APPEARANCES
For the Appellant |
MR JAMES WYNNE (Of Counsel) Instructed by: Messrs Copley Clark and Bennett Solicitors Pathtrace House 91-93 High Street Banstead Surrey SM7 2NK |
For the Respondents
|
MR STEVEN LANGTON (Of Counsel) Instructed by: Messrs Levenes Solicitors Ashley House 235-239 High Road Wood Green London N22 8HF |
SUMMARY
Employment Rights Act 1996, section 230
Whether, upon the true construction of an agreement for the provision of services, the appellant was an "employee" or a "worker" within the meaning of section 230 of the Employment Rights Act 1996.
THE HONOURABLE MR JUSTICE RIMER
- This is an appeal by Mr Alan Green against a judgment of an employment tribunal sitting at London South on 9 July 2004 and chaired by Mr A.M. Snelson. The tribunal's reasons were sent to the parties on 6 October. The hearing was devoted to the question of whether the tribunal had jurisdiction to hear Mr Green's complaint that he had been unfairly dismissed, was owed holiday pay and had suffered unlawful deductions from his wages. The respondents were the St Nicholas Parochial Church Council ("the Council") and The Reverend Sara Goatcher, the Rector of the Parish ("the Rector"). Mr Green accepted before the tribunal that his claim, if any, lay only against the Council and not against the Rector.
- Mr Green's complaint was based on his claim that the Council were his former employers. The Council's position was and is that Mr Green had never been an employee of theirs under a contract of employment and so was not entitled to bring a claim for unfair dismissal. They claim he was self-employed. They also deny that he had any basis on which to bring a claim for holiday pay or unlawful deduction from wages.
- It was agreed before the tribunal that (a) a pre-condition to the running of Mr Green's unfair dismissal claim was that he had been an "employee" of the Council: see section 94(1) of the Employment Rights Act 1996 ("the ERA"); and (b) that a pre-condition to the running of his other claims was that he had been either such an employee or that his working relationship with the Council had been that of a "worker". The definitions of an "employee" and a "worker" for relevant purposes are in section 230 of the ERA, headed "Employees, workers etc". Section 230 provides, so far as material:
"(1) In this Act 'employee' means an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment.
(2) In this Act 'contract of employment' means a contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing.
(3) In this Act 'worker' (except in the phrases 'shop worker' and 'betting worker') means an individual who has entered into or works under (or, where the employment has ceased, worked under) –
(a) a contract of employment, or
(b) any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual;
and any reference to a worker's contract shall be construed accordingly."
- The tribunal held that Mr Green was neither an "employee" nor a "worker" within those definitions, with the consequence that they had no jurisdiction to hear his complaints. Mr Green's appeal is against that decision. He was represented before us, as before the tribunal, by Mr James Wynne. The Council was represented before us, as before the tribunal, by Mr Steven Langton.
The decision of the employment tribunal
(a) Preliminary
- Mr Green is a musician. He had been a school teacher until he retired from teaching in 1998. From 30 March 1986 until 31 December 2003, he also served as the director of music at St Nicholas Parish Church in Sutton. His claim to the tribunal followed the termination of his services as such director.
- When Mr Green started as music director of the Church in 1986, his position was governed by an oral agreement with the then rector. His title was organist and choir master. He was paid monthly, with tax deducted at source. He was not provided with payslips. His main duty was to play the organ at services on Sundays and holy days. When called on to play at weddings and funerals, he was paid extra. His duties included training the choir and producing a weekly music sheet. The rector made the decisions as to the musical components of the various services. If Mr Green could not attend any morning service, the rector would usually arrange cover. If he could not attend an evening service, there would usually be no music.
- In 1994, Mr Green ceased to be taxed at source, but otherwise there was no change to the arrangements save that in about the mid-1990s he started submitting invoices for what he called his "fees" in respect of his services as music director. He presented these monthly and each was for one-twelfth of his annual payment agreed from time to time. By agreement, he also put in claims for parking expenses.
- In about 2002, the Rector told Mr Green she wanted his relationship with the Church to be formalised in a written agreement. He agreed and obtained two standard forms of agreement from the Royal School of Church Music, one purporting to be applicable to an "employed" director of music and the other to a "self-employed" such director. The latter draft was used and, after some negotiation as to its terms, a form of agreement was agreed between the Council, Mr Green and the Rector and was signed on 15 January 2003. The issues before the tribunal turned on its terms, which we now summarise.
(b) The agreement dated 15 January 2003
- The agreement is described on its cover sheet as an "ISM [Incorporated Society of Musicians] Contract for Services (Self-Employed) for use in Church of England, Roman Catholic and Non-Conformist Churches" and as "An Agreement for the Appointment of a Director of Music." The parties were the Council, the Rector and Mr Green.
- By clause 1(a), the Rector, with the Council's agreement, appointed Mr Green to be the director of music in the Church with effect from 1 January 2003. Clause 1(b) provided that:
"In consideration of the fees specified in clause 4, the Director of Music shall provide the services as a musician and perform the other obligations specified in clause 2 subject to clause 3."
- Clause 2 is headed "Services as a Musician" and imposed on Mr Green the duties set out in its seven sub-paragraphs. He is referred to in each sub-paragraph and elsewhere in the agreement as "The Director of Music", but in our quotations we shall abbreviate such references to "[He]", ["him]" or "[His]". Clause 2 provided that:
"2(a) [He] shall be responsible to the Rector for the care, control and general oversight of all the music and the music team in the Church.
(b) [He] shall play the organ and direct the choir at all the ordinary weekly services listed in [Schedule A] [these were the 10.30 Parish Eucharist service on Sundays and the Holy Communion service on the first Sunday of the month].
(c) [He] shall play the organ at Services on Holy Days … listed in [Schedule B] [these were Easter Day and Christmas Day and, if required, Ash Wednesday, Maundy Thursday, Christmas Eve and Patronal and other Holy Days].
(d) [He] shall play the organ at all weddings, funerals and special services not listed in Schedules A and B whenever music is used.
(e) [He] shall from time to time at the request of the Rector attend meetings of the Council and its sub-committees where music and the liturgy are to be discussed.
(f) [He] shall devote adequate time to the preparation and planning of music.
(g) [He] shall oversee the supervision of the care and maintenance of the Church's organ and other musical instruments."
- Clause 3, headed "Deputies", is central to the debate and provided:
"3. [He] shall be entitled to delegate some or all of the above duties to a competent assistant or deputy at his discretion, subject to the approval of the Rector, not to be unreasonably withheld."
- Clause 4, headed "Fees", provided:
4 i) The Council shall pay an annual honorarium of £1,020 to [him] to cover all his services as set out in Schedule A, Schedule B and clause 17.
ii) [His] fees for playing the organ at weddings/wedding blessings shall be a minimum of £70 per service.
iii) [His] fees for playing the organ at funerals/memorial services shall be a minimum of £50 per service.
iv) [His] fees for playing the organ at other special services shall be a minimum of £50 per service."
- Clause 5 required Mr Green to render an invoice for his fees at the end of each month and clause 6 provided for their annual renegotiation. Clause 7, headed "Choir", provided:
"7 (a) [He] shall be responsible for the membership of the choir, subject to the approval of the Rector.
(b) [He] shall be solely responsible for the training of the choir and shall arrange adequate rehearsals for this purpose."
- Clause 8 reserved the Church organ to the sole use of Mr Green and his pupils, deputies and assistants. Clause 9, headed "Exclusivity", provided:
"9. [He] shall have the sole right to play and direct the choir at all services at the Church whenever music is requested. [He] may, at his discretion, permit some other competent person to play at any such service but in that event [he] shall be entitled to receive the fee as specified in clause 4 above."
- Clause 10, headed "Recordings", imposed (by sub-paragraph (a)) a general prohibition on the recording of Mr Green's performances without his written consent but (by sub-paragraph (b)) permitted recordings for non-commercial purposes subject to the payment to him of certain additional performance fees. Clause 11 required him to provide his own organ music and provided that the Council was not responsible for his music or equipment whilst it was on church premises.
- Clause 12(a) provided that "No part of this Agreement shall be deemed to constitute a contract of employment" and clause 12(b) made Mr Green liable for his own income tax and NI contributions. Clause 13 provided for the agreement to terminate automatically on 31 December 2003 and also for its earlier termination by either side on three months' notice or on breach of contract and by the Council for gross misconduct. Clause 15 provided that the agreement was subject to the provisions of Canon B20 of the Canons of the Church of England, the tribunal explaining in paragraph 4.7 that:
" … That Canon provides (paragraph 1) that, generally speaking, powers to appoint, and terminate the appointment of, Directors of Music are exercisable by the Minister with the agreement of the Church Council. Paragraph 2 states that the Minister must heed and consider the advice of the Director of Music, but retains ultimate responsibility for the choice of music."
- Clause 16 provided for the agreement to be governed by English law. Clause 17, in a section headed "Additional Terms", provided that
"[He] shall play the organ at those United Services agreed by the Ecumenical Churches Council to take place at St Nicholas and, in addition, at any other ecumenical service, to take place at St Nicholas, to be conducted under the umbrella of Churches Together in Sutton and Cheam as shall be agreed in consultation with the Rector."
- Clause 18 entitled him to five weeks' holiday in each calendar year to be taken at times to be agreed, with the Council defraying the cost of supplying a deputy for those five weeks.
- Following the termination of the agreement in December 2003, the Council declined to renew it. The Council had informed Mr Green of its intention to that effect on 15 December 2003. Mr Green's claim to the employment tribunal followed in March 2004. The primary case advanced on his behalf was that his status under the agreement was that he was an "employee" within the meaning of section 230(1) of the ERA. The alternative argument was that he was a "worker" within the meaning of section 230(3). On either basis, it was submitted that the description of the legal nature and effect of the agreement, in particular on the cover sheet and in clause 12(a), was not conclusive. The Council's case was that, whilst that description was not conclusive, it was in fact entirely accurate and that there was no employee or worker relationship between them and Mr Green.
(c) The tribunal's conclusion
- The tribunal referred to four authorities to which we shall also come. They found that, prior to the 2003 agreement, Mr Green had been self-employed and that there was no change in the nature of the relationship when the parties entered into the 2003 agreement. As a matter of interpretation, they found that the power of delegation in clause 3, even though it only purported to extend to the "above" duties (i.e. those listed in clause 2), also extended to the duties in clause 7, which was "below". But if they were wrong on that, they held that the power of delegation in clause 3 anyway extended to a very substantial part of Mr Green's duties and was therefore such as to be incompatible with either an employment contract or with the status of a worker. They said, in paragraph 12, that:
"… The power to delegate was not exceptional and was not the subject of any variation. Nor was it a sham. There was no mutuality of obligation."
- They did not regard the holiday arrangements in clause 18 as pointing to a different conclusion, saying that:
"… On the face of it an express entitlement to five weeks' holiday might be thought to assist the Claimant's arguments but the true meaning and purpose of the provision is, we think, clear from the final sentence, which specifies that it is for [the Council] to meet the costs of supplying a deputy during those weeks of absence. This obligation frees the Claimant from the burden which, throughout the rest of the year falls upon him to arrange a deputy whenever he is unable or unwilling to attend the Church himself."
- They held that the two authorities providing the best guidance as to the destiny of the case were Express & Echo Publications Ltd v. Tanton [1999] IRLR 367 and Staffordshire Sentinel Newspaper Ltd v. Potter [2004] IRLR 752.
(d) The appeal to this tribunal
- Mr Wynne, for Mr Green, criticised the tribunal's conclusion that there was no mutuality of obligation between the Council and Mr Green. If there was no such mutuality, then there would have been no contract between them at all and that would have been the end of the matter. In our view the tribunal were mistaken in regarding this case as raising any issue as to the mutuality of obligation. Putting the matter shortly and generally, the agreement obliged Mr Green to provide certain musical services for which the Council was obliged to pay him. We disagree with the tribunal that there was any relevant lack of mutuality of obligation, although we do not understand the tribunal to have decided the case on this basis. The critical question was whether or not the January 2003 agreement constituted a contractual relationship between Mr Green and the Council in the nature of employer/employee or employer/worker. The tribunal's decision was that it did neither.
- As to whether there was a contract of service rather than a contract for services or whether Mr Green was a worker, Mr Wynne recognised that it is a characteristic of a contract of service and of the status of a worker that the employee/worker must undertake to serve his employer personally. It is this feature that was at the heart of the question of whether Mr Green was an employee or worker; and the tribunal decided that, because of the power of delegation conferred by clause 3, Mr Green owed no duty to serve the Council personally: he could delegate all or at least a very substantial part of his duties. Therefore he was neither an employee under a contract of service nor a worker. Before focusing on the facts, we will refer to five authorities on this topic.
- A usual starting point in this area of the law is Ready Mixed Concrete (South East) Ltd v. Minister of Pensions and National Insurance [1968] 2 QB 497, in which MacKenna J said, at page 515:
"A contract of service exists if these three conditions are fulfilled. (i) The servant agrees that, in consideration of a wage or other remuneration, he will provide his own work and skill in the performance of some service for his master. (ii) He agrees, expressly or impliedly, that in the performance of that service he will be subject to the other's control in a sufficient degree to make that other master. (iii) The other provisions of the contract are consistent with its being a contract of service.
I need say little about (i) and (ii).
As to (i). There must be a wage or other remuneration. Otherwise there will be no consideration, and without consideration no contract of any kind. The servant must be obliged to provide his own work and skill. Freedom to do a job either by one's own hands or by another's is inconsistent with a contract of service, though a limited or occasional power of delegation may not be: see Atiyah's Vicarious Liability in the Law of Torts (1967) pp. 59 to 61 and the cases cited by him.
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.
'What matters is lawful authority to command so far as there is scope for it. And there must always be some room for it, if only in incidental or collateral matters.' – Zuijs v. Wirth Brothers Proprietary, Ltd. (1955) 93 CLR 561, 571'"
- That passage contains a valuable summary of the essentials of a contract of service, and recognises that, whilst such a contract requires an obligation by the employee to provide his own work and skill, a limited or occasional power of delegation may not be inconsistent with the existence of a contract of service.
- Later authorities have considered the extent to which the existence of such a power of delegation is consistent with a contract of service. The first in time to which we will refer is Express and Echo Publications Ltd v. Tanton [1999] IRLR 367, a decision of the Court of Appeal. It concerned a contract for the provision of the services of a contractor whose duty was to act as a driver for the delivery of newspapers. Under the agreement, the contractor received a fixed fee per journey but clause 3.3 provided that if he was unable or unwilling to perform the services personally, he must arrange at his own expense for another to perform them. He had, however, to satisfy the company that such relief driver was trained and suitable for the task. Peter Gibson LJ, who delivered the leading judgment, referred to the passage we have cited from the Ready Mixed Concrete case and held that, as clause 3.3 excused the contractor from performing any of the services under the contract personally, the contract did not include that irreducible element of personal obligation that is essential for the relationship between employer and contractor to be that of employer and employee. The contract was not, therefore, a contract of service, it was a contract for services.
- MacFarlane and another v. Glasgow City Council [2001] IRLR 7 is a decision of this appeal tribunal. It raised the question of whether the applicants, who were gymnastic instructors working at sports centres operated by the respondent Council, were employees of the Council. One of the terms on which they were engaged was described as follows by Lindsay J in paragraph 3 of his judgment:
"Next came a provision to which great importance was attached, as will later appear; the tribunal held:
'If for any reason, one of the applicants was unable to take a class, she would contact a replacement from the register of coaches maintained by the respondents, and arrange for her class to be covered by a member on the register.'
It is to be noted that it was the applicant who was enabled to select the replacement coach rather than the council, but that the substitute had to come from the council's list. The arrangement for the replacement was made by the applicant, not the council. It is to be noted, too, that this provision for substitution would only be available where an applicant was 'unable' to take a class, albeit that the inability could be 'for any reason'."
- Lindsay J referred to Tanton and pointed out, in paragraph 10, that clause 3.3 in the Tanton contract dealt, inter alia, with occasions when the individual was merely unwilling to perform though not unable to perform. He said, in paragraph 13, that clause 3.3 was extreme, in that the individual, at his own choice, need never turn up for work and could profit from his absence if he could find a cheaper substitute – he could choose the substitute and then in effect be the master. In paragraph 11, Lindsay J distinguished Tanton on four grounds:
"… First, the appellants in our case could not simply choose not to attend or not to work in person. Only if an appellant was unable to attend could she arrange for another to take her class. Secondly, she could not provide for anyone who was suitable as a replacement for her but only someone from the council's own register. To that extent the council could veto a replacement and also could ensure that such persons as were named on the register were persons in whom the council could repose trust and confidence. Thirdly, the council itself sometimes organised the replacement (without, it seems, protest from the appellant concerned that it had no right to do so). Fourthly, the council did not pay the appellants for time served by a substitute but instead paid the substitute direct. …".
- The appeal tribunal's conclusion was that, without in any way questioning the correctness of Tanton, that authority had not obliged the employment tribunal to hold, as it had, that the instant contract had been one for services rather than of service. The quoted passage in the Ready Mixed Concrete case showed that even an employee under a true contract of service has, or may have, at least a limited power to delegate, and Peter Gibson LJ had referred to that passage in Tanton. The nature of the delegation provision in the instant contract was not one which compelled a conclusion that the contract was one for services rather than of service. The appeal tribunal remitted the matter to the employment tribunal for re-consideration in the light of all the relevant facts.
- Byrne Brothers (Formwork) Ltd v. Baird and others [2002] IRLR 96 is another decision of this appeal tribunal, the judgment being delivered by Mr Recorder Underhill QC. The issue in the appeal was whether, as the employment tribunal had held, the applicants (who worked in the building trade) were "workers" within the meaning of the Working Time Regulations 1998, the definition of a "worker" in those Regulations being identical to that in section 230(3) of the ERA. The critical provision in the terms under which the applicants were employed was clause 13, which provided:
"13. The subcontractor is free to employ at his own cost whatever suitably trained additional labour which may be necessary to fulfil the requirements of the agreement. Where the subcontractor is unable to provide the services the subcontractor may provide an alternative worker to undertake the services but only having first obtained the express approval of the contractor."
- The appeal tribunal held, in paragraph 11, that it was plain that the contracts required the subcontractors personally to perform work or services for the contractor. They held, in paragraph 12, that there was nothing in clause 13 which derogated from that to an extent sufficient to give the subcontractor "a blanket licence to supply the contractual services through a substitute." They said that the first sentence of clause 13 was not concerned with the employment of substitutes at all and was, in effect, irrelevant to the point. Mr Underhill continued:
"(2) Although the second sentence does indeed allow the subcontractor to provide a substitute, it only does so 'where [he] is unable to provide the services'. Again, the exact scope of that phrase may be somewhat vague, but we cannot construe it as allowing him to provide a substitute whenever he chooses: if that were the intention, those words would be simply redundant.
(3) A substitute worker may only be supplied with the prior approval of the contractor. No doubt there is scope for argument as to the extent of the contractor's entitlement to withhold approval: perhaps he would only be entitled to do so on reasonable grounds. But that does not seem to us to mean that the contract cannot be regarded as a contract to supply personal services."
- Mr Underhill went on to say that the tribunal regarded that decision as consistent with the authorities, in particular with the limited power of delegation recognised by MacKenna J in Ready Mixed Concrete. He cited the passage from Atiyah to which MacKenna J had referred, part of that passage reading:
"… it seems reasonably clear that an essential feature of a contract of service is the performance of at least part of the work by the servant himself. If, therefore, the person in question is entitled to delegate the entire performance of the work to another, it is thought that this would be conclusive against the contract being a contract of service. …"
- Mr Underhill continued, in paragraph 14, by explaining that it was "a matter of assessment in relation to any given contract whether such delegation as may be permitted means that the contract cannot be regarded as a contract of service" and he referred to Tanton and MacFarlane as falling on different sides of the dividing line. The appeal tribunal's decision was that the case before them fell within the ratio of MacFarlane rather than that of Tanton.
- Finally, we were referred to Staffordshire Sentinel Newspapers Ltd v. Potter [2004] IRLR 752, another decision of this appeal tribunal, the judgment being delivered by His Honour Judge Peter Clark. The appeal raised the question of whether the engagement of the applicant as a home delivery agent ("HDA") constituted a contract of service or one for services. Clause 5.2 of the relevant agreement provided:
"5.2 Subject to clause 9.2 below the HDA is not required to [discharge his/her operational responsibilities] personally and in the event that he/she does not want to do so for any reason (including holiday) or is unable to do so for any reason (including illness) the HDA will ensure that he/she engages suitable people to ensure that his/her obligations under this agreement are fully complied with."
- In light of that provision, the point was taken that there was lacking one of the irreducible minima of a contract of service, namely the obligation to provide personal service. This tribunal was referred to Tanton and MacFarlane. HH Judge Clark said that both cases were entirely consistent with each other as a matter of principle and that, as in Tanton, clause 5.2 of the instant case made the engagement inconsistent with a contract of service.
- Reverting to the facts of the present case, the employment tribunal said they were satisfied that the parties had always intended Mr Green to be self-employed and understood that he was, and that there was no change in that respect when he was engaged under the January 2003 agreement. They found, as a matter of construction, that clause 3 empowered him to delegate all his duties as a musician; alternatively, if clause 3 did not extend to the clause 7 duties, it at least empowered the delegation of a very substantial part of his duties as such. They held that the power to delegate was not a sham, and that the extent of the power of delegation was such as to be incompatible with Mr Green's status being that of an employee or a worker.
- We say straight away that we do not regard Mr Green's claim that the effect of the January 2003 was to constitute him an employee under a contract of service as obviously brimming with merit. The parties could hardly have tried harder to make it plain that they did not intend the agreement to constitute him such an employee. The cover sheet describes the contract as relating to a "self-employed" music director; and clauses 1(b), 2 and 4 describe Mr Green's respective duties and rewards in terms which would not usually be found in a contract of employment. The reward for his core duties under clauses 2 and 17 is expressed in clause 4(i) as being an annual "honorarium" of £1,020, the ordinary meaning of an honorarium being a voluntary payment for professional services rendered without the normal fee; and the reward for the performance of his other, more occasional, services, is by way of the "fees" specified in clause 4(ii) to (iv), such fees being expressed as being "minimum" ones: presumably they could be increased by agreement. We would not regard it as usual for an employee to be rewarded by way of such fees and a so-called honorarium. Other provisions of the agreement also point away from any intention on the part of the parties to create a contract of service. Apart from the delegation power in clause 3, upon which most of the argument turned, we refer to: (i) clause 8, which gave Mr Green sole use of the organ, the Council thereby surrendering any right to control its use during the currency of the agreement; (ii) clause 10, by which (subject to a limited qualification and on payment of an additional fee) Mr Green dictated the rules as to whether any of his performances could be recorded, reproduced or transmitted; and (iii) clause 12, both provisions of which point expressly away from any intention to create a contract of employment.
- Mr Green's case is, however, that despite all these indicia pointing away from there being a contract of service that was in fact the true nature of the agreement. His case is that the agreement required him to render his own personal services to the Council in exchange for monetary reward so that, as a matter of law, he was the Council's employee under a contract of service. We agree that if that is an accurate summary of the substance of the agreement, then it may well follow that the employment tribunal misdirected themselves in concluding that the agreement did not constitute Mr Green either an employee under a contract of service or a worker. The question is whether the submission is correct.
- The central reason why the tribunal concluded that the contract was not one of service, and why Mr Green was not a "worker", was because they regarded clause 3 as entitling him to delegate to others the performance of all, or at least a very substantial part, of his duties. They held that the case was, therefore, governed by the principle of cases such as Tanton and Potter.
- Mr Wynne submitted that the tribunal were in error in so concluding. He recognised the divide between the types of clause considered in Tanton and Potter on the one hand, and MacFarlane and Byrne on the other. He submitted, however, that clause 3 in the present case was almost identical to the relevant clause in Byrne and was very different from the unfettered power of delegation in Tanton or Potter.
- With respect to that argument, we are unable to agree with it. In our judgment, clause 3 was significantly different from the clause in Byrne and was in substance identical to that in Tanton. In Byrne, the right of substitution arose only when the subcontractor was "unable" to provide the required services; and in such circumstances he first had to obtain the contractor's express approval of the proposed substitute. By contrast, in the present case clause 3 empowered Mr Green to delegate "some or all" of the clause 2 duties "to a competent [substitute] at his discretion, subject to the approval of the Rector, not to be unreasonably withheld." The power of delegation was therefore capable of being exercised in respect of all the clause 2 duties, and not merely if (as in Byrne) Mr Green was unable to perform them himself but also (as in Tanton) if he was unwilling to do so. Not surprisingly, he could only delegate the powers to a competent substitute, and had to obtain the Rector's consent to the proposed substitute, such consent not to be unreasonably withheld. But that qualification was no different in substance from the like qualification on the power in Tanton. In our judgment, the tribunal were entitled to regard clause 3 as falling on the Tanton side of the dividing line.
- It follows, in our view, that the tribunal were correct to find that the effect of clause 3 was that there was no obligation on Mr Green to provide his clause 2 services personally: he could delegate all of them to a competent substitute, and indeed could (in theory) profit from such delegation if he engaged the substitute at fees lower than the Council was paying him. If the clause 2 duties were the only duties imposed on Mr Green by the agreement, then clause 3 would, in our view, make the case indistinguishable in all material respects from Tanton. We should perhaps add that we do not regard the clause 2(a) duty as one which was, in practice, obviously delegable, since it is directed not so much at imposing specific active duties on Mr Green as at making him personally accountable generally to the Rector for the church's music. But we do not regard this as making any material difference. The effect of clause 2(a) may well be that the buck stops with Mr Green: but it does not follow from that that he has to provide any services personally such as to make him either an employee under a contract of service or a worker.
- The case is, however, complicated by the existence of clauses 7 and 17. As regards clause 7, the tribunal's view was that clauses 2(a) and (b) – which respectively imposed responsibility in respect of "the music team" and to direct "the choir" - were intended to include the responsibilities in respect of "the choir", being responsibilities which, as the tribunal put it, "for drafting convenience rather than anything else, are set out further down the document." The tribunal therefore held that a sensible reading of clause 2(a) and (b) required the power of delegation in clause 3 to be regarded as extending also to the clause 7 duties.
- We were for some time attracted by that approach, but have concluded that it involves a misinterpretation of the agreement. First, as we have indicated, we regard clause 2(a) as concerned not so much with the positive performance of musical activities (of which choir training is an example) as with the imposition upon Mr Green of personal accountability to the Rector for such activities generally. Second, we are not satisfied that the reference in clause 2(a) to "the music team" is a reference to, or includes, "the choir", there being no evidence as to what "the music team" in fact comprised. In this connection, it is to be noted that the agreement has no difficulty in making express references to the choir when it wants to (as in clause 2(b)). Third, we cannot identify anything elsewhere in clause 2 which might be regarded as imposing a duty upon Mr Green which clause 7 can be regarded as elaborating. Clause 2(b) refers to the direction of the choir at ordinary weekly services, but says nothing about their prior training. Clause 2(f) refers to the devotion of adequate time to "the preparation and planning of music" but, again, we do not regard that as encompassing the training of the choir.
- In our view, therefore, the clause 7 duties are probably better viewed as freestanding obligations, which cannot properly be regarded simply as an elaboration of the clause 2 duties. It follows that we consider that clause 3 does not empower a delegation of the clause 7 duties and that Mr Green was personally responsible for (i) recruiting choir members (subject to Rector's approval), and (ii) training the choir.
- As regards clause 17, the tribunal made no reference to it, although it featured in the argument before us. We regard it as less than clear whether, as a matter of construction, the clause 17 organ-playing duty was also delegable, a point on which we did not receive comprehensive argument, but we have (with some hesitation) come to the conclusion that it was. The clause 17 services appear to us to be in the nature of "special services" within the meaning of clause 2(d) and clause 3 makes it clear that organ-playing at such services is delegable to others. The general power of delegation is again repeated in clause 9, which confers the right upon Mr Green to play the organ "at all services at the Church whenever music is requested" whilst also empowering him to "permit some other competent person to play at any such service but in that event [he] shall be entitled to receive the fee as specified in clause 4 above." Against this it can, however, be said (i) that clause 17 is imposing a separate personal obligation upon Mr Green, and that if performance at clause 17 services were covered by clause 2(d), there would be no need for clause 17 to open with the words that it does; and (ii) that the latter part of clause 9 may not be referring to organ-playing at clause 17 services at all, because the "fee" referred to in clause 9 can sensibly only be such a fee as is referred to in clauses 4(ii), (iii) and (iv), whereas Mr Green's reward for his clause 17 activities is the honorarium of £1,020 provided for by clause 4(i) and it is improbable that clause 9 is directed at confirming that he is entitled to retain the whole of his honorarium even if someone else plays the organ at clause 17 services.
49. There are, therefore, arguments both ways. A striking feature of the agreement as a whole is, however, its emphasis (to be found in both clauses 3 and 9) of Mr Green's right to delegate his duties (including organ-playing duties) to others; and we can find insufficient support in the drafting of this somewhat ill-drawn document for a conclusion that, by way of exception, the clause 17 organ-playing duties were intended to be non-delegable. Had this been the intention, we regard it as likely that the agreement would have gone to the trouble to make it absolutely clear.
- It follows from our analysis of the agreement that (at least in theory) we consider that all Mr Green's clause 2 duties and responsibilities were delegable, but that his clauses 7 duties were not. As to our parenthetical qualification, we have indicated that we do not find it easy to see how in practice the clause 2(a) responsibility could be delegated to a substitute, although in principle we cannot see any fundamental difficulties with regard to the delegation of the remaining clause 2 duties. As regards clause 7, the performance of that duty was ancillary to the performance of his primary clause 2 duties and strictly speaking Mr Green was not even being rewarded for that ancillary duty: see clause 1(b). Moreover, all aspects of choir training – how and (more importantly) how often – were exclusively matters for Mr Green, in respect of which the Council could express little or no voice or, therefore, control. If we are wrong in our conclusion as to the clause 17 duties, these were, we assume, in the nature of essentially one-off, occasional, duties: and there is no evidence that there was any guarantee that there would in fact be any such services at all during the currency of the agreement. We have seen no evidence as to how many such services were predicted to take place, or did take place, during 2003.
- The tribunal's view was that even if (as we have held) they were wrong in their view of clause 7, the power of delegation anyway extended to "a very substantial part of the post-holder's duties [and was] incompatible with the existence of a contract of service or a 'worker' contract." They held, therefore, that there was no such contract.
- In our judgment, they were entitled to come to the view that there was no contract of service between the Council and Mr Green; and Mr Wynne failed to persuade us that their conclusion involved any error of law. The clause 7 duties were ancillary to the clause 2 duties and it was entirely a matter for Mr Green as to how and how often he rehearsed the choir. The dominant purpose of the agreement was not, however, the training of the choir, it was the provision by Mr Green to the Council of the clause 2 services, all of which were expressly delegable to others. Such a right of delegation was incompatible with the existence of a contract of service between the Council and Mr Green; and in our view the tribunal's conclusion that there was no such contract was in no manner vitiated by the minor respects (under clause 7) in which personal performance by Mr Green was required. And, if we are wrong in our conclusion as to the power to delegate the clause 17 duties, for reasons given in the final two sentences of paragraph 50 we similarly do not consider that this very minor aspect of Mr Green's personal obligations can serve to vitiate the tribunal's conclusions either.
- As to whether Mr Green was a "worker" within the meaning of section 230(3), the tribunal also answered this in the negative. On a literal reading of section 230(3), it might perhaps be thought that the personal obligation upon Mr Green to perform the clause 7 (and, if we are wrong, the clause 17) duties amounted to an obligation upon him "to do or perform personally any work or services for" the Council within the meaning of that subsection. In this connection, we were, however, referred to the decisions of the Court of Appeal in Mirror Group Newspapers Ltd v. Gunning [1986] IRLR 27 and Loughran v. Northern Ireland Housing Executive [1998] IRLR 593. The Mirror case concerned the definition of "employment" in section 82(1) of the Sex Discrimination Act 1975, a definition embracing employment under "a contract personally to execute any work or labour", words bearing an obvious similarity to those in section 230(3). The effect of the decision in the Mirror case is that the fact that a contract imposes at least some obligation of personal performance will not by itself make it a contract of "employment" within the relevant definition: it will only be such a contract if the dominant purpose of the contract is the execution of personal work or labour (see paragraphs 10 and 13 in the judgment of Oliver LJ and paragraph 36 in that of Balcombe LJ). In Loughran the House of Lords appear to have approved that approach (see paragraph 13 of Lord Slynn of Hadley's speech, paragraph 53 of Lord Lloyd of Berwick's speech, paragraph 65 of Lord Steyn's speech and paragraph 70 of Lord Clyde's speech).
- In the present case, the tribunal's approach was that the overall substance of this agreement was that Mr Green was agreeing to provide the Council with his musical expertise and skill but that in virtually all material respects he was entitled to perform his obligations by competent substitutes. They rightly acknowledged that, in practice, he would be unlikely to exercise his power of delegation to any major extent: but the fact remains that he had the right and power to do so. For reasons given, we regard the clause 7 (and, if relevant, the clause 17) duties as so minor as not by themselves sufficient to bring the contract within section 230(3): it was not the dominant purpose of this contract that Mr Green should personally perform those particular duties. The dominant purpose of the contract was the procurement by Mr Green, either by himself or by others, of the clause 2 services. Since he was not contractually required to perform those services personally, we consider that the tribunal were entitled to conclude that he was not a "worker" within the meaning of section 230(3).
- The result is that we dismiss the appeal.