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You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Pulse Healthcare v Carewatch Care Services Ltd & Ors (Rev 2) (Contract of Employment : Whether established) [2012] UKEAT 0123_12_0608 (6 August 2012) URL: http://www.bailii.org/uk/cases/UKEAT/2012/0123_12_0608.html Cite as: [2012] UKEAT 0123_12_2007, [2012] UKEAT 0123_12_0608, [2012] UKEAT 123_12_608 |
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EMPLOYMENT APPEAL TRIBUNAL
FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON, EC4Y 8JX
At the Tribunal
Judgment handed down on 6 August 2012
Before
HIS HONOUR JUDGE DAVID RICHARDSON
(SITTING ALONE)
PULSE HEALTHCARE LTD APPELLANT
CAREWATCH CARE SERVICES LTD & 6 OTHERS RESPONDENTS
Transcript of Proceedings
JUDGMENT
AMENDED
APPEARANCES
(of Counsel) Instructed by: Longmores Solicitors 24 Castle Street Hertford SG14 1HP |
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For the remaining Respondents |
(of Counsel) Instructed by: Lyons Davison Westbury House 701-705 Warwick Road Solihull B91 3DA
No appearance or representation by or on behalf of the remaining Respondents
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SUMMARY
CONTRACT OF EMPLOYMENT – Whether established
The Employment Judge correctly found that each of the Claimants was employed under a contract of employment which was global in nature. This being so, he also correctly found that each of the Claimants had the requisite continuity of employment.
HIS HONOUR JUDGE DAVID RICHARDSON
1. This is an appeal by Carewatch Care Services Limited (“Carewatch”) and Pulse Healthcare Limited (“Pulse”) against a judgment of the Employment Tribunal sitting in Newcastle (Employment Judge Shepherd sitting alone) dated 29 July 2011. The Employment Judge found that five individual Claimants – Mrs Short, Ms Tweedy, Ms James, Ms Slone and Ms Kelly (“the Claimants”) were employees of Carewatch within the meaning of section 230 of the Employment Rights Act 1996.
2. Underlying that judgment is a dispute between Carewatch and Pulse as to whether the employment of the Claimants transferred from Carewatch to Pulse in December 2010 by virtue of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”).
3. The local primary care trust (“the PCT”) supported a 24 hour critical care package for a lady called VF who had severe physical disabilities. Until 1 December 2010 there was a contract between Carewatch and the PCT for provision of that package. The PCT terminated that contract and with effect from 2 December 2010 entered into a contract with Pulse to provide the package. The Claimants’ case, until recently largely supported by Carewatch, is that they were employed by Carewatch in providing VF’s package; and that their employment transferred to Pulse pursuant to TUPE.
4. Pulse took issue with the Claimants’ case on three grounds. (1) The Claimants were not employees of Carewatch, since there was no mutuality of obligation; (2) Alternatively, the Claimants did not have sufficient continuity of employment to claim unfair dismissal. (3) Even if they were employees, their employment did not transfer to Pulse under TUPE.
The background facts
12. Under the heading “Place of Work”, clause 3 provided:
“Carewatch is responsible for providing services at various locations for varying periods of time. Accordingly you will have no fixed place of work and will be expected to perform duties at any location that is within reasonable travelling distance of your home.”
14. Under the heading “Hours of Work” clause 6 provided:
“Carewatch recognises that Employees must work the hours necessary to fulfil a contract. The Employee will work such hours and at such times as are agreed between him/her and Carewatch. The Employer is not under an obligation to offer the Employee any work and has specifically reserved the right to reduce the Employee’s working hours whenever necessary.”
16. Finally, under the heading “Mutuality of Obligation” clause 8 provided:
“Whilst zero hours contracts need flexibility on both sides, they do not exclude Employees from working for another employer whilst unassigned to Carewatch.”
The Employment Judge’s reasons
“9. Most of the factors point to the claimants in this case being employees under section 230(1). The only issue pursued on behalf of the second respondent is that of a lack of mutuality of obligation. I am satisfied there was sufficient mutuality of obligation for the claimants to be employees. Once the rota was prepared they were required to work and the employer was required to provide that work. They were subject to control and discipline; they had to provide personal services; they were provided with uniforms and equipment; they were paid on a PAYE basis; they had all worked regularly over a number of years and had only taken time off for holidays, sickness and when suspended for which they received payment; it was not established that there were gaps in the continuity of employment. The claimants required regular work and this was provided by the first respondent.
10. I am satisfied that the documents did not reflect the true agreement between the parties and that four essential contractual terms were agreed: (1) that the claimants would perform the services for the first respondent (2) that the claimants would be paid for that work; (3) that the claimants were obliged to carry out the work offered to them and the first respondent undertook to offer work and (4) that the claimants must personally do the work and could not provide a substitute to do so. Those were the true terms of the contract.”
Statutory provisions
23. Section 230(1)-(2) of the Employment Rights Act 1996 provides:
“(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.”
Submissions
24. On behalf of Pulse, Mr Duggan in his submissions carefully and correctly distinguished between two possibilities: (1) a global or “umbrella” contract of employment, by which he meant a contract of employment covering the whole of the work which a Claimant did for Carewatch; and (2) a succession of individual contracts covering individual shifts or individual periods of rostered work.
26. Mr Duggan further submitted that, if there was a succession of individual contracts covering individual shifts or individual periods of rostered work, then there was a real issue as to whether the Claimants had established continuity of service. He took me to schedules which his instructing solicitor had prepared from data provided by Carewatch. He accepted that in general terms the schedules showed that the Claimants had indeed worked regular shifts as they said: but he pointed out that there were apparent breaks in continuity. He submitted that the Employment Judge had not dealt with this point properly: the reasons were not Meek compliant (see Meek v City of Birmingham District Council [1987] IRLR 250.
28. Counsel took me to familiar authorities on the question of mutuality: these included Autoclenz v Belcher [2011] ICR 1157 (Supreme Court); Carmichael v National Power plc [2000] IRLR 43 (House of Lords); Nethermere (St Neots) Ltd v Gardiner [1984] IRLR 240, McMeechan v Secretary of State for Employment [1997] ICR 549, Clark v Oxfordshire Health Authority [1998] IRLR 125 and Cornwall County Council v Prater [2006] IRLR 362 (Court of Appeal).
Discussion and conclusions
35. The Employment Judge was, to my mind, entirely justified in saying that the written contracts – the “Zero Hours Contract Agreement” – did not reflect the true agreement between the parties. His judgment was given shortly before the Supreme Court in Autoclenz v Belcher handed down its decision; but his approach accords with what it laid down. Lord Clarke, giving a judgment with which all members of the Court agreed, approved (see paragraph 29) the approach of Elias J in Consistent Group Ltd v Kalwak [2007] IRLR 560:
“57. The concern to which tribunals must be alive is that armies of lawyers will simply place substitution clauses, or clauses denying any obligation to accept or provide work in employment contracts, as a matter of form, even where such terms do not begin to reflect the real relationship. Peter Gibson LJ was alive to the problem. He said this (p 697):
‘Of course, it is important that the industrial tribunal should be alert in this area of the law to look at the reality of any obligations. If the obligation is a sham, it will want to say so.’
58. In other words, if the reality of the situation is that no-one seriously expects that a worker will seek to provide a substitute, or refuse the work offered, the fact that the contract expressly provides for these unrealistic possibilities will not alter the true nature of the relationship. But if these clauses genuinely reflect what might realistically be expected to occur, the fact that the rights conferred have not in fact been exercised will not render the right meaningless.”
37. It was, of course, only to be expected that counsel – in particular counsel for Pulse – would tax the witnesses with the Zero Hours Contract Agreement. The witnesses were not lawyers; they might well agree, confronted with the words drafted by Carewatch’s lawyers, that they did not have to work. But the Employment Judge was fully entitled to conclude, in accordance with their evidence about agreed hours, that the true contract was otherwise.
39. For these reasons I conclude that the Employment Judge reached the correct decision; and I reject the arguments of Carewatch and Pulse based on a supposed lack of mutuality.