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IN THE
COURT
OF APPEAL (
CIVIL
DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
MR
JUSTICE LANGSTAFF
UKEATPA/0250/
1
B e f o r e :
LADY JUSTICE GLOSTER,
VICE
PRESIDENT OF THE
COURT
OF APPEAL,
CIVIL
DIVISION
LORD JUSTICE ELIAS
- and -
MR
JUSTICE
MOYLAN
____________________
Between:
____________________
James Laddie QC and
Christopher
Milsom
(instructed by Tim Johnson/ Law) for the Appellant
David Reade QC and Nicholas Siddall (instructed by Hill Dickinson) for the Respondent
Thomas Linden QC (instructed by
C
M
Murray
for Public
Concern
at Work) for the Interveners
Hearing date :
21
March
2017
____________________
HTML
VERSION
OF JUDGMENT
____________________
Crown
Copyright
&
copy;
Lord Justice Elias:
Introduction
- Part IVA, read together with sections 47B and
103A,
of the Employment Rights Act
1996
("ERA"), protects workers who disclose information about
certain
alleged wrongdoing to their employers (
colloquially
known as "whistleblowers") from being subjected to
victimisation
or dismissal as a
consequence.
There is an extended
concept
of "worker" and "employer" in section 43K which ensures that
certain
persons who perform work but do not fall within the general
concept
of worker found in section
230(3)
of the ERA will nonetheless be able to
claim
the protection afforded by these provisions. This appeal
concerns
the proper
construction
of section 43K and the application of that section to a
certain
category
of doctors operating in the
health
service.
- We have heard
valuable
submissions not only from
counsel
for the appellant and HEE,
Mr
James Laddie QC and
Mr
David Reade QC respectively, but also from
Mr
Thomas Linden QC who represented the interveners, Public
Concern
at Work. He
made
submissions principally on the scope of section 43K.
Background
Dr
Day
is a
medical
doctor who wanted to specialise in Acute
Care
Common
Stem Emergency
Medicine.
In early Spring
2011
he was accepted by the London Deanery, the body then responsible for training doctors in London, to take up a post from August in that year. He entered into a training
contract
which the parties agreed was not a
contract
of employment. He was allocated to the respondent
NHS
Trust.
- In April
2013
the Deaneries were taken over by the Local
Education
Training Boards. They have no independent legal personality but are part of the second respondent,
Health
Education
England
("HEE"). Trainee doctors are allocated for relatively short fixed periods to
NHS
Trusts.
They enter into
contracts
of employment with each
Trust.
Initially
Dr
Day
worked at the Princess Royal University Hospital and later, following a short
career
break, was allocated to the Queen Elizabeth Hospital. He trained in intensive
care
and then in anaesthetics before his engagement
came
to an end in August
2014.
- Whilst
Dr
Day
was at the Queen Elizabeth Hospital, he raised a number of
concerns
with both the
Trust
and with the South London
Health
Education
Board about what he
considered
to be serious staffing problems affecting the safety of patients. He alleges that these were protected disclosures within the
meaning
of the relevant legislation on whistleblowers, and he asserts that he was subject to
various
significant detriments by HEE as a
consequence.
He took proceedings before the employment tribunal ("ET") against both the
Trust
and HEE, as the body responsible for the actions of the South London Board. HEE deny any wrongdoing but took a preliminary point that the tribunal had no jurisdiction to hear these
claims.
In order to bring a whistle-blowing
claim,
the applicant has to fall within the statutory definition of worker and the defendant has to be his employer. HEE
contended
that this was not the position and accordingly that even if the facts alleged by
Dr
Day
were true, HEE
could
not be liable in law for any acts
causing
him detriment. It is
common
ground that he did not fall within the definition of worker in section
230(3)
and the only question was whether
Dr
Day
was a worker within the extended definition in section 43K and HEE was his employer as defined in that section.
- This issue was taken at a preliminary hearing. In principle that was in
my
view
a sensible
course
of action. There is
virtually
no overlap in the evidence going to this question and the evidence relating to the
merits
of the whistle-blowing
claims,
and a ruling in favour of HEE would bring the proceedings against it to an end. In
my
view
it would have been desirable for this issue to be taken as a preliminary issue to be determined following findings of fact. Unfortunately, the preliminary hearing took the form of an application to strike out the
claims
on the grounds that they had no reasonable prospect of success. There was an agreed statement of facts as regards the history of
Dr
Day's
involvement with HEE and the ET plainly had some documentation relating to the terms and
conditions
of employment. There were also witness statements from both
Dr
Day
and
Mr
Mckay,
an officer who worked on behalf of
Health
Education
South London, who also gave evidence orally. In the light of the
material
it had, the ET
concluded
that the
claims
against HEE had no realistic prospect of success and struck them out.
Dr
Day
unsuccessfully appealed that decision to the Employment Appeal Tribunal ("EAT"). I gave permission for
Dr
Day
to appeal to this
court.
The legislation
- Section
230(3)
of the ERA provides a general definition of "worker" as follows:
"In this Act "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."
- The extended definition of worker relevant to this appeal is found in section 43K(
1)(a):
"For the purposes of this Part "worker" includes an individual who is not a worker as defined by section
230(3)
but who— "
(a) works or worked for a person in
circumstances
in which—
(i) he is or was introduced or supplied to do that work by a third person, and
(ii) the terms on which he is or was engaged to do the work are or were in practice substantially determined not by him but by the person for whom he works or worked, by the third person or by both of them…..
And any reference to a worker's
contract,
to employment or to a worker being employed shall be
construed
accordingly."
(I will refer to the person for whom the individual works as the end-user, and the party introducing or supplying that worker as the introducer.)
- The subsection then sets out a number of other groups of workers who are brought within the scope of the section including some working in the
NHS
and
certain
individuals pursuing work experience.
- An extended
concept
of "employer" is also adopted, being defined by reference to the extended definition of "worker" in section 43K(
2)(a):
"For the purposes of this Part "employer" includes—
(a) in relation to a worker falling within paragraph (a) of subsection (
1),
the person who substantially determines or determined the terms on which he is or was engaged,
The principal set of relationships
caught
by this definition is agency relationships, but the section is not limited to them.
- I would
make
two preliminary observations about these definitions. The first is that if the terms on which the individual is engaged are substantially determined by the individual himself, he
cannot
bring himself within this extended definition of "worker". That is so even if the end-user and/or introducer
can
also be said substantially to determine the terms of engagement. The second is that if the terms of engagement are not substantially determined by the individual, his employer is the person who does substantially determine them. It is envisaged in section 43K(
1)(a)(ii)
that this
may
be both the end-user and the introducer. That
might
be either because the introducer and the end-user determine the terms jointly, or because each determines different terms but each to a substantial extent.
Mr
Reade submitted that notwithstanding that both introducer and end-user
may
substantially determine the terms of engagement, the definition of employer in subsection 43K(
2)(a)
was limited to the person who played the greater role in determining the terms of engagement. He submitted that this follows from the reference to "the person" in that sub-section. I see no warrant for restricting the scope of the section in that way. By section 6 of the Interpretation Act
1978
the singular includes the plural unless the
contrary
intention appears, and in
my
view
it does not do so here. Indeed,
Mr
Reade's
construction
involves giving a different
meaning
to "substantially determines" in subsection (
1)
than in subsection (
2).
Since both introducer and end-user
can
in principle substantially determine the terms of engagement for the purposes of the definition of worker, I see no basis for
concluding
that they
cannot
do so when it
comes
to applying the extended definition of employer. This will in some
cases
have the effect that both introducer and end-user are employers and each will then be subject to the whistleblowing provisions. Indeed, that would seem to be an inevitable
conclusion
if the terms are determined by the end-user and introducer acting jointly. If only one party
can
be the employer, it is difficult to see by what principle it would be possible to determine who that should be.
The issues in the appeal
- The question for the
courts
below was whether
Dr
Day
and HEE were respectively worker and employer within the
meaning
of the extended definitions. The answer to that question turns on two disputed aspects of the definition of "worker". The first arises in the following way. The extended definition does not apply if the worker already falls within the scope of section
230(3).
Dr
Day
does so with respect to the
Trust;
it is
common
ground that he was employed by them. Does that prevent him from relying upon the extended definition with respect to HEE? This was not a point
considered
by the ET but the issue was argued on appeal before the EAT. Langstaff J held that since
Dr
Day
was employed by the
Trust,
he
could
not take advantage of the extended definition with respect to HEE, and that would be so even if HEE did substantially determine the terms of his engagement.
Dr
Day
submits that the judge was in error in reaching this
conclusion
and has
misconstrued
the section.
- The second issue assumes that HEE
could
in principle
constitute
an employer within the
meaning
of section 43K(
2)(a)
notwithstanding that
Dr
Day
is in a section
230(3)
working relationship with the
Trust.
The question then is whether in the
circumstances
HEE
could
be said to be substantially determining "the terms on which he is or was engaged to do the work" so as to be an employer within the
meaning
of section 43K(
2)(a)?
The ET analysed the relationship between
Dr
Day
and HEE and the
Trust
respectively. It noted that the terms and
conditions
of employment were determined by negotiating bodies on which HEE had no representation. Its overall
conclusion
was that HEE did not substantially determine the terms and
conditions
on which
Dr
Day
was engaged and therefore
Dr
Day
was not their worker and it was not his employer. There was a training relationship which ran alongside the employment relationship but this was not
material
to the terms of engagement. The applications were dismissed on the grounds that they had no real prospect of success. The EAT held that this was a
conclusion
open to the ET on the evidence before it which displayed no error of law.
- The principal ground of appeal with respect to this issue is that the ET wrongly analysed the question it had to determine.
Mr
Laddie submits that it focused on which body, as between the
Trust
and HEE, played the greater role in determining the terms of engagement and thereby failed to appreciate that both
may
do so. It is further submitted that if the proper test had been applied, the only proper
conclusion
would have been that HEE did substantially determine the terms of engagement and therefore
constituted
an employer.
Discussion
- I turn to
consider
the first issue: did the fact that the
Trust
was a section
230(3)
employer preclude HEE from also having that status? Langstaff J
concluded
that it did. He accepted that a purposive approach should be taken to the
construction
of the section, following a number of earlier decisions where observations had been
made
to that effect: see e.g.
Croke
v
Hydro Aluminium Worcester Limited [
2007]
ICR
1303
para.33 per Wilkie J; BP PLC
v
Elstone [
2010]
IRLR 558, para.
17
per Langstaff J and Woodward
v
Abbey National plc [
2006]
EWCA
Civ
822; [
2006]
ICR
1436,
para.68 per Ward LJ. But in his
view
the language of the provision was
clear
and its effect was to deny any remedy to
Dr
Day
against HEE. After referring to the
various
sub-paragraphs in section 43K(
1)
the judge
continued
as follows:
"37. One feature, however, does
cover
all: that is that they
cannot
be a worker as defined by Section
230(3).
Mr
Milsom
had no satisfactory explanation for the presence of those words. The list that follows in 43K(
1)(a)-(d)
is subject to those introductory words. His submission that the words
might
be included as
mere
introductory expression or to provide "belt and braces" does not suffice, for if a person is within 43K(
1)(a)
and is also an employee or a limb (b) worker, there is no need to extend the
meaning
to include him. If the section had been intended to add a
category
of employer against whom a person
might
act in addition to others who were his employer, there would be no need for the words "who is not a worker as defined by Section
230(3)".
They were intended to have a
meaning.
They have no additional force if
construed
as
Mr
Milsom
would wish.
Construed
as
Mr
Siddall suggests, they apply a policy to the effect that those who are workers within Section
230(3)
should adopt the route of
complaint
set out in Section 43C – 43H but have no, and need no, additional protection against those who are
more
peripheral to their employment. There is no reason in policy to include those who are tangential to the work which is relevant.
38. Accepting these submissions, as I do, does no
violence
to the principle of purposive
construction.
The purpose of this part of the Act is to extend the
meaning
of worker to a limited
category
of other relationships. It is, plainly, to give them a route to remedy which they
might
not otherwise have (the agency worker, for instance, is likely to be neither an employee nor worker in respect of the end user under whose
control
the work would normally be performed). That purpose is fulfilled. It does not need the relevant introductory words to be written out."
- I respectfully disagree with this
conclusion.
I would start by observing that there
must
be some limitation on the words of the section. They
cannot
be read literally. Take an agency worker who has a second job serving in a restaurant in the evenings. The fact that she is a section
230
worker in an unrelated position
could
not sensibly preclude her from seeking to rely upon the extended definition of worker with respect to the agency work.
Mr
Reade accepted that this
must
be so. Some words need to be added to the provision to limit the impact of these words.
- The only question is what the limitation should be.
Mr
Reade suggested that the words to be added were "in respect of the worker relationship described below" so that the provision would read:
"" worker " includes an individual who in respect of the worker relationship described below is not a worker as defined by section
230(3)
."
Mr
Linden and
Mr
Laddie would insert some such phrase as "as against a given respondent" so that the definition of worker would be as follows:
""worker " includes an individual who as against a given respondent is not a worker as defined by section
230(3)."
The former insertion would exclude section 43K if the individual has a section
230(3)
relationship with either end-user or introducer, whereas the latter would allow the section to operate against one of those parties even if there was a section
230(3)
relationship with the other.
- In
my
judgment, the latter implication is to be preferred. I say this for a number of reasons. First, I would accept, as did Langstaff J, that the whistleblowing legislation should be given a purposive
construction.
That does not permit the
court
to distort the language of a statute on the
vague
premise that action against whistleblowers is undesirable and should be forbidden: see the observations to this effect
made
in Fecitt and Others
v
NHS
Manchester
[
2012]
ICR 372, paras 58-59 per Elias LJ. So, as
Mr
Laddie accepts, if a training body does not determine the terms and
conditions
of the worker's engagement at all, it
cannot
be an employer within the wider definition. It
can
subject a whistleblowing trainee to a detriment without risk of legal sanction. A
court
cannot
simply ignore the language of the statute to achieve what it
conceives
to be a desirable policy objective. But where, as here, some words need to be read into the provision because a literal
construction
cannot
be what Parliament intended, then in
my
view
the
court
should read in such words as
maximise
the protection whilst remaining true to the language of the statute. In
my
judgment the words which both the appellant and intervener suggest should be inserted better achieve that objective.
- Second, in this
context
I do not accept, as Langstaff J did, that the worker will have no need for protection against the introducer if he has protection against the end-user. That is of no use to him if, as is alleged here, the
victimisation
comes
from the introducer itself.
- Third, for reasons I have given in para.
11
above, in
my
view
under the extended definition
Dr
Day
can
in principle be employed by both the end-user and the third party introducer. There is no obvious rationale in a provision which says that if the individual is a section
230(3)
worker in respect of either the end-user or the third party, he
cannot
rely upon the extended definition against the other. Furthermore, it has odd
consequences.
It
means
that if he is not a section
230(3)
worker with respect to either, he
may
fall within the extended section 43K definition of worker in respect of both and each
may
be his employer.
Conversely,
if he is a section
230(3)
worker with effect to one of them, he
cannot
be a section 43K worker with respect to the other.
- I recognise that it
can
be said that on this analysis the section
230
exception is largely superfluous; it simply removes from the scope of section 43K someone who qualifies as a worker in any event. That was a factor which weighed heavily with Langstaff J. But in
my
view
it is understandable that Parliament
might
want to
make
it
clear
that the section is simply extending the standard definition and that there is no need to engage with section 43K at all if the worker falls within the scope of section
230(3).
- I am reinforced in
my
conclusion
that this is the
correct
construction
of section 43K by the fact that this was also the approach adopted by the
current
President of the EAT, Simler J, in
McTigue
v
University Hospital Bristol
NHS
Trust
[
2016]
ICR
1156.
That
case
raised the question whether an end user in an agency arrangement was an employer within the
meaning
of the extended definition in section 43K. It was submitted, relying upon the EAT judgment in
Day,
that the end-user was not because there was a section
230(3)
relationship with the agency itself.
Mrs
Justice Simler rejected this argument and in so doing highlighted the unsatisfactory
consequences
if it were right. After
citing
paras. 37-38 of the
Day
decision, set out above, she
continued
(paras.
24-29
):
"
24.
The Respondent relies on that reasoning to submit that the opening words of s.43 K(
1)
' "worker" includes an individual who is not a worker as defined by section
230(3)
but who…'
mean
that the extended protection only applies where someone is not otherwise a worker under s.
230(3)
irrespective of the identity of the respondent and the identity of the person with whom the worker has a s.
230(3)
worker relationship. In other words, if an agency worker has a s.
230(3)
'limb (b)' worker
contract
with the agency, the agency worker is excluded from the extended protection available under s.43K(
1)(a)
vis
à
vis
all others, including the end user. The agency
may
be insolvent and the end user
vicariously
liable for the detriments done to the individual in the
course
of working at the end user by its employees because of the protected disclosures, but no remedy is available.
Ms
Fraser Butlin accepts that this interpretation substantially reduces the protection the provision appears to have been intended to afford but submits that Parliament has specifically delineated the extended protection afforded and further submits that for purposes of
clarity
and
certainty
it is important that a worker knows who their employer is for the purposes of
making
a protected disclosure.
25.
I do not accept this submission …
26.
I accept that the opening words in s.43K(
1)
mean
that the provision is only engaged where an individual is not a worker within s.
230(3)
in relation to the respondent in question. If he or she is such a worker there is no need to extend the
meaning
of worker to afford protection against that respondent.
27.
However, an important purpose of s.43K is to extend
cover
to agency workers in relation to
victimisation
for protected disclosures
made
while working at the end user. This
case
exemplifies that situation. Although an employee of Tascor, the
Claimant
was supplied to work at the Respondent's Bridge
centre
with the Respondent's employees who were thus in a position to subject her to detriments after she
made
protected disclosures. It is against that treatment (if it is established) that she requires protection. The extended definition of worker in s.43K(
1)(a)
potentially provides it in respect of her
claim
against the Respondent. The fact that she has worker status in relation to the agency, Tascor, under s.
230
and
cannot
accordingly rely on s.43K in relation to Tascor (and does not need to do so in any event so far as Tascor is
concerned)
is irrelevant in relation to her
claim
against the Respondent. She is not a s.
230(3)
worker in relation to the Respondent. The extended definition of worker provides a potential route to a remedy the
Claimant
would not otherwise have had as an agency worker who is neither an employee nor a limb (b) worker in respect of the Respondent end user for whom she
carries
out the work.
28.
Moreover,
this
construction
gives
meaning
to the introductory words of s.43K(
1)
which apply to all
categories
of worker identified at subsections (a) to (d) and is entirely
consistent
with the stated purpose of the provision. There is no resulting uncertainty or lack of
clarity.
An agency worker
may
complain
to both the end user and the agency about
matters
of
concern,
as the
Claimant
did here, as both are potential employers for protected disclosure purposes.
29.
This
construction
of s.43K(
1)
gives effect to Parliament's intentions as evidenced by the language of the provision having regard to the statutory and social
context.
It is unnecessary to resort to a purposive
construction
that would give an extended
meaning
of 'worker' beyond the legitimate reach of the subsection (whether because it is thought that the broad objective of the statute would be better effected by that approach or on some other basis)."
- I agree with those observations. Accordingly, I would find for the appellant on the first ground. HEE
could
in principle fall within the scope of section 43K(
2)(a)
notwithstanding that
Dr
Day
had a
contract
with the Hospital
Trust.
The second issue
- The second ground of appeal asserts that the ET erred in
concluding
that HEE did not substantially determine the terms on which the worker was engaged. There are two elements to this submission. First,
Mr
Laddie submits that passages in the ET judgment demonstrate that the tribunal was applying the wrong test; it was asking itself which party, as between HEE and the
Trust,
played the greater role in determining the terms on which
Dr
Day
was engaged. It did not envisage the possibility that both
could
substantially determine the terms of engagement. Second, he submits that if the
correct
test had been adopted, the inevitable
conclusion
would have been that the ET
must
have found in his favour.
- I agree with the first submission. In
my
view
on a fair reading of the ET decision, it did
commit
the error alleged. For example, both in para.42 and para.46 the Tribunal appears to have seen its task as being to identify "the body" which substantially determined the terms of engagement, as though it were necessary to identify the single body which was primarily responsible. The Employment Judge evaluated the relationship of
Dr
Day
with both HEE and the
Trust
and
concluded
that the latter had substantially determined the terms. There is no express recognition that both
could
have done so, which in
my
view
is the proper reading of the provision. This reading of the ET's judgment is reinforced when the judgment is
considered
in the light of the submissions in the skeleton argument then advanced on behalf of HEE which we have seen. That was premised on the assumption that the ET should identify as the employer the body which played the greater role in determining the terms of engagement. Indeed, that was also the way in which
Mr
Reade advanced his
case
before us.
- Once the question was posed in that way, realistically there was only one answer. The
Trust
clearly
played a
more
significant role than HEE, as I think
Mr
Laddie accepted.
- In
my
judgment, therefore, the ET did not engage directly with the question whether HEE itself "substantially determined" the terms on which
Dr
Day
was engaged. Langstaff J's analysis in the EAT, as
Mr
Reade submits, is at least
consistent
with the assumption that it was the tribunal's task under section 43K(
2)(a)
to determine which of the two employers had played the greater role in determining the terms of engagement. In
my
judgment that was a
mistaken
approach and it follows that the EAT was wrong to uphold the employment tribunal's
conclusion.
- However, I do not accept
Mr
Laddie's further submission that the ET would have been bound to find in favour of
Dr
Day
had it properly directed itself. He submits that this follows from the fact that it decides for whom the trainee should work. HEE submitted that on the
contrary,
it is
clear
from the reasoning of the ET that it would inevitably have found in its favour. I do not accept that submission either, particularly in the
context
of a strike out application. It is not for this
court
to
make
relevant findings of fact and in
my
judgment the
case
needs to be remitted.
- There is one further
matter
which I should address which emerged during the
course
of submissions (although I doubt whether it will have any
material
impact upon the analysis which the ET will have to
carry
out in this
case).
The issue is whether, when
considering
the terms on which the person is engaged, the tribunal is limited to
considering
contractual
terms and
must
ignore other
matters
which
might
affect the way in which the work is
carried
out but are not
contractual
in nature. The argument in favour of so limiting it is that in Sharpe
v
Bishop of Worcester [
2015]
ICR
1421
the
Court
of Appeal held that in order for section 43K to bite, there
must
at least be a
contract
of some sort with the putative employer. So, it is said, the reference to terms
must
be to
contractual
terms. It is right to say that neither party sought to
challenge
the Sharpe decision nor to suggest that we need not follow it. However, even if it be the
case
that some of the terms of engagement
must
be
contractual
(on the assumption that the relationship needs to be
contractual)
I do not accept that it follows that a tribunal should limit itself to focusing solely on the
contractual
terms, although no doubt the terms will be overwhelmingly
contractual.
The section requires the tribunal to focus on what happens in practice and I do not think that Parliament will have envisaged fine arguments on whether a term is
contractual
or not before it
can
be taken into account. In
my
judgment when determining who substantially determines the terms of engagement, a tribunal should
make
the assessment on a relatively broad brush basis having regard to all the factors bearing upon the terms on which the worker was engaged to do the work.
Disposal
- I would therefore uphold the appeal and remit the
matter.
In the
circumstances
I would remit it to a fresh tribunal to decide as a preliminary issue whether HEE substantially determined the terms of engagement of
Dr
Day.
I appreciate that the original application was a strike out, but as I have explained the former is the
more
appropriate procedure, and the arguments before us were for the
most
part
conducted
as though the employment tribunal had resolved the issue as a preliminary question to be determined. The parties will have an opportunity to adduce evidence about the terms on which
Dr
Day
was engaged by the
Trust
and the tribunal will need to
make
findings of fact from which to
carry
out its assessment of the legal question.
Lord Justice
Moylan:
- I agree.
Lady Justice Gloster:
- I also agree.
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URL: http://www.bailii.org/ew/cases/EWCA/Civ/2017/329.html