Koenig v The Mind Gym Ltd UKEAT/0201/12/RN

Appeal against a ruling that the claimant did not have the requisite 1 year continuity of employment to bring a claim of unfair dismissal. Appeal dismissed.

The claimant signed an employment contract with the respondent in August 2009, the contract stating that her employment would start on October 1. She was dismissed on 29 September 2010, being one day short of a year's service. In September 2009, before she actually started work with the respondent, she attended a meeting with a prospective client of the respondent. There was no obligation for her to attend, she was not there in a capacity as an employee of the respondent, she was not paid to attend and she went entirely of her own choice. The claimant, however, argued that her attendance at the meeting should be regarded as being work done under the contract. The ET rejected her argument, saying that there was no employment relationship, by which he meant contract of employment, operating on that date. The claimant appealed.

The EAT dismissed the appeal. The question was not whether the claimant worked for her future employer, but whether that was work under the contract of employment which had been entered into.  On the facts, the ET was entitled to hold it was not.

Appeal No. UKEAT/0201/12/RN



At the Tribunal

On 8 March 2013





Transcript of Proceedings



For the Appellant
MR P HIRST (Representative)

For the Respondent
MR S CHEETHAM (of Counsel)

Direct Public Access Scheme


UNFAIR DISMISSAL – Exclusions including worker/jurisdiction

The question was the date on which the Claimant began work for the Respondent, for the purpose of calculating sufficient service to bring a claim for unfair dismissal. She had been engaged from 1 October, and dismissed one day short of a year's service. She argued that her attendance at the invitation of R at a meeting of one of its employee's with a client, who was due to become a client of C's once employed, for some hours on the 30 September, should have been regarded by an Employment Tribunal as being work under the contract.

Held: that the question was not whether C worked for her future employer, but whether that was work under the contract of employment which had been entered into. On the facts, the ET was entitled to hold it was not. Accordingly, C's appeal failed.

  1. The legal question posed by this appeal relates to how a Tribunal should approach activities undertaken by an employee at the request, but not the requirement, of an employer prior to the date on which it has been agreed between them work under a contract of employment will be begin. In what circumstances will a period of continuous employment run from the date on which the activities are undertaken as opposed to the date which has been contractually agreed?
**The facts**
  1. The Claimant left employment having been dismissed on 29 September 2010. If her employment under the contract began, as the written agreement between her and the Respondent provided, on 1 October 2009, she lacked one year's continuous service, albeit only by one day. However, on 29 September 2009, she had attended a meeting. The meeting was related to her employer's undertaking. The employer had told the Claimant that it would be of benefit to her, to the client and to the employer's project if she were to attend. It would be 'useful' for her to go. The question posed for determination by a Tribunal at London Central (Employment Judge Sigsworth) was whether her attendance was work under a contract of employment such that section 211 of the Employment Rights Act 1996 provided it would start her period of continuous employment.
  1. Section 211 is critical to the issue. It provides at sub-section 1:

"(1) An employee's period of continuous employment for the purposes of any provision of this Act -

(a)…begins with the day on which the employee starts work…"

  1. These days most employees will have entered into a contract with their employer before they start work under it. It is now trite law that although they do not work under it at the time, during the period between their entering into the contract and first working under it they are under a contract of employment. The definition of "employee" is in section 230 of the Act. It is in these terms:

"(1) In this Act 'employee' means an individual who has entered into or works under (or, where the employment ceased, worked under) a contract of employment."

That section draws a distinction between entering into and working under the contract of employment. They may be, and frequently are, two separate things. It was recognised in Sarker v South Tees Acute Hospitals NHS Trust [1997] ICR 673 by the Appeal Tribunal that a contract entered into between an employee and employer which anticipated work would begin at a later date was a contract of employment and not merely a contract for employment. This case has been followed without a contrary authority since, most recently before this Tribunal in [Welton v Deluxe Retail t/a Madhouse (In Administration)]() [2013] ICR 428.

  1. What, then, does the expression "work" mean in section 211? On the face of it, it is a word which invites a number of questions. Work for whom? Work where? And, more particularly, what counts as work? Those questions, however, are not to be answered in a vacuum. Taking the clause as a whole it refers to an employee starting work. Since "employee" is defined as it is in section 230 the work referred to must necessarily be work in respect of which the individual concerned is an employee; that is somebody who has entered into or works under a contract of employment. Therefore, Mr Hirst, who appears for his wife, the Claimant, though he is himself a member of the Bar, accepted that natural reading of those words in context means that work is work under and not collateral to the contract of employment.
  1. That approach is entirely consistent with an earlier decision of this Tribunal in General of the Salvation Army v Dewsbury [1984] ICR 498. That case concerned a teacher who accepted a full-time teaching post starting on 1 May, which happened to be a Saturday, followed that weekend by a Bank Holiday Monday. When dismissed on 30 April in the next year the Tribunal had to determine whether she had sufficient continuity of employment to bring a claim for unfair dismissal; the Tribunal concluded that she had. The approach it took in a Judgment given by Nolan J to the meaning of starting work is at 502 E - F:

"At the end of the day the question for our decision is a short one. We answer it by saying that in our judgment the phrase "starts work" in section 151(3) [we interpose to say that is the statutory predecessor of section 211] is not intended to refer to the undertaking of the full-time duties of the employment: it is intended to refer to the beginning of the employee's employment under the relevant contract of employment."

  1. The same reference is made to the need for the work or, in that case, the employment to be under the relevant contract. Working cannot be under a contract of employment if it is contrary to the terms of that contract of employment, unless the contract is varied or unless it represents a separate and ancillary collateral contract or something of that sort.
  1. Here, therefore, it was, I accept, on the submissions of Mr Cheetham in response, that the Judge logically had to have in mind that the parties had agreed that work under the contract would begin on 1 October. Either the work on 29 September was not under the contract or the contract had to have been varied to include it. Mr Cheetham submitted, and I accept, that where an employee who has yet to start work accepts an invitation from an employer to, for instance, a social function or, for instance, to pop in for coffee to see a future manager, that would sit at one end of a spectrum of activities which are plainly work related, but neither would constitute work under the contract itself. At the other end of the spectrum he proposed was a person who in advance of a contractual starting date went into the office at 9:00 am, left at 6:00 pm being under the control of the supervisor throughout that period. That, he submitted, was plainly and obviously work. Even though the contract might provide for a later date, it would be plain to any observer that the parties had agreed that the employee in such a case would be working for the employer under a contract of employment at that time and, therefore, whether under a separate contract or whether under the original contract as varied would have continuity of employment starting from that date.
  1. The issue as to where on the spectrum a given situation fits is thus inevitably a question of fact if the right approach is identified.
  1. Here the Judge posed himself the issue in these terms at paragraph 5:

"On what date did the Claimant start work for the respondent, by reference to her contract of employment (see the Dewsbury case)?"

Although the purist might argue that "by reference to" is broader than it needed to be since the statutory test would seem to be "under" the contract of employment, that would favour the Claimant rather than the Respondent. If it is an error it is immaterial therefore in the present context. I take the view that it was an appropriate self direction in law.

  1. The facts which the Judge then had to consider in answering the question he had posed himself involved first identifying the contract of employment under which she might have worked. It was the case that she had signed a written contract on 14 August 2009; that stated that her employment would begin on 1 October and her period of continuous employment would commence on that date. I accept Mr Hirst's submission that the start of a period of continuous employment is a matter of the application of statutory provisions. It is a statutory construct. Though more often to be relied on in relation to the termination of employment the principle that it is a statutory construct and the parties are not free to agree to the contrary is, it seems to me, correct. But they are free to agree the terms of a contract, and if the work has to be done under that contract then it is relevant to look at the start date for which that contract provides.
  1. The Claimant had attended a team meeting on 14 September (the Judgment says October but I think it must be September). She had been invited to a breakfast event on 23 September and, thirdly, she was told of a client meeting which was to take place on 29 September. The Respondent provided consultancy services to sophisticated clients. One of those was Grant Thornton. The meeting was with them. It was to be conducted by a Ms Rolf. The Claimant was not instructed to attend but invited to do if she wished. The circumstances are set out at paragraph 3.3 of the Judgment.
  1. The Judge identified these particular features of the arrangement. Ms Rolf was taking the meeting on behalf of the Respondent. It was not a meeting for which the Respondent itself was remunerated by Grant Thornton. The Respondent regularly sent those who were not actually employees to observe client meetings. She was not told to hold herself out as an employee of the Respondent to Grant Thornton.
  1. The Claimant was not paid for her attendance at the meeting. She did not request any such payment at any time. In the light of that the Judge thought that, in his conclusions, the case really hung on whether it could be said that her attendance at the meetings with Grant Thornton amounted to an implied agreed variation of her contract so that she started work on that date and her employment should have been taken to have started work then. He regarded this as a matter of fact. In doing so he was adopting a submission made to him by Mr Hirst; see paragraph 5.
  1. What he took into account was that Grant Thornton were to be clients with whom the Claimant would work, that her presence at the meeting was useful to the Respondent and she no doubt felt that she should attend. However, she was neither paid for her attendance nor required to attend and her attendance was in no way essential for the meeting. She was not paid for going. She had never suggested prior to her dismissal that her work had begun on that date. The Judge made no finding about the length of time that the meeting took in comparison to the usual working day. If the matter is to be treated as one of fact and if the direction given by the Judge is appropriate then it is only if the decision is perverse that it can be overturned here. I am satisfied that it is not perverse. A challenge to the judgment on that basis has not been pursued before me.
**The grounds of appeal**
  1. Mr Hirst raises these grounds in an attractive argument: first, that the Judge focused, to the extent of being fixated, upon the question of variation. This is to give the contract a primacy over the fact which needs to be established. Continuity of employment is a purely statutory concept. The Judge has not asked or answered the question when the Claimant started work. He had, rather, asked and attempted to answer whether there had been a variation of the contract in writing.
  1. In oral submissions he flirted with the suggestion that Dewsbury might been wrongly decided. He argued that the case of Fitzgerald v University of Kent at Canterbury [2004] ICR 737 was relevant. In the Judgment of Sedley LJ at 744, paragraphs 20 and 21 of the decision it is said that the effective date of termination, which was in issue in Fitzgerald, is a statutory construct which depends on what has happened between the parties over time and not on what they may agree to treat as having happened. Sedley LJ added at paragraph 21:

"We are concerned here with the impact of voluntary arrangements on the provisions of a statute which it is worth recording bears the short title of the Employment Rights Act."

  1. He submitted that the analysis performed by the Judge of the facts was less than fully careful as it needed to be and that to rely too heavily upon the contract and the starting date of 1 October was to provide that that contract had the effect that it was treated by the Judge as trumping the statutory provisions which looked to the actual fact of beginning work.
  1. The cases showed consensus as to the effect of Dewsbury. In this Tribunal in the case of Convergent Telecom Ltd v Swan, 20 November 2002 UKEAT534/02, a decision of an Appeal Tribunal presided over by HHJ Pugsley, the court in looking at again the ending of the employment relationship between the parties refused to go beyond the words of section 211. It regarded the issues posed as common sense. In Ochika Stella v The Regard Partnership UKEAT614/06 8 March 2007, a decision of HHJ Birtles sitting alone, the Tribunal was focused upon the starting date to be adopted under section 211. It regarded the question as one of fact. The fact that she had an unpaid training day and that her name appeared in the employer's payroll were regarded as irrelevant. The date to be adopted was the date which common sense dictated on the facts.
  1. It seems to me that neither of those cases shows any uncertainty about the scope of the Dewsbury decision, but in any event I should apply the words of section 211 and look to see what the Judge found the facts to be asking the question when was work first done under a contract of employment.
  1. Work outside a contract of employment, though it might have some relationship to it, cannot count. At times it may be difficult to see precisely where the dividing line is. That is the task of the Employment Judge. If he properly directs himself then it is unlikely that the answer will be wrong. In most situations in which any significant activity has been performed which is to the benefit of the employer, by someone who anticipates being in employment with that employer, it will be easy to infer that the parties have agreed that there will be a contractual relationship under which that activity is performed. But it all depends upon the evaluation of the activity: I accept entirely the submission that there be many different such activities and that it is a matter of fact and degree whether they give grounds for, or compel, the conclusion that the work done is work under a contract of employment bearing in mind that there may be a contract of employment separate and distinct from the one which is about to commence on a previously agreed date.
  1. Here the Judge dealt with both possibilities. He principally focused upon the contract which had been agreed, but by his findings that there was no obligation to go to the meeting, that she was not there in a capacity as an employee of the Respondent, that she was not paid for doing so and she went entirely of her own choice he was entitled to conclude that there was no employment relationship, by which he meant contract of employment, operating on that date: see paragraph 6(iii).
  1. The facts were sufficiently found to answer the questions of essential fact which the Judge had posed himself. There is no proper "reasons" challenge. He was entitled to conclude, in my view, that the work done, if it could properly be characterised as work, was not done under a contract of employment with the Respondent and accordingly continuity of employment began as the statute provided on 1 October.
  1. Whilst acknowledging the style with which the submissions have been advanced by Mr Hirst, this appeal must be dismissed.

Published: 03/05/2013 15:10

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