair dismissal etc. The Tribunal has held that a person who is engaged on a 'zero hours' contract is not an employee for the purposes of the law and it has therefore become important to ascertain whether a claimant is engaged under a contract of employment or not. The Tribunal has articulated the appropriate test in a number of cases and a convenient statement of the applicable principle is to be found in Mollet v Sigma Group Limited (JET 19/2013) where Deputy Chairman Davies said this at paragraph 11:-
17. In my judgment, this is an accurate statement of the position, which is to similar effect as English law. The key element is a mutuality of obligation, with the employer being obliged to provide work for the employee and the employee being obliged to accept and perform that work. See for example Carmichael v National Power Plc [2000] IRLR 43 and Windle v Secretary of State for Justice [2014] IRLR 914.
18. As can be seen, the Tribunal correctly stated the law in paragraph 17 of its decision. The question therefore for the Tribunal was whether the required mutuality of obligation existed in this case. The appellant submitted before the Tribunal that it did not. It suggested that it was not obliged to offer the respondent 30 hours work per week and she was not obliged to work that number of hours.
19. There was clearly ample evidence before the Tribunal upon which it could properly find that the appellant was indeed obliged to offer the respondent 30 hours of work a week. She had made it clear when the contract was renegotiated in April 2013 that she needed this number of hours in order to meet her outgoings. Furthermore the contract was amended to include the provision described at paragraph 6 above and the Tribunal was clearly entitled to find that this later addition overrode the original provision (quoted at paragraph 4 above) to the effect that the appellant was not obliged to offer work to the respondent.
20. The more difficult issue was whether the respondent was obliged to work those 30 hours, so that there was the necessary mutuality of obligation. In this respect a key piece of evidence produced to the Tribunal and much relied upon by Mr Gordon was a graph showing that the respondent in fact worked less than 30 hours for more than half the weeks which followed the renegotiation in April 2013. This does not appear to have been disputed. The point made strongly by Mr Gordon is that this is inconsistent with an obligation on the part of the respondent to work 30 hours a week.
21. In response, Advocate Goulborn made the point that, in a number of weeks, she worked more than 30 hours and that if one took the overall average, it was reasonably close to 30 hours. The response from Mr Gordon was that the contract specifically provided that she was not allowed to work more than 30 hours in any particular week without approval and this was something which he had sought to enforce by deduction once he had discovered it.
22. The fact that the respondent had not in fact worked 30 hours every week was clearly a highly significant factor in deciding whether she was obliged to work such hours. Yet the judgment of the Tribunal simply does not mention this aspect at all. Furthermore, the reasons given in the judgment do not satisfactorily address the issue of whether the respondent was obliged to work the 30 hours. Thus paragraph 18 refers to the conflict between the 30 hour's clause and the zero hour's clause in the contract. It finds (correctly) that the fact that the 30 hour's clause was more recent and had been negotiated between the parties following the respondent's request meant that it took precedence. It said (again correctly) that this gave the respondent a legitimate expectation of this amount of work. However, although it states that the mere existence of the 30 hour clause in these circumstances 'would have been sufficient to satisfy the Tribunal that there was a mutuality of obligation between the parties', it does not explain why that is so, particularly in the light of the evidence that the respondent had in fact not worked 30 hours a week.
23. Paragraph 19 of the judgment refers to there being an expectation on the part of the appellant that the work would be carried out. I can well understand that finding given that it was the respondent who had said that she wanted to work 30 hours in order to pay her way, but an expectation is different from an obligation.
24. The same comment applies to the reasoning in paragraph 20 of the judgment. There, the reference is to an expectation on the appellant's part that the respondent would carry out her work with little supervision but that again does not seem to me to lead to the necessary conclusion that she was obliged to work 30 hours a week.
25. It is true that in its final paragraph the Tribunal finds that there was a mutuality of obligation; but, in the absence of any consideration in its reasoning as to whether the respondent was obliged to work 30 hours every week (particularly in the light of the evidence that she had not in fact done so) rather than that there was simply an expectation that she would do so because that was what she wished to do, I find that the Tribunal erred in law. It failed in reality to consider whether there was the required mutuality of obligation because, although it considered whether the appellant was obliged to offer the respondent 30 hours work a week, it never properly addressed the issue of whether the respondent was obliged to accept that offer and work for 30 hours.
26. Mr Gordon raised an additional argument. He stated that the Tribunal had followed an unfair procedure. It is to be recalled that there was an issue as to whether the respondent had referred to her contract as a 'zero hours' contract when she had raised the question of the rolled up holiday pay with Mrs Gordon. The Tribunal was informed that Mrs Gordon would say that the respondent had used this expression. The Tribunal records at paragraph 11 of its decision that it decided that there was no need for Mr Gordon to call his wife as a witness. Yet the Tribunal in its judgment concluded that it was 'highly unlikely' that the respondent would have referred to her contract as a zero hours contract. It did in effect make an adverse finding in relation to Mrs Gordon's evidence without allowing her the opportunity of giving evidence. That was clearly an unfair procedure. It is not appropriate for a tribunal to say that it does not wish to hear from a witness and then make an adverse finding against that witness.
27. As it happens, were that the only ground of appeal, I would not have allowed the appeal. Following the Master's order, I have received affidavits on the point. Mrs Gordon and the respondent disagree as to whether the respondent used the expression 'zero hours' contract during that conversation. But it seems to me of very marginal significance. Whether the respondent did or did not refer to her contract as a zero hours contract in an informal conversation with Mrs Gordon cannot affect whether, having regard to the applicable legal test, the agreement she had with the appellant was in truth a contract of employment or a zero hours contract.
28. Nevertheless, for the reasons given earlier, I hold that the Tribunal erred in law in that it did not consider whether the respondent was obliged to work 30 hours a week so that there was the necessary mutuality of obligation needed for a contract of employment.
29. As the Court stated in Brown v Voisin at para 59, where this Court finds that the Tribunal has erred in law, the Court must remit the case to the Tribunal unless there is only one rational conclusion which the Tribunal can properly reach.
30. That is certainly not the case here. There are clearly a number of significant arguments in favour of the contention that the respondent was indeed obliged to work the 30 hours, which are to be set against those put forward by the appellant by reference to the hours which the respondent actually worked and the other matters upon which the appellant relies. My decision in this case is not to the effect that the Tribunal reached the wrong answer; far from it. My decision is simply that, although the Tribunal referred to the correct legal test, it did not in fact thereafter ask itself the right question, namely whether the parties were mutually obliged in respect of the 30 hours. It will be a matter for the Tribunal in due course to consider whether there was such a mutual obligation or not.
31. In those circumstances, the case must be remitted to a differently constituted Tribunal to decide the matter afresh.
32. In his skeleton argument, Advocate Goulborn referred to Article 1A of the Law which provides as follows:-
33. Advocate Goulborn submitted that in all the various cases which the Tribunal has considered zero hours contracts, the Tribunal has focused only on paragraph (2) of Article 1A, which does indeed require a contract which has the required mutuality of obligation so as to amount to a contract of employment.
34. However, he submitted that paragraph (3) of Article 1A is an additional means whereby a person can be treated as an employee and therefore have the right to sue for unfair dismissal etc. He submitted that, even if the respondent in this case could not bring herself within paragraph (2) (because of the lack of mutuality of obligation); she fell within paragraph (3).
35. I refused leave for Advocate Goulborn to develop that argument before me. It had not been raised before the Tribunal. The parties had therefore not produced any evidence which was aimed at dealing with paragraph (3), nor had any argument been addressed to the Tribunal on the topic. I considered therefore that it would be inappropriate to allow the point to be taken for the first time on appeal.
36. However, when the matter returns to the Tribunal, it will be open to Advocate Goulborn to make any such argument before the Tribunal and to adduce any relevant evidence. In making this observation, I am not expressing any view on the merits of the argument. I have not considered it nor have I read any Jersey or English authority on the point.
