The claimant was a taxi driver whose agreement with the respondent was terminated after he refused, quite legitimately according to the Tribunal, to complete a detailed security questionnaire. He claimed that he was an employee of the respondent and therefore could bring a claim before the Employment Tribunal. The ET concluded that he was not an employee by referring to the decision in Ready Mixed Concrete (South East) v Minister of Pensions [1986] 1 ER 433. They ruled that there was no mutuality of obligation: the claimant did not have to work when he did not want to and the respondent did not have to provide him with work, and therefore there was no contract of employment. The claimant appealed mainly on the basis that the ET had failed to apply the tests set out in Ready Mixed Concrete and had failed to give due weight to the test of mutuality of obligations which were satisfied by the claimant.

The EAT considered the 3rd test in Ready Mixed Concrete and concluded that the exchange between the claimant and the Employment Judge confirmed that the claimant could not be an employee because there was no obligation on him to work. The ET was entitled to conclude that there was no mutuality of obligation and therefore the other tests did not need to be considered.

___________________

Appeal No. UKEAT/0413/10/JOJ

EMPLOYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 8 March 2011

Judgment handed down on 16 March 2011

Before

THE HONOURABLE MR JUSTICE SILBER, MR D EVANS CBE, MR D G SMITH

MR D KNIGHT (APPELLANT)

BCCP LTD (RESPONDENT)

Transcript of Proceedings

JUDGMENT

**APPEARANCES**

For the Appellant
MR NIRAN DE SILVA (of Counsel)

Bar Pro Bono Unit

For the Respondent
MISS KATHERINE ANDERSON (of Counsel)

Instructed by:
Messrs Lyons Davidson Solicitors
Park House
87 Burlington Road
New Malden
Surrey
KT3 4QP

**SUMMARY**

JURISDICTIONAL POINTS – Worker, employee or neither

The Claimant was a licensed private hire driver, who was engaged by the Respondent between 1 September 2008 and 14 October 2008. He was told that he would receive mileage rates for the work that he did, that he had to provide his car upon the basis that he paid the insurance as well as the running costs including petrol, maintenance bills and other expenses. The Claimant was paid by submitting an invoice based on the records of the Respondent, but had to pay his own tax and national insurance contributions and did not have any set working hours. The Employment Tribunal held that he was not an employee and he appealed.

Held that the appeal had to be dismissed because there was no mutuality of obligation as the Claimant did not have to work and the Respondent did not have to provide work for him (Ready Mixed Concrete (South East) v Minister of Pensions [1968] 1 All ER 433 applied).

**THE HONOURABLE MR JUSTICE SILBER****Introduction**

1. Mr Danny Knight ("the Claimant") appeals against decisions of the Employment Tribunal dated 18 June 2009 ("the first decision") and 1 December 2009 ("the review decision") by which it was held that he was not an employee of BCCP Ltd ("the Respondent") and that accordingly he did not have the right to notice under section 86 of the Employment Rights Act 1996 ("ERA 1996").

**The Decision of the Employment Tribunal**

1. The finding of the first decision of the Employment Tribunal was that the Claimant was a licensed private hire driver, who was engaged by the Respondent between 1 September 2008 and 14 October 2008. The Employment Tribunal found that the Claimant was told that he would receive mileage rates for the work that he did, that he had to provide his car upon the basis that he paid the insurance as well as the running costs including petrol, maintenance bills and other expenses. The Claimant was paid by submitting an invoice based on the records of the Respondent. The Employment Tribunal found that the Claimant had to pay his own tax and national insurance contributions but that he did not have any set working hours. During his interview, the Claimant indicated that he would work what was known as a "split shift" starting at 2pm and finishing at 1am. The Claimant accepted that if he did not wish to turn up for one day of the week for other reasons, he had no obligation to do so. He did not receive holiday pay, overtime, sick pay and there was no obligation on the Respondent to pay any money except for jobs carried out by the Claimant when he attended for work but the Claimant was provided with jobs by the Respondent. The Claimant had to have the Public Carriage Office Private Hire Driver Licence.

1. The Claimant's work was subject to a degree of control by the Respondent in that they dictated the dress to be worn, how the car was to be presented, how the Claimant was to deal with opening doors and procedure at airports and stations.

1. The relationship between the Claimant and the Respondent terminated when in October 2008 he was asked to complete a detailed security questionnaire in connection with cars provided for government purposes. The Claimant considered the form and decided he was not prepared to disclose the detailed information which it required and in the view of the Employment Tribunal "he was quite within his rights to do this". The agreement was then terminated. The issue before the Employment Tribunal was whether the Claimant was an employee and therefore entitled to one week's statutory money and various consequential losses.

1. In the first decision the Employment Tribunal referred to the decision of Ready Mixed Concrete (South East) v Minister of Pensions [1968] 1 All ER 433 in which a number of well-established tests were set forward to ascertain whether a person could be regarded as "an employee" and then the Employment Tribunal concluded:-

"The approach we adopt is to look at all the matters comprising the contract between the parties which we have set out in our factual findings and to see if there is anything in those terms which is inconsistent with a contract of employment. There are a number of matters which Mr Knight has referred to which are on the face of it inconsistent but not determinative and in that category we could place the fact that he pays his own tax and insurance, the label of sub-contractor and the fact that he provides his own car. What is inconsistent in our view is the working arrangement. There is no obligation on him to work on any given day and when he does make himself available for work there is no obligation on the employer to provide employment to any level at all. It is theoretically possible that Mr Knight could be on shift and not provided with any jobs because there are no convenient jobs for the respondent to allocate. On this basis there is no contract of employment."

1. The Employment Tribunal found that although the Claimant was not an employee he was a worker for the purposes of the ERA 1996 because he fell within the definition in section 230(3) as being somebody engaged under a contract whereby the individual undertakes to do or perform personally any work or services for another party to the contract.

1. As a result of the Employment Tribunal's decision the Claimant was not entitled to the right to notice under s86 ERA 1996 and unable to claim consequential losses under that head.

1. There was then a successful application for a review of that decision but the Employment Tribunal confirmed its original decision.

**The Submissions**

1. Mr Niran de Silva who appears on behalf of the Claimant contends that the Employment Tribunal misdirected itself in law as to the correct test to be applied when considering whether the Claimant was an employee and in particular it failed to apply the tests set out in Ready Mixed Concrete case. He also submitted that the Employment Tribunal failed to adopt the correct approach because it failed to give any weight or any due weight to the test of mutuality of obligations (including personal service) and control which were satisfied by the Claimant.

1. Mr de Silva also contends that the Employment Tribunal wrongly found that the contract of Employment was undermined by the limited ability of the Claimant not to attend work at a particular time and at the same time failed to consider what obligation there was on the Respondent to offer work including whether there was an obligation to offer the Claimant a reasonable amount of work. He also contends that the Employment Tribunal placed undue weight upon the Claimant's view of the working arrangement and that it failed to treat the obligation on the Respondent to pay for work done by the Claimant as being sufficient obligation on the part of an employer to establish a contract of employment.

1. Miss Katherine Anderson, counsel for the Respondent contends that the Employment Tribunal were correct in reaching the decision which it did having applied the Ready Mixed Concrete test.

**Discussion**

1. There is no dispute between the parties that the correct test to apply in this case was that famously set out by MacKenna J in the Ready Mixed Concrete case when he said at page 515 C-D in a passage approved:-

"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."

1. It is noteworthy that:-

(a) These three requirements were described by Buckley J sitting in the Court of Appeal "still the best guide and as containing the irreducible minimum by way of legal requirement for a contract of employment to exist" (Montgomery v Johnson Underwood;

(b) For the claimant to be an employee, there has to be what Lord Irvine L.C. described as "that necessary minimum of mutual obligation necessary to create a contract of service" Carmichael v National Power plc [1999] 1 WLR 2042 [18].

(c) There is no need for the Employment Tribunal to consider each of these requirements in this order but what is clear is that if it wishes to find a contract of service each of these requirements must be satisfied. As Nolan LJ explained in Hall v Lorimer [1994] 1 All ER 250, 256 "there is no single path to a correct decision"; and that

(d) The Ready Mixed Concrete test "permits Tribunals appropriate latitude in considering the nature and extent of 'mutual obligations' in respect of the work in question and the 'control' an employer has over the individual… it directs Tribunals to consider the whole picture to see whether a contract of employment exists" (Montgomery v Johnson Underwood [23]).

1. In this case at the review hearing, the Employment Tribunal stated that they looked at all the matters comprising of the contract between the parties and considered matters which they considered inconsistent but not determinative. The Tribunal explained that "what finally swayed us was the description [the claimant] had himself given about the obligations under the contract". At the forefront of Mr de Silva's submissions was the contention that this exchange did not support the findings in paragraph 10 of the first decision which we set out in paragraph 5 above.

1. The Employment Tribunal then refer at the review hearing to an exchange at the first hearing between the Employment Judge and the Claimant when he was giving evidence and it proceeded in this way:-

"Judge: You said you wanted to work five days and split shifts but if suddenly you did not want to work Wednesday night you could.

Mr Knight: Yes, they might not be happy.

Judge: It was an option?

Mr Knight: Yes, but there might be repercussions – given less work, I thought it a commitment on both sides.

Judge: Could the Respondents send you to an area of London and just give you one job.

Mr Knight: Yes totally in their control.

Judge: In theory you could sit and get nothing.

Mr Knight: Yes.

Judge: And not get paid?

Mr Knight: No.

Judge: So there is no obligation on the Respondents to give you a certain number of jobs?

Mr Knight: But my expectation was to earn the money I'd said."

1. Mr de Silva contends that the conclusions set out in paragraph 10 of the first decision are not supported by the exchange to which we have just referred.

1. It is appropriate to see what obligations the Claimant and the Respondent owed to each other bearing in mind that there was no written contract or any other evidence of an agreement between the parties. Starting with any obligation owed by the Respondent to the Claimant, it is noteworthy that the Claimant accepted that there was no obligation on the Respondent to give him a certain number of jobs although he said "my expectation was to earn the money I had said" and of course "an expectation" is not an obligation. Furthermore it was accepted that the Claimant only got paid for work he did. So there was no mutual obligation on the Respondent of the kind which Lord Irvine said was "the irreducible minimum necessary to create a contract of service".

1. Similarly, the Claimant agreed with the Employment Judge in the exchange set out above that he had an option not to work on a particular day. The absence of such an obligation means that the Claimant cannot be an employee because he had no obligation to work.

1. We consider that the Employment Tribunal was entitled to conclude that the exchange entitled the Tribunal to conclude as it did in paragraph 10 of its first judgment that there were no obligations on the Claimant to work on a given day or for the Respondent to provide work.

1. This would show that there was no mutuality of obligation and so the first requirement of the Ready Mixed Concrete test is not satisfied and so the Claimant is not an "employee".

1. If, which is not the case, we had been in any doubt about this conclusion, there are three additional reasons, which individually and cumulatively show why this conclusion cannot be impugned. First, as was explained by Lord Hoffman in Carmichael v National Power plc [29]: -

"When the intention of the parties, objectively ascertained, has to be gathered partly from documents but also from oral exchanges and conduct. In the latter case, the terms of the contract are a question of fact."

1. That means the findings on the absence of obligations was a question of fact. It is not contended that this was perverse or if it was, such a submission would not reach the high threshold required for a perversity finding which was famously described by Mummery LJ in Crofton v Yeboah [2002] IRLR 634 as being limited to cases "where an overwhelming case is made out that the Employment Tribunal reached a decision which no reasonable Tribunal, on a proper appreciation of the evidence and law would have reached" [93].

1. Second, there is nothing in the remaining evidence to show a mutuality of obligations, as there is no evidence to show for example that the Respondent had any obligation to give the Claimant any work. In any event, a third factor is that the burden of proving that the Claimant was an employee is on him and he has not discharged this onus. We should add that when permission was given for this appeal to proceed, it was suggested that the case of Autoclenz v Belcher [2009] EWCA Civ 1046 might be relevant but neither counsel has relied on it.

1. As there was no mutuality of obligation, it is unnecessary to consider if the other preconditions for identifying a contract of service have been satisfied and so the appeal must be dismissed. The Claimant has the consolation of knowing that every point which could be raised has been pursued by his counsel.