Donnelly v Clyde Marine Agency [2007] NIIT 1467

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The decision of the tribunal in conducting a pre-hearing review in accordance with Rule 18 of The Industrial Tribunals (Constitution and Rules of Procedure) Regulations (Northern Ireland) 2005 is that the second, third, fourth and fifth-named respondents are dismissed from the action on the grounds that none of them was the employer of the claimant and the tribunal therefore does not have jurisdiction to hear the claim as against these respondents. The tribunal declines to make any order in respect of the claim against the first and sixth-named respondents on the basis that it did not have sufficient evidence to reach a decision on whether either of these respondents was an employer of the claimant. The case may proceed to a full hearing on the merits including jurisdiction as against the first and sixth-named respondents with no decision being reached on the issue of jurisdiction at this time.

The second and third respondents here were represented by Mr Nicholas Moore.

The first, fourth, fifth and sixth-named respondents did not appear nor were they represented.

At the beginning of the hearing the claimant indicated that he was representing himself. He stated that his Union representative could not attend. When asked to expand, he indicated that he had first spoken to the representative three days earlier on Friday 24 November 2006 and that he had not joined the Union until two weeks earlier. The claimant asked for an adjournment. This was strenuously resisted by Mr Moore. He indicated that he and his witness had travelled from England for the hearing. They had not been given any prior notice of the application. The claimant had been informed of the date of hearing on 30 August 2006 and had had ample opportunity to prepare his claim. The tribunal refused the application for an adjournment on the basis that it was not appropriate to adjourn where no notice had been given of the application, the claimant had sufficient time to prepare his claim and it was not in the interests of justice to delay the hearing.

The tribunal heard evidence from the claimant and from Mr Peter John Ambrose, Human Resources Manager of the fleet on behalf of the second and third-named respondent. The tribunal was provided with two bundles of documents, one from the claimant and one from the second and third-named respondent.

The tribunal had received a written submission from the first-named respondent prior to the hearing and had received a letter dated 12 May 2006 from the sixth-named respondent.

The claimant claimed that he had been unfairly dismissed by the first, second and third-named respondents. During the course of proceedings and as a result of information received by the tribunal, the fourth, fifth and sixth-named respondents were joined to the proceedings. The first-named respondent lodged a response denying it employed the claimant. The second and third-named respondents lodged a response denying they employed the claimant. The fourth-named respondent did not lodge a response. The fifth-named respondent did not lodge a response and it was submitted by the representative for the second and third-named respondents that it had not been served with the proceedings. The sixth-named respondent confirmed that the claimant was on its payroll between 2 June 2004 and 9 September 2005.

In view of the provisions of Article 3 and Article 242 of the Employment Rights (Northern Ireland) Order 1996 does the tribunal have jurisdiction to consider the claim against the respondents or any of them. In other words was the claimant an employee of the employment agency, the first-named respondent, or was he the employee of the client of the employment agency's off-shore company, the second-named respondent or was he the employee of the company paying his wages, the sixth-named respondent or was he not an employee at all.

The evidence given by the claimant was credible and reasonably consistent if evasive on some issues. It is fair to say that the thrust of the claim form was that Clyde Marine Agency was the employer whereas at hearing the claimant indicated that he thought he was employed by P & O. However in view of the uncertainty of the law surrounding agency/temporary employees this is understandable and is not something which influenced the tribunal. The evidence given by the respondents' witness was consistent and credible. There was very little conflict in the evidence.

Clyde Marine Recruitment Ltd (hereafter Clyde Marine) is a recruitment agency specialising in the recruitment of seafarers for and on behalf of a large number of owners, operators and managers of seagoing vessels, including P & O Ferries Group.

To take advantage of a legal arrangement for saving National Insurance costs, a large number of UK seafarers are paid by companies based outside the U.K. This is to ensure that the employment of UK seafarers remains competitive. Clyde Marine appears to have a relationship with Guernsey Crewing Services Ltd regarding seafarers on its books. The tribunal was unable to reach a firm decision on the nature of this relationship in the absence of further evidence from either the first or sixth-named respondents. However, the second-named respondent provided a copy of a Management Agreement (the Management Agreement) dated 1 February 2004 between P & O Ferries Ltd, the second-named respondent, and Guernsey Crewing Services Ltd, the sixth-named respondent. Under this agreement, the second-named respondent appointed the sixth-named respondent to employ and provide suitably qualified officers and ratings to man and operate the vessels listed in the appendix thereto. The ship named The European Mariner, a P & O vessel, was added to the appendix sometime after 1 February 2004 and probably in June 2004. In return for providing the services listed at Clause 2 of the Management Agreement, Guernsey Crewing Services Ltd would receive remuneration and expenses from P & O Ferries Ltd. The tribunal was provided with a sample invoice indicating how the agency invoiced P & O Ferries Ltd for the seafarers it provided. The tribunal noted that this invoice was actually from Clyde Marine Guernsey Ltd but the tribunal accepted that a similar invoice would be raised by Guernsey Crewing Services Ltd for the period of its involvement.

It would appear that Clyde Marine act as the onshore recruitment centre for Guernsey Crewing Services Ltd as Guernsey Crewing Services Ltd are unable to have a place of business onshore. The day-to-day dealings are dealt with between P & O Ferries and Clyde Marine. We find the written submission from Clyde Marine to be disingenuous.

The claimant was supplied through Clyde Marine to work as a rating seafarer on P & O Ferries' services on the Irish Sea. He joined The European Mariner by 4 January 2003 at the latest. The claimant was unable to give exact dates for his employment but the bundle of documents from the second-named respondent contained a letter dated 4 January 2003 from Clyde Marine Guernsey Ltd (not a party to the proceedings) to the claimant indicating that his joining date would be 4 January 2003. Interestingly, this letter begins:-

“Further to your recent communications with Clyde Marine Recruitment Ltd, we would like to confirm the following temporary employment.”

The tribunal was also provided with the claimant's pay-slips from Clyde Marine Guernsey Ltd between September 2002 and 28 May 2004. Thereafter the pay-slips for the period from 2 June 2004 to 9 September 2005 were from Guernsey Crewing Services Ltd, the sixth-named respondent. The sixth-named respondent has accepted by letter of 12 May 2006 that the claimant was on their payroll between these dates.

The second-named respondent provides onshore administrative support to the P & O Ferries services nationally including the Irish Sea route on which The European Mariner operated.

To take advantage of the aforementioned, legal arrangement for saving National Insurance costs, seafarers directly employed by the P & O Ferries group are employed offshore through associated companies incorporated under the laws of and headquartered in Gibraltar. The employing company for the Irish Sea P & O services is the fifth-named respondent.

The claimant worked on The European Mariner from at least 4 January 2003 and possibly a few months before on a week on/week off basis until August 2005. The claimant gave conflicting evidence as to the length of time on his ship and as to the mode of his employment. He stated that for some time after joining the ship he simply turned up every second Wednesday as this was the changeover day. Then this changed and someone from Clyde Marine phoned him every second Monday or sometimes Tuesday to ask if he could join the ship on Wednesday. The claimant stated that he had received this phone call for at least a year prior to his termination. The claimant stated that if he did not want to go, he could just refuse. There was no obligation to be there. It was just to give Clyde Marine time to crew the ship. There was no problem if he did not want to go. It was basically up to him whether he joined the ship or not. If he was not available, the clerk would simply go through the computer and arrange for another agency worker to be there. However, it was very seldom that he didn't go because if he did not go, he did not get paid.

On Monday 5 September 2005, the claimant received the usual phone call from Suzanne Boyle of Clyde Marine asking him to join The European Mariner. The claimant indicated that he could. On the following day he phoned to say that he could not as he had a flood at his home and he would not be able to join until Friday 9 September 2005. After contacting The European Mariner, Clyde Marine phoned the claimant to indicate that there would be no further work for him on The European Mariner.

The claimant has been on the books of Clyde Marine since the early 1990s. He worked on a number of ships over the years until January 2003 when he took up temporary employment on board The European Mariner, a vessel owned by P & O Ferries. He was paid first by Clyde Marine Guernsey Ltd from whom he received a joining letter and terms and conditions of temporary employment. In June 2004 payment transferred to Guernsey Crewing Services Ltd. The day-to-day running of his employment was in the hands of Clyde Marine and it was the office of Clyde Marine that the claimant contacted if he wished to discuss any work issues. If he was sick or if he wanted to take extended holidays or take a day off, he contacted the office of Clyde Marine.

He provided his own work clothes and uniform. He was not specifically recruited for the job. If Clyde Marine chose to send a different seafarer when the claimant was unavailable, P & O Ferries did not have any problem with this. All P & O Ferries required was an AB seafarer.

P & O Ferries had a system of direct employment of seafarers using an associated company based in Gibraltar. It had a well defined and structured basis for dealing with discipline and grievances of its own employees which did not apply to this claimant.

The claimant did not have any direct contact with the staff of P & O Ferries apart from when he was actually on board ship. He did not discuss any work issues direct with the staff of P & O Ferries during his week off.

The claimant supplied a copy of a reference which he had obtained from Clyde Marine. This reference is dated 10 May 2005 and is on the headed notepaper of Clyde Marine. The reference had been completed by the Master of the vessel in response to a query from Clyde Marine.

The Management Agreement is clear that Guernsey Crewing Services Ltd is to employ the seafarers and is to be responsible for the following:-

5. Enforcement of all operational Health and Safety, Drug and Alcohol and other appropriate policies laid down by P & O Ferries.

There is ambiguity surrounding the decision not to provide further work for the claimant on board The European Mariner. There is some evidence that Clyde Marine were unhappy with the claimant's failure to inform them of his difficulties prior to 6 September 2005 as this left it late for them to crew the ship. The tribunal finds that both Clyde Marine and P & O Ferries had some input into the decision with the final decision being taken by Clyde Marine.

This claim raises the problems arising from a triangular employment relationship. Typically the problem arises where a worker has entered into an agreement with an employment agency on the basis that he will work for a client of the agency, the end-user. Although this particular claim is further complicated by the use of an offshore company to take advantage of National Insurance legislation, the legal issues remain basically the same. When the end-user or agency no longer wants the worker's services and the employment is terminated, the worker may wish to claim that he has been unfairly dismissed. In order to found such a claim pursuant to Article 128 of the Employment Rights (Northern Ireland) Order 1996, the worker must show that he was an employee of either the agency or the end-user. He will also have to show that he has been an employee for at least a year.

“an individual who has entered into or works under (or where the employment has ceased, worked under) a contract of employment”.

“a contract of service or employment or apprenticeship, whether express or implied and, (if it is express) whether oral or in writing”.

There is no statutory definition of the term ‘contract of service', so we must look to case law for assistance. The well known dictum of MacKenna J in Ready Mixed Concrete (South East) Ltd v Minister of Pensions [1968] 1 All ER 433 provides a useful starting point. He says:-

“I must now consider what is meant by a contract of service. A contract of service exists if the following three conditions are fulfilled:-

As to (ii) : control includes the power of deciding the thing to be done, the way in which it shall be done, the means to be employed in doing it, the time when, and the place where it shall be done. All these aspects of control must be considered in deciding whether the right exists in a sufficient degree to make one party the master and the other his servant. The right need not be unrestricted.”

This if further refined by Longmore JL in Montgomery v Johnston Underwood Ltd [2001] EWCAS iv 318 where he states:-

“mutually of obligation and the requirement of control on the part of the potential employer are the irreducible minimum for the existence of a contract of employment”.

It is clear from the authorities, particularly Dacas v Brook Street Bureau (UK) Ltd [2004] EWCA Civ 217 that the tribunal must consider the possibility of the existence of an implied contract of employment between the claimant and the end-user. It must also consider whether on the particular facts of a case a contract of employment exists between the claimant and the agency despite what the actual contract itself may state. It is stated in Dacas:-

“a contract of service may be implied, that is deduced, as a necessary inference from the conduct of the parties and the work done. As a matter of law, when an issue is raised about the status of an applicant in unfair dismissal proceedings, an employment tribunal is required to consider whether there is an implied contract between the parties who had no express contract with one another”.

However, it is clear that each case must be considered on the facts and it is further stated in Dacas that:-

“the objective fact and degree of control over the work done by the applicant for the end-user is crucial.”

Furthermore without a contract of service, as required by the statutory definition of a contract of employment the claimant cannot be treated as an employee of the end-user, in this case, P & O Ferries.

The issues as identified for the pre-hearing review included a direction to consider whether in view of the provisions of Article 242 of the Employment Rights (Northern Ireland) Order 1996 the tribunal has jurisdiction to consider the claim. The exceptions in Article 242 do not apply to claims for unfair dismissal and do not affect jurisdiction in this case.

The claimant received a joining letter from Clyde Marine Guernsey Ltd dated 4 January 2003 confirming temporary employment and providing terms and conditions of temporary employment. Clyde Marine Guernsey Ltd were taken over by Guernsey Crewing Services Ltd and in his bundle of documents the claimant has included a page entitled ‘Terms and Conditions of Temporary Employment' on the headed notepaper of Guernsey Crewing Services Ltd which is broadly similar to the earlier terms and conditions provided by Clyde Marine Guernsey Ltd.

The claimant's salary was paid by Guernsey Crewing Services Ltd but for every other aspect of his employment he dealt with Clyde Marine. He contacted Clyde Marine regarding holidays, sickness and unavailability. If he had travel expenses these would have been dealt with by Clyde Marine also. It was Clyde Marine who took the decision not to re-employ him on The European Mariner.

The tribunal declines to make a decision at this stage with regard to whether the claimant was an employee of Clyde Marine or Guernsey Crewing Services Ltd. It considers that a fair decision on this point can only be made once both of these parties have provided further evidence to the tribunal. The tribunal tends to the view that one or other of these parties is the employer. The question of continuous employment may well be an issue at a later date but is not an issue before the tribunal at this time.

The first question to be considered is mutuality of obligation. Did P & O Ferries have to provide work and did the claimant have to take it? The claimant was clear in his evidence that he did not have to turn up if he did not want to. He had simply to inform Clyde Marine that he was not available. As against this he said he had seldom taken a week off and if he had taken any time off it was for hospital appointments and the like.

In this case the claimant had a choice as to whether he turned up for work each Wednesday. If he did not wish to work at that particular time, he could simply inform Clyde Marine and they would send someone else to the ship. This goes against there being mutuality of obligation as between P & O Ferries and the claimant.

Once on board ship, he became a crew member and he was subject to the rules and regulations of P & O Ferries. P & O Ferries was under an obligation to pay for the work that the claimant did for it and he received payment in respect of such work from Guernsey Crewing Services Ltd. The claimant whilst on board ship was under an obligation to do what he was told. Therefore once on board ship there was a mutuality of obligation.

With regard to control, there appears to be no control by P & O Ferries prior to the claimant coming on board ship. Clyde Marine could send along whomsoever they wished although in practice, it had been the claimant for the vast majority of the time since at least January 2003.

Once on board ship. P & O Ferries exercised a degree of control over the claimant although it is noted that the claimant provided his own work clothes and was not subject to the same disciplinary procedures as seafarers directly employed by P & O Ferries.

The decision not to provide further work on board The European Mariner was taken by Clyde Marine after discussions with P & O Ferries. This is in contrast to the Dacas case where the decision to terminate was taken by the end-user.

In order for a contract of employment to exist, it must be a necessary inference from the conduct of the parties. The tribunal does not consider it necessary to infer a contract of employment from the conduct of the parties in this case. The position is covered by the Management Agreement and the agreement between the claimant and the agency, Clyde Marine.

In light of the facts of this case, the tribunal is not satisfied that there was sufficient mutuality of obligation and nor was there a sufficient degree of control in this case by P & O Ferries for the worker fairly to be called an employee of P & O Ferries. The tribunal therefore dismisses the claim against the second, third and fifth-named respondents.

As regards the fourth-named respondent, the tribunal could find nothing in the evidence to suggest that it was the employer of the claimant and therefore dismisses the claim against the fourth-named respondent.

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	Industrial Tribunals Northern Ireland Decisions
You are here: BAILII >> Databases >> Industrial Tribunals Northern Ireland Decisions >> Donnelly v Clyde Marine Agency [2007] NIIT 1467_05 (21 March 2007) URL: http://www.bailii.org/nie/cases/NIIT/2007/1467_05.html Cite as: [2007] NIIT 1467_05, [2007] NIIT 1467_5

Industrial Tribunals Northern Ireland Decisions