The claimant worked initially as a volunteer in a nursery school. She then made an application for a CRB certificate which she obtained two months after starting as an employee. The claimant claimed that she had not been paid the wages or holiday pay due to her for these two months, the respondent alleging that she was still a volunteer for this period. The central issue for the Tribunal to decide was whether the claimant was an employee, a worker or neither. Unfortunately the EJ did not decide this central issue, instead taking a point of his own which said that the contract of employment during the relevant period was illegal because the claimant did not have the necessary CRB document. Therefore, the Tribunal could not hear her claim.

The EAT was particularly critical of the ET judgment for three main reasons. Firstly the EJ could and should have decided the factual issues between the parties. On the question of illegality he should have ensured that he gave a proper statement of the applicable law; in this case he got it wrong – it was not illegal to employ the claimant without a CRB certificate. Thirdly, the EJ should have initiated a review of the ET judgment once he realised that he had decided the case on a point which he took of his own motion without identifying the legal basis for the point and without giving the parties an opportunity to address him on that legal basis.

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Appeal No. UKEAT/0282/10/SM

EMPLOYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 28 January 2011

Before

HIS HONOUR JUDGE RICHARDSON

(SITTING ALONE)

MRS M CASTELLOTTI (APPELLANT)

MRS C DAGUL AND MRS D MOLITERNO T/A CHEEKY MONKEYS

NURSERY SCHOOL (RESPONDENTS)

Transcript of Proceedings

JUDGMENT

For the Appellant
MRS M CASTELLOTTI (The Appellant in Person)

For the Respondents
MRS D MOLITERNO (The Second Respondent in Person)

JURISDICTIONAL POINTS – Fraud and illegality

The Employment Judge wrongly concluded that between February and April 2009 it was illegal for a nursery school to employ a person without a CRB certificate.

1. This is an appeal by Mrs Marcia Castellotti ("the Claimant") against a judgment of the Employment Tribunal sitting in Watford (Employment Judge Mahoney sitting alone) dated 16 December 2009. By his judgment he dismissed the Claimant's claims of unlawful deduction from wages and unpaid holiday pay.

1. Mrs Dagul and Mrs Moliterno ("the Respondents") run a nursery school. It is common ground that the Claimant began to work there as a volunteer in September 2008. She made three successive applications for a CRB certificate. The first two were rejected because she had not correctly completed the relevant form. The third application was successful. She obtained her certificate in April 2009.

1. The Claimant's case is that although she started as a volunteer she was employed by the Respondents from 3 February 2009 until 15 April 2009 but was not paid the wages or holiday pay due to her. The Respondents' case is that she remained a volunteer. Thus the central issue in the proceedings was whether the Claimant was an employee, or perhaps a worker, for the Respondents, entitled to be paid wages and holiday pay by virtue of contract.

1. The claim came on for hearing before the Employment Judge on 3 December 2009. The Claimant and the Respondents were present. The Employment Judge made some findings of fact, apparently in reliance on the documents. But he did not decide the central issue. Instead he took a point of his own. He said:

"3. The legal position in this case is very simple. Before an individual is lawfully entitled to work with young children it is a legal requirement that that individual has an existing valid CRB entitlement to work document.

4. It is quite clear from the evidence given by the Claimant that during the relevant time that she claims unlawful deduction of wages, in other words non-payment of wages and non-payment of holiday pay, she did not have the relevant CRB document. Therefore any employment by the respondent of the claimant as a nursery assistant would have been illegal. The employment tribunal is not entitled to enforce illegal contracts and in those circumstances the claimant's claim fails."

1. When the Claimant appealed, the Appeal Tribunal asked the Employment Judge to amplify his reasons. He was asked to identify the statutory provisions which the Tribunal applied in paragraph 3 of his reasons and say by virtue of what facts he applied them.

1. In response to these questions the Employment Judge referred to Part 1 of Schedule 4 of the Safeguarding Vulnerable Groups Act 2006 and relied on his finding that during the alleged period of employment the Claimant did not have a "CRB entitlement to work".

1. On examination Part 1 of Schedule 4 of the Safeguarding Vulnerable Groups Act 2006 does no more than define what are "regulated activities" for the purpose of the 2006 Act. No provision within Part 1 of Schedule 4 renders any contract of employment illegal.

1. Neither the Claimant nor the Respondents have the benefit today of legal representation. But at a preliminary hearing of this appeal the Claimant had the benefit of representation under the Employment Law Appeals Advisory Scheme by Mr Matthew Purchase. I am grateful to him for his skeleton argument, upon which she relies.

1. He addressed the position as at February to April 2009, which is of course the relevant period.

1. He pointed out that there was no such thing as a "CRB entitlement to work document", as the Employment Judge suggests. The Criminal Records Bureau issued certificates on behalf of the Secretary of State under Part V of the Police Act 1997. The form of certificate for which the Claimant applied, which reveals the most information, was an Enhanced Criminal Record Certificate. This was governed by section 113B of the 1997 Act.

1. He submitted – and he appears to me to be correct – that the purpose of the scheme was to allow employers to obtain relevant information about employees or prospective employees working in sensitive areas, such as with children or vulnerable adults. Thus the employer had to certify that an application for an Enhanced Certificate is for a prescribed purpose: section 113B(2)(b). The prescribed purposes included those set out in Part of 1 of Schedule 4 to the 2006 Act: see regulation 5A(1) of the Police Act 1997 (Criminal Records) Regulations 1997.

1. He further submitted – and again he appears to me to be correct – that while most employers would require prospective employees to obtain Enhanced Certificates there was at that time no statutory or other provision which required employers or employees to obtain such certificates before entering into contracts of employment, and that it was not unlawful to enter into a contract of employment without such a certificate.

1. He drew attention to section 8 and section 10 of the Safeguarding Vulnerable Groups Act 2006, which might have had such an effect, and also to the Safeguarding Vulnerable Groups Act 2006 (Controlled Activity and Miscellaneous Provisions) Regulations 2010. None of these provisions were in force at the relevant time.

1. Addressing me on behalf of the Respondents, Mrs Moliterno accepts that the Employment Judge was wrong in law. She accepts that it was not illegal to employ the Claimant without an Enhanced Certificate – though she says that Ofsted as a matter of essential good practice will expect an employer to seek such a certificate. She says she appreciated that the Employment Judge was wrong, but had no opportunity to address him, for he dealt with the matter himself at the beginning of the hearing.

1. It follows that the appeal must be allowed and the matter remitted to the Employment Tribunal for a different Employment Judge to hear the case.

1. This is a most unfortunate result for the parties, who have been involved in a point entirely taken by the Employment Judge and have still no resolution of the issues between them. The Employment Judge had three distinct opportunities to avoid this result. I commend them all to him for the future.

1. Firstly, the Employment Judge could and should have decided the factual issues between the parties. The parties were in front of him. He was in a position to hear evidence. An Employment Judge's task is to identify the issues and determine them with appropriate findings of fact, a succinct statement of the law and sufficient reasons to show how the law has been applied. If an Employment Judge is tempted not to determine an issue he should always say why: see rule 30(5)(b) of the Employment Tribunals Rules of Procedure. In this case if the Employment Judge had asked himself why he was not determining the main issue between the parties, he would (I hope) have seen the importance of doing so. If the main issue had been determined then it would not now be necessary for this case to be remitted for that issue to be determined.

1. Secondly, if the Employment Judge was minded to decide the case on a question of illegality he should have ensured that he gave a proper statement of the applicable law: see rule 30(5)(d). I do not underestimate the difficulty of this area for Employment Tribunals. Parties who are representing themselves may mention facts which raise in the mind of a Tribunal a question of illegality, and this may occur without warning or with very little warning. The point may relate to tax, or immigration, or (as here) some other area of regulatory activity outside the normal legal experience of an Employment Judge. But if the Employment Judge is not able to identify the applicable law he may adjourn in order to do so; he may give the parties an opportunity to give evidence and make submissions on the question; and deliver judgment only after taking those steps and dealing with other issues in the case. Better to run the point to earth than to give judgment without stating the applicable law.

1. Thirdly, the Appeal Tribunal's standard order, when asking a Tribunal for further reasons, reminds the Tribunal of its power to order a review of its own motion. In this case there was undoubtedly a procedural mishap: the Employment Judge decided the case on a point which he took of his own motion without identifying the legal basis for the point and without giving the parties an opportunity to address him on that legal basis. Once he realised – as he ought to have done when he answered the Appeal Tribunal's question – that he could not identify a provision rendering the alleged contract illegal, he had power of his own motion to initiate a review: see rule 34(5) and rule 36(2). If he had done so, he would have saved the parties – and the Appeal Tribunal – considerable time and some expense.

1. Now, after a delay of a year and two hearings at the Appeal Tribunal, I am quite satisfied that the interests of justice require remission to be for a completely fresh hearing in front of a different Employment Judge.