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You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Community Dental Centres Ltd v. Sultan- Darmon [2010] UKEAT 0532_09_1208 (12 August 2010)
URL: http://www.bailii.org/uk/cases/UKEAT/2010/0532_09_1208.html
Cite as: [2010] IRLR 1024, [2010] IRLT 1024, [2010] UKEAT 0532_09_1208

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BAILII case number: [2010] UKEAT 0532_09_1208
Appeal No. UKEAT/0532/09

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
             At the Tribunal
             On 2 July 2010
             Judgment delivered on 12 August 2010

Before

THE HONOURABLE MR JUSTICE SILBER

MS J L P DRAKE CBE

MR T HAYWOOD



COMMUNITY DENTAL CENTRES LTD APPELLANT

DR G SULTAN-DARMON RESPONDENT


Transcript of Proceedings

JUDGMENT

© Copyright 2010


    APPEARANCES

     

    For the Appellant MR ANDREW STAFFORD QC
    (One of Her Majesty's Counsel)
    Instructed by:
    Outset UK Limited
    Outset House
    Turkey Mill
    Ashford Road
    Maidstone
    Kent
    ME14 5PP
    For the Respondent MRS RENATA DARMON-SULTAN
    (Representative)


     

    SUMMARY

    UNLAWFUL DEDUCTION FROM WAGES

    The Claimant (who was a dentist) entered into a contract to provide dental services for the Respondent. The Employment Tribunal found that he was not an "employee" within the meaning of section 230(3) of the Employment Rights Act 1996 but that he was a "worker" within the meaning of that provision. The Respondent appeals.

    Held (allowing the appeal):-

    The Claimant was not a "worker" as he did not "undertake to do or perform personally any work or services" as required by section 230(3) because there was no obligation on the Claimant to do work as he could delegate his duties.

    Dicta in Byrne Brothers (Formwork) Limited v Baird and Others [2002] IRLR 96[25]; James v Redcats (Brands) Limited [2007] IRLR 296[78]; Express and Echo Publications Limited v Tanton [1999] IRLR 367[31]; Jorzca v Premier Groundworks [2009] All ER (D) 22 [25] and Archer-Hoblin Contractors v MacGettigal [2009] UKEAT/0037/09/0307 [43] applied.

    Dicta in Redrow Homes (Yorkshire) Limited v Buckborough [2009] IRLR 34[56] not followed.


     

    THE HONOURABLE MR JUSTICE SILBER

  1. Community Dental Centres Ltd ("the Respondent") appeal against a decision of Employment Judge Toomer dated 15 June 2009 by which he held that:
  2. a. Georges Sultan-Darmon ("the Claimant") was in relation to the Respondent a "worker" within the meaning of the Employment Rights Act 1996 ("the Act")and that he was therefore entitled to pursue a claim for wages or unlawful deductions; and that;
    b. The Claimant was not an "employee" as defined in the Act of the Respondent.

  3. The respondent appeals against finding (a) while the claimant does not cross-appeal against finding (b).
  4. The issue for the Employment Judge as it is for this Appeal Tribunal is whether the Claimant's role with the Respondent fell within the definition of a "worker" as defined in section 230(3) of the Act which defines a "worker" as:-
  5. "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 expressed or implied and (if it is expressed) whether orally or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract who's status is not by virtue of a contract that of a client or customer of any profession or business undertaking carried on by the individual".

  6. The case for the Respondent is that the Tribunal had no jurisdiction to hear the claim because the Claimant was not at any time engaged under a contract of employment or contracted to do or perform personally any work or services with the result that he was not a "worker" within the definition. The case for the Respondent was that the Claimant was at all times a self-employed sub-contractor who did not come within the statutory definition. The Claimant contends that he was a "worker".
  7. The decision of the Employment Tribunal

  8. The Employment Judge found that:-
  9. (a) The Respondent had for some years been contracted to provide dental services to a Primary Care Trust in Devon at practice premises in Northam;
    (b) The Claimant first entered into a contractual relationship with the Respondent in 2002 when the Respondent was owned by another company but after transfers, the Respondent company retained its own independent legal identity and the Claimant's contractual relationships have always been with the Respondent and no other company;
    (c) The Respondent had a contractual relationships with the PCT to supply dental services and for that purpose, dental surgeons were engaged;
    (d) The contract into which the Claimant entered was described as "licence agreement and contract for service" and it specifically stated that the Claimant's status was "a self-employed independent contractor dentist with full clinical freedom and accepting full clinical responsibility";
    (e) The contractual provision for payment stated "[the claimant] will be self-employed; [the respondent] can if required introduce [the claimant] to an Accountant who specialise in dentists' financial affairs";
    (f) In an annex to the licence agreement, it was provided that nothing in the agreement should constitute a partnership between the Claimant and the Respondent and that each party should be seen, as far as possible, as an independent contractor;
    (g) Under the terms of the agreement, the Claimant was obliged to be registered with the General Dental Council and to hold appropriate risk insurance. The Employment Tribunal found that it was the intention that the Claimant would be directly responsible to the appropriate professional and regulatory bodies for his own professional conduct as a dentist;
    (h) The evidence of the Claimant was that he always had complete clinical independence and that he had sole authority to decide in consultation with his patient upon the nature and extent of any treatment which the patient should receive. Thus the Respondent could not dictate to the Claimant what he had to do or how to do it although the Claimant was subject to a clinical audit by a dental practitioner engaged by the Respondent for that purpose;
    (i) The Respondent took responsibility for the provision of day-to-day dental services; and it supplied the premises, the basic equipment and the support staff (such as receptionists and dental nurses) leaving the Claimant only to provide his own work wear and such additional small tools as he might in his discretion require;
    (j) Although the Respondent introduced the patients to the Claimant, the contract gave the Claimant fairly extensive rights to decline to treat any individual but it defined the hours of which the Claimant was required to provide dental services under the National Health Service Scheme. The contract also limited the amount of time which the Claimant could take off and it required him to participate in an emergency on-call roster;
    (k) The Claimant was paid initially on the basis of work actually done although there was a small capitalisation allowance depending on the number of patients registered to him which remained more or less constant. He was paid gross and he was expected to pay his own tax and national insurance which he did whilst making modest claims for items such as work wear and professional expenses, which were set off against his tax liability. He did not receive holiday pay and nor did he receive money to compensate for work which he would have done when he was away on holiday and he also received no sickness pay although he could benefit under a Government Scheme which provided payment to sick dentists;
    (l) The Claimant was entitled to undertake private work using the Respondent's premises with the fees being shared equally with the Respondent. The Claimant had to meet some of the costs of the laboratory work generated as a result of the treatment of patients while the liability for bad debts was split equally between the Claimant and the Respondent. The Claimant was also obliged under the contract to indemnify the Respondent for costs incurred by his negligent use of equipment as well as in respect of any acts or omissions committed by the Respondent staff while working under the Claimant's supervision;
    (m) The contract contained a provision under the heading Absence which stated that "In the event of your failure (through ill health, maternity leave or other causes excluding up to 30 days' annual holiday allowance) to utilise the facilities for a continuous period of more than 5 days you shall make arrangements for the use of the facilities by a locum tenens acceptable to [the respondent] and in the event of your failure to make such arrangements [the respondent] shall have authority to appoint a locum tenens if possible to act on your behalf who should be your servant or agent and shall be paid by you";
    (n) The Employment Judge was satisfied the Claimant did not avail himself of that provision although other dentists engaged on similar terms had on occasions engaged a locum to act for them and in particular dentists who took maternity leave;
    (o) There were changes over the years to the basis and method of remuneration with the dentists being paid a set numeration per month and a further change was made when all dental work was broken down into what were described as different units of dental activity with the Claimant together with other dentists similarly engaged being given targets of the number of units to be attained per month. Failure to reach the required number of units would lead to a reduction in the amount paid to the Claimant while if the Claimant undertook more units than the target he would be paid an additional sum;
    (p) There was then a fresh form of contract offered to the Claimant in 2004 which he declined to sign. It was common ground at the hearing in front of this Appeal Tribunal that neither party was bound by any agreement from the 2004 draft and so nothing more needs to be said about it.
    (q) The agreement came to an end in January 2009 and the present claim was then brought.
  10. The Employment Judge then considered the authorities as to whether the Claimant was an "employee" and he was not satisfied on the balance of probabilities that the Claimant was an employee because:-
  11. a. "I was not satisfied that there was in fact a sufficient mutuality of obligation here. The respondent undertook to introduce patients to the claimant but there was no guarantee that any particular number of patients would be introduced or even the claimant would necessarily get his fair share as compared with other dentists engaged in other same terms and conditions. Furthermore there was no obligation upon the claimant – at least under the terms and conditions of the contract which he regarded as binding upon him – to treat any patient who he decided he did not wish to treat. Although as a matter of commercial common sense it was in the interest of the respondent to introduce patients to the claimant and it was in the interests of the claimant to treat those patients, there was no legal obligation on either side which was sufficiently clearly enforceable to amount to a mutuality of obligation" [17];
    b. "Secondly I was not persuaded that the control which the respondent undoubtedly exercised over the claimant's environment necessarily amounted to the degree of control which effectively created the position of master and servant…it did not purport to control the claimant in the exercise of his professional discretion. To put it bluntly, it did not tell the claimant that he had to fill one tooth, draw another, or engage in or desist from any particular treatment. I do not regard the process of clinical audit as that sort of conduct; I took the view that it simply amounted to monitoring by the respondent of the claimant's performance to ensure that it was maintaining its own contractual obligations to provide a competent dental service to members of the public"[18];
    c. "Moreover, it seemed to me there were a number of other areas which show the relationship between the parties was inconsistent with there being a contract of service" [19] . Those areas included the facts that as (i) an employee is not required to provide his own professional indemnity insurance but is covered by the public liability insurance policy held by his employer; (ii) "an employee is not, in my experience, required to indemnify his employer in respect of damage done by him to his employer's equipment or in respect of the negligent actions of employees of the employer acting under his supervision" (iii) these were matters which would normally be dealt with under the Respondent's internal disciplinary procedure but it was clear that they never applied to the Claimant; (iv) the Claimant did stand a financial risk in the course of his contract if he failed to complete the number of units; and (v) he bought equal responsibility with the Respondent for bad debts. Those factors were "wholly inconsistent with the claimant working under a contract of employment"[19]; and
    d. The original contract expressly excluded the idea of employment and there were other significant but determinative factors such as the Claimant enjoying self-employed status.

  12. Those findings are not in dispute but what is in dispute is the subsequent finding of the Employment Judge that the Claimant was a "worker" and this is the central point in the Respondent's appeal. The findings of the Employment Judge on this issue were that:-
  13. a. He was satisfied under the terms of the contract a locum could be supplied and occasionally was supplied but not by the Claimant. He did not conclude that the contractual provision relating to the appointment of a locum to do the dentist work for him and at his expense "was in any way a sham";
    b. The obligation on a worker in section 230 of the Act is to do or perform personally any work but in this case the Claimant was obliged to provide the services of a dental surgeon either by turning up to work himself or by supplying a locum with the right of the Respondent to appoint a locum if the Claimant failed to supply the locum and that locum selected by the Respondent would be regarded as the Claimant's servant or agent and for whose remuneration the Claimant would be solely responsible;
    c. "In other words, therefore, the claimant had by provision of work or services, personally to ensure the dental work he contracted to carry out was achieved" [24];
    d. Although the Claimant was a self-employed sub-contractor he "had nonetheless entered into a contract whereby he undertook to do or to perform personally work or services for the respondent"; and that
    e. He therefore came to the conclusion "that it was more likely than not" that the Claimant had met the statutory definition of a "worker".

    The submissions

  14. Mr Andrew Stafford QC counsel for the Respondent contends that to be a "worker" within the statutory meaning in section 230(3) of the Act, three conditions have to be satisfied which are (a) there has to be a contract between the parties; (b) this contract has to be one in which an individual undertakes to do or perform work personally for another and (c) that other must not be (by virtue of a contract) a client or customer of a profession or business carried on by the individual. There is no dispute as to requirement (a), because there was a contract between the Claimant and the Respondent which was the 2002 agreement but Mr Stafford contends that requirement (b) has not been satisfied because the Claimant did not undertake to do or perform work personally for the Respondent. The Claimant's advocate, who is his wife, disputes this and contends that the Employment Judge was right.
  15. Mr Stafford's first submission was that in light of the finding by the Employment Judge that there was no mutuality of obligations when considering whether the Claimant was an "employee", this finding was also determinative in showing that the Claimant was not a "worker". He contends that mutuality of obligation is as fundamental to the determination of the status of a "worker" under the second limb of section 230(3) of the Act as it is to the determination of an "employee" under the same provisions.
  16. Mr Stafford relies in support on this approach of Mr Recorder Underhill QC when considering an identical provision to that in section 230(3) of the Act but which was contained in regulation 2(1) of the Working Time Regulations 1998 in Byrne Brothers (Formwork) Ltd v Baird and Others [2002] IRLR 96. He said at paragraph 25 that:-
  17. "We accept that mutuality of obligation is a necessary element in a 'limb (b) contract' as well as in a contract of employment. The basis of the requirement of mutuality is not peculiar to contracts of employment: it arises as part of the general law of contract."

  18. The same proposition was explained by Mr Justice Elias (as he then was) in James v Redcats (Brands) Limited [2007] IRLR 296 at paragraph 78 when he said (with my emphasis added) that:-
  19. "As the EAT observed recently in the case of James v Greenwich Council [2007] IRLR 168 paragraph 54, typically the focus on mutuality of obligations arises in circumstances where a worker is employed intermittently by an employer and the question arises whether there is a contractual relationship in the period when the worker is not actually working. This is important for establishing continuity of employment (although sometime s.212 of the Employment Rights Act 1996 will assist in that regard). The only obligations which in practice are likely to arise are some duty on the employer to offer work and some duty on the worker to accept work if offered. If there are no mutual obligations of any kind, there can be no contract. That is a simple principle of contract law, not unique to contracts of employment."

  20. In the present case, the Employment Judge concluded that there was no mutuality of obligations when deciding that the Claimant was not an "employee" when he explained that (with my emphasis added):-
  21. "9… [The Respondent] introduced the patients to him, although the 2002 contract gave him a fairly extensive right to decline to treat any individual; and it identified the hours within which the claimant was required to provide dental services under the National Health Scheme. The contract limited the amount of time over the course of the year which the claimant could take off and required him to participate in an emergency on-call roster.
    17… Firstly, I was not satisfied that there was in fact a sufficient mutuality of obligation here. The respondent undertook to introduce patients to the claimant but there was no guarantee that any particular number of patients would be introduced or even that the claimant would necessarily get his fair share, as compared with other dentists engaged upon the same terms and conditions within the same practice, of such patients as did approach the practice for treatment. …Furthermore there was no obligation upon the claimant – at least under the terms and conditions of the contract which he regarded as binding upon him – to treat any patient whom he decided he did not wish to treat. Although as a matter of commercial common sense it was in the interests of the respondent to introduce patients to the claimant and it was in the interests of the claimant to treat those patients, there was no legal obligation on either side which was sufficiently clearly enforceable to amount to a mutuality of obligation" (emphasis added).

  22. Surprisingly the Employment Judge did not rely on the conclusions when later deciding if the Claimant was a "worker" but instead, when dealing with the issue of worker-status, the Employment Judge found that the Claimant had entered into a contract whereby he undertook to do or perform personally work or services for the Respondent. I agree with Mr Stafford that there is an obvious inconsistency between these two conclusions because either the first (but unchallenged) conclusion that the Claimant was an "employee" is wrong or the second conclusion that he was not a "worker" is wrong.
  23. The crucial point is that the Employment Judge cannot simultaneously conclude in different parts of their decision first that there was and second that there was not an obligation to perform services personally. We are therefore driven to the conclusion that the failure of the Employment Tribunal to take into account these earlier findings (which are not disputed on this appeal) concerning the obligations entered into by the Claimant amounts to an error of law.
  24. We stress that the absence of mutual obligation is not merely a question of consistency within the judgment because under his contract with the Respondent the Claimant was plainly entitled to decide for himself whether to turn up and to provide dental services. It is noteworthy that the Claimant's right not to do so did not depend solely upon whether he was unable to do this but it also depended on whether he was willing to provide those services. In other words, the Claimant had a discretion whether to attend at the Respondent's premises. Nothing has been said on the Claimant's behalf to undermine this submission.
  25. So it follows that the absence of any legal obligation on the Claimant which was sufficiently clearly enforceable to amount to a mutuality of obligation, the Claimant by virtue of the 2002 agreement was not a "worker" under the second limb of section 230(3). In other words the 2002 agreement did not entail an undertaking on the part of the Claimant "to do any work or perform personally any work or service" and so the appeal must be allowed.
  26. I will therefore deal more briefly with the second ground of Mr Stafford which is that the Employment Judge erred in relying on the case of Redrow Homes (Yorkshire) Ltd v Buckborough [2009] IRLR 34 where it was stated that the requirement to perform services should embrace a wider concept than the requirement to provide labour with the result that an obligation to provide the labour of others amounted an obligation to perform services. Mr Stafford contends that the true test is whether the power to substitute an alternative for him was limited to the case of inability only or whether it was an unfettered power because in the latter case, such a provision would be inconsistent with the person concerned being a "worker". He submits that in this case the substitution power was exercisable in circumstances far greater than just on grounds of inability. He relies on the wording of clause 17 which states under the heading "Absence" (with my emphasis added):-
  27. "In the event of your failure (through ill-health, maternity or other cause excluding up to 30 days annual holiday absence" to utilise the facilities for a continuous period of more than 5 days you shall make arrangements for the use of the facilities by a locum tenes acceptable to [the respondent] and in the event of your failure to make such arrangements [the respondents] shall have authority to appoint a locum tenes if possible to act on your behalf who shall be your servant or agent and shall be paid by you".

  28. Mr Stafford also points out that the termination provisions in clause 18.2 of the agreement are triggered not merely by giving notice or by not attending at the Respondent's premises but also because of the right of either party to determine the agreement if the other party becomes disqualified from practice, becomes bankrupt or becomes guilty "of any conduct likely to injure the other party in his profession". He proceeds to contend that merely delegating powers to a locum would not be regarded as a factor justifying termination. Thus, he says the Claimant was a worker.
  29. The Claimant's wife, who acted on his behalf and who presented his case with commendable skill and clarity, strongly disputes this and contends that the authorities support the decision of the Employment Judge and so are fatal to the Respondent's submissions.
  30. The Employment Judge dealt with the submissions of the Claimant's wife in paragraphs 22-24 of his decision in this way:-
  31. "22. The respondent's wife, in her final submissions, maintained firmly that it was not possible to provide a locum and that that would not have been permitted, but there was no evidence whatsoever to that effect and persuasive evidence from the respondent's witnesses to the contrary. I was satisfied on the evidence that under the terms of the contract a locum could be supplied, and on occasions was supplied, although not, as I found, by the claimant. Is this, then, fatal to the claimant's argument that he was at least a worker if not an employee?
    23. On the one hand, it follows from what I have said already that I did not conclude that the contractual provision relating to the appointment of a locum to do the dentist's work for him and at his expense was in any way a sham, and in this context I reminded myself of the conclusions in the recent case of Redrow Homes (Yorkshire) Ltd v Buckborough [2009] IRLR 34 which the respondent's representative helpfully supplied. That authority, however, considered not only the circumstances in which one might or might not conclude that the "personal services" provision in a contract amounted to a sham; it also went on to consider more generally the question of the nature and extent of the obligation to perform services personally. In that case, which involved bricklayers and a claim for holiday pay, the relevant clause was this:
    "For the avoidance of doubt the obligation to perform the work is not personal to the contractor and their obligations may be performed by other labour. Further the contractor is required to provide other labour if it is necessary to carry out the works or to maintain the rate of progress stipulated by the company."
    Although the Employment Appeal Tribunal took the view that on that form of words the obligation to provide other labour to Redrow could not be described as an undertaking personally to do or perform work, it went on to conclude that the alternative requirement: to perform services, should embrace a wider concept than that of work and concluded that the obligation upon the claimants to provide labour was justifiably and correctly described as an obligation personally to perform a service for Redrow, thereby relieving Redrow in the absence of a contractor from having to find other labour, or having to find other labour if a contractor was not able to maintain the required rate of progress.
    24. The obligation on a worker under the definition in s.230 is to undertake to do or perform personally any work or services for another party to the contract. Under the contract which subsisted between the claimant and the respondent in this case, the claimant was obliged to provide the services of a dental surgeon either by turning up to work himself, or by supplying a locum if he were to be absent for a period in excess of 5 days (subject to the exclusion in respect of holiday). Moreover, if he failed to supply that locum then the respondent would take it upon itself to appoint such a locum who would, as a matter of contract, be regarded as the claimant's servant or agent and whose remuneration would be at his sole charge. In other words, therefore, the claimant had, by provision of work or services, personally to ensure that the dental work he had contracted to carry out was achieved."

  32. Mr Stafford contends that Judge Burke's statement which we have just quoted is an inaccurate statement of the law. The starting point, he says, is the Court of Appeal decision in Express and Echo Publications Limited v Tanton [1999] IRLR 367 which concerned a contractual provision stating that:-
  33. "In the event that the contractor is unable or unwilling to perform the services personally he should arrange at his own expense entirely for another suitable person to perform the services".

  34. There was also a provision that if the contractor provided a relief driver the contractor had to satisfy the company that such relief driver was trained and suitable to undertake services.
  35. Peter Gibson LJ (with whose judgment Auld and Hirst LJJ agreed) stated that:-
  36. "31. In these circumstances, it is, in my judgment, established on the authorities that where, as here, a person who works for another is not required to perform his services personally, then as a matter of law the relationship between the worker and the person for whom he works is not that of employee and employer. [The claimant] has submitted to us that though the personal services to the [contracting party] was a material consideration, it was not conclusive. I am afraid that that proposition cannot stand in the light of the authorities."

  37. Subsequently in Redrow Homes (Yorkshire) v Buckborough [2009] IRLR 34, Judge Burke QC considered in the judgment of this Appeal Tribunal in which the issue was whether a bricklayer was a "worker" where the contractual obligation on the bricklayer "to perform the work is not personal to the [brick layer] and their obligations may be performed by other labour".
  38. The Employment Tribunal held (a) that this clause was a "sham" as it did not reflect the parties true relationship; and (b) even if that was wrong and the contractual provisions were not a sham, this clause created an obligation of personal service which was sufficient to bring the claimant within the statutory definition of a "worker". On appeal to this Appeal Tribunal it was held that the Employment Tribunal was entitled to reach those conclusions. The claimants in this case rely on the statement of Judge Burke at paragraph 56 where he says that:-
  39. "Surprisingly there is, we were told, no authority which addresses the difference between "work" and "services" in the definition of "worker" in Regulation 2(1). We take the view that the obligation to provide other labour to Redrow could not, on any ordinary understanding of those words, be described as an undertaking personally to do or to perform work; but Parliament must be taken to have intended by the relevant words of Regulation 2(1) that the alternative – to perform services –should embrace a wider concept than that of work; and in our judgment the obligation on the Claimants to provide labour, while not an obligation personally to perform work, was justifiably and correctly described by the Tribunal as an obligation personally to perform a service for Redrow, relieving Redrow in the absence of a Claimant from having to find other labour or to find other labour if a Claimant was not able to maintain the required rate of progress".

  40. It will be seen that there was a contradiction here between what had been said by the Court of Appeal in Tanton and what was said by this Tribunal in Redrow.
  41. In the case of Jorzsa v Premier Groundworks [2009] All ER (D) 22 I said when giving the judgment of this Appeal Tribunal first that the comments in Redrow were obiter as the crucial decision was that the contractual provision was a sham, second that in any event the judgment in Tanton was binding on this Appeal Tribunal and third that in so far as there was a dispute Tanton had to be followed.
  42. The conclusion in Premier Groundworks was stated at paragraph 25 in this way:-
  43. "In conclusion, we consider that where a party has an unfettered right for any reason not to personally perform the contractual obligations under a contract but can delegate them to someone else, he cannot be a "worker" within the meaning of the WTR even though the person actually performing the contractual obligations has to meet certain conditions. The position would be different if the right not to perform the contractual obligation depended on some other event such as where that party was "unable" to perform his or her obligation (see MacFarlane and James (supra)."

  44. A similar conclusion was reached more recently in the case of Archer-Hoblin Contractors Ltd v MacGettigal [2009] UKEAT/0037/09/0307 in which the substitution clause stated that the person providing the services will:-
  45. "have the right to send someone with similar experience and qualifications in your place. You will be paid for the work they do and you must then arrange to pay the substitute yourself. You must notify the [person for whom the work was to be done] of the substitute for security and Health and Safety purposes."

  46. Slade J sitting in this Appeal Tribunal explained that the observations in Redrow to the effect of the obligation to provide a substitute satisfied the requirement personally was obiter because the case was actually decided on the basis of the holding that the contracts were a sham. She also stated that:-
  47. "43. In my judgment on a proper construction of the substitution clause, [the contractor] was given an unfettered right to delegate the performance of his duties. As a matter of law such a right is inconsistent with an obligation to perform personally any work or services within the meaning of the Working Time Regulations 1998."

  48. In the recent case of Yorkshire Window Company Limited v Parkes (27 May 2010 – UKEAT/0484/09/SH) Judge Serota QC giving the judgment of this Appeal Tribunal reviewed the authorities and he held that:-
  49. "the right or obligation to employ a substitute will not necessarily mean that there is no obligation on the part of the 'contractor' to perform personal services unless that right to employ a substitute is unfettered" [77(c)].

  50. That conclusion supports our view that the unfettered right given to the Claimant to appoint a substitute without any sanction at will means that he cannot be a "worker".
  51. None of the cases relied on by the Claimant's wife in her clear written and oral submissions whether considered individually or cumulatively undermine the conclusions in cases such as Tanton, Premier Groundworks, Archer-Hoblin and Yorkshire Windows that an unfettered right of a contractor to send a substitute to do his or her work shows that the contractor is neither a "worker" or an "employee". The cases relied on by the Claimant in his skeleton on 2 July 2010 do not deal with the critically significant cases of Tanton, Premier Groundworks or Archer-Hoblin, which after all are totally consistent with the statutory definition which requires the contractor to undertake "to do or perform personally any work or services for another party to a contract". The Claimant's authorities do not deal with that issue.
  52. At the end of the hearing, the Claimant's wife handed in a bundle of documents which did not deal with the relationship between the Claimant and the Respondent but the different relationship between the Claimant and the Health Authority. Even if those documents were admissible at this late stage (which we doubt), they are not relevant to the issue on the appeal.
  53. The Claimant can be comforted with the fact that nothing more could have been said to assist his case. Notwithstanding the clear and courteous submissions of the Claimant's wife, the appeal has to be allowed. A declaration should be made that "the Claimant was not a 'worker' within the meaning of section 230(3) of the Employment Rights Act 1996".


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