Appeal No.UKEAT/0073/04/MAA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 19 October 2004

Before
HIS HONOUR JUDGE MCMULLEN QC
(SITTING ALONE)

DRIVERTIME MANCHESTER LTD	APPELLANT

MR T SUMMERS	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	No appearance or representation by or on behalf of the Appellant	
For the Respondent	MR B WOODALL
(Representative)
South Derbyshire Citizens Advice Bureau
48 Grove Street
Swadlincote
Derbyshire
DE11 9DD	

SUMMARY

Working Time Regulations

Applicant was not an employee, but was admitted to be a worker.  Whether or not affected (as a worker) by a TUPE transfer.  Respondent represented in a bilateral oral agreement that it would continue to be responsible for the Applicant, and was liable for holiday pay.

HIS HONOUR JUDGE J McMULLEN QC

1.	This is a claim under the Working Time Regulations 1998 for payment of holiday pay on the cessation of a relationship.  I will refer to the parties as Applicant and Respondent.  It is an appeal by the Respondent in those proceedings against a Decision of an Employment Tribunal, Chairman Mr J A Threlfell, sitting alone, registered with Extended Reasons on 8 December 2003, and so I hear the appeal under Employment Tribunals Act 1996 section28(4) (judge alone).  The Applicant was represented by Mr B R Woodall of the South Derbyshire CAB, as he is today.  The Respondent relied on written representations as it does today.  

2.	The essential issue for the Employment Tribunal to decide was the entitlement of the Applicant, if any, to holiday pay from the Respondent.  This case came before Burton P on 10 March 2004 when, at a preliminary hearing, he ordered the matter to go forward to a full hearing, having heard representations on behalf of the Respondent, made by Mr Anthony Wilk.  The President made a number of criticisms of the Employment Tribunal Decision and corrected a logistical error in the appeal, for it appeared to be brought by a company which was not the subject of the Employment Tribunal proceedings.  That was regularised in the Order, sealed on 15 March 2004.

3.	The issue on appeal is whether the Tribunal erred in deciding the Applicant was entitled to a sum of £445.50.  The Applicant was engaged in a triangular relationship, whereby he was supplied, pursuant to a contract described as “terms and conditions for temporary workers” by Drivertime Derby to H K Wentworth, where he worked as a packer.  Wentworths are in Swadlincote.  They paid Drivertime Derby for the services of the Applicant from September 2002 until February 2003.  Then it is contended that Drivertime Derby went out of business.  The mechanism by which the Applicant continued to work at the premises of Wentworths was that Drivertime Manchester, the current Respondent, instructed him so to do.  Drivertime Manchester has terms and conditions for temporary workers (page 30A).  At first sight this appears to be a contract for services.  The Applicant continued to work in that relationship until June 2003, when he left and claimed his holiday pay.  

4.	The Chairman accepted the evidence of the Applicant, who was the sole source of the evidence, plus admissions from the Respondent, for the Chairman recorded as follows:

“8.	On the evidence of the applicant and taking into account admissions by the respondent, I am satisfied that the applicant was an employee of the business called Drivertime Derby.  It is clear that that business was taken over by the respondent in February and the applicant was then employed by the respondent on its own admission.  The applicant’s employment was transferred to the respondent at that date under the Transfer Regulations.  The employment did not further transfer to another company in July, because the applicant ceased to be employed by the respondent and, although he carried on working at the same premises the respondent’s business was not transferred.  The applicant took up fresh employment with a completely independent company.”

5.	The question in the case now is whether there was a worker relationship with the Respondent.  Mr Woodall accepts that Drivertime Derby went out of business in February, although his primary case was that there was a transfer of an undertaking.  If it were a transfer of an undertaking, he accepts that it would not be sufficient to transfer the contract of employment of the Applicant since he, on this footing, was not an employee of Drivertime Derby, but was engaged by it on a contract for services.  

6.	The Chairman decided that the Applicant was employed by Drivertime Manchester, upon its own admission.  The difficulty is that the admission given by the Respondent is that the Applicant had indeed been engaged by Drivertime Manchester, but upon a contract for services.  That admission cuts two ways.  First, it is an admission that the Applicant was in a relationship which is regulated by the Working Time Regulations, which has an extended definition of those people who are protected, see for example Part 5, Regulation 36 and the definition of “worker” in Regulation 2(1), which provides as follows:

““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;
and any reference to a worker's contract shall be construed accordingly;”

7.	The liability of Drivertime Manchester to the Applicant for holiday pay is therefore correctly established.  What about the period prior to that?  The Chairman decided that the Applicant was entitled to holiday pay, calculated by reference to his starting work in September 2002, on work to which the Regulations applied.  In other words, between September 2002 and February 2003 the Applicant was engaged by Drivertime Derby.  I have no difficulty in understanding this, for the terms and conditions of Drivertime Derby appear to be the same as those of Drivertime Manchester, establish the same worker relationship and would be regulated by the Regulations.

8.	It is a feature of this case that there is no written documentation, apart from that to which I have referred.  What is relied on instead is a warranty, that is a letter written on 26 February 2003 from Amanda Langley, a Branch Manager at another business called Drivertime Leicester.  This is described as being a warranty that everything would remain the same. A picture has been painted to me by Mr Woodall of the Applicant continuing to work at his work station at Wentworths in exactly the same way, but now the money paid by Wentworth went via Drivertime Manchester into the pay of the Applicant.  Everything else remained the same.

9.	If there were TUPE transfer, it would affect employees but not self-employed people such as the Applicant.  It is possible for there to have been an employment relationship under the principles set out by the Court of Appeal in a judgment which was not given until after the Decision in this case in Brook Street Bureau (UK) Ltd v Dacas [2004] EWCA Civ 217, approving McMeechan v. Secretary of State for Employment [1996] EWCA Civ 1166.  

10.	The warranty, as it is put, describes discussions which took place before the ceasing to trade, if that is correct, of Drivertime Derby.  The Chairman took evidence about what had been said:

“The applicant was told that this did not affect him, except that he would need to send his timesheets to the Leicester office.  It was confirmed that the Derby business had been transferred to the respondent, being the head office.”

Plainly there was material before the Chairman on the unchallenged evidence of the Applicant that a guarantee had been given to him that everything would remain the same except for the payer of his wages.  

11.	If I were construing simply the letter of 26 February 2003, I would reject Mr Woodall’s contention that this is a warranty.  However, that is not my task.  I have considered the material reported by the Chairman as being before him, and that does indicate a warranty to the Applicant that Drivertime Manchester would be responsible for continuing the relationship, such as it was, in which case it would include the responsibility for holiday pay under the Regulations.  Thus I uphold the Applicant’s contentions that the Tribunal made the correct Decision in finding him covered by the Regulations and the Respondent liable to holiday pay.

12.	I now deal with the quantification of that, because the President in his judgment indicated that there may be flaws in it.  However, Mr Woodall, who has appeared before me, has given me an insight into the way in which this was calculated and I am satisfied that the Chairman’s calculations as to the payments due are correct from paragraph 9 of his Decision.  

13.	It follows that I will dismiss the appeal, thanking Mr Woodall for both his written and oral submissions, and uphold the Decision of the Chairman.