Another football case (Conroy v Scottish Football Association Ltd) has come before the Employment Appeals tribunal, this time a referee who officiated at football matches at the weekend.
Mr Conroy, a referee, brought a claim for unfair dismissal against the Scottish Football Association (SFA). The Employment Tribunal agreed with the SFA’s argument that Mr Conroy was self-employed (as opposed to an employee), and so could not bring a claim for unfair dismissal. On appeal, the EAT found that the Employment Tribunal’s decision was correct. It had carefully considered and weighed up all the relevant factors, some of which were indicative of employment (e.g. Mr Conroy was not entitled to send a substitute in his place and he was covered by the SFA’s private medical insurance), and others which were indicative of self-employment status (e.g. Mr Conroy paid his own taxes, was not subject to disciplinary procedures, and had the right to decline matches). On balance, the Employment Tribunal found that there were more factors which indicated that Mr Conroy was self-employed, and this was a decision that it was entitled to make.
This case is a useful reminder of the factors that Tribunals take into account when considering someone’s employment status. It also provides reassurance to companies that one or two ‘anomalies’ will not necessarily prevent an individual being classified in a particular way; it is a balancing act taking all factors into account.
Standard test for contract of service (employed):
1. 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
2. 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
3. The other provisions of the contract are consistent with it being a contract of service
This test relates to a case known to most as Ready Mix in which MacKenna J also placed significant emphasis on the existence of wages/remuneration, the absence of which there would not be consideration, hence a contract would not have been formed. Specifically:
There was a mutual intention that L was an independent contractor,
Mr L had to wear company uniform,
Mr L did not work set hours and had no fixed meal break,
Mr L was paid a rate per mile,
Mr L had to maintain the lorry at his own expense and pay for its running costs,
The lorry was painted in RMC’s colours and use of the lorry was for RMC business only,
RMC gave no instructions to Mr L about the method of driving the lorry or what routes to take,
Mr L was entitled to employ competent substitute drivers but if RMC were dissatisfied he had to provide another substitute,
Mr L was responsible for paying any substitute.
Readers should be vary cautious of thinking therefore that one simply conjurers a check list of arguments supporting that the worker is self employed or at least not employed by the company because in Yuen v. The Royal Hong Kong Golf Club it was accepted that a “Club’s conduct [might] merely showed that it was consistent in denying the caddies the rights to which, as employees, they were entitled. Such self-serving acts cannot alter their legal status.”
A more useful measure is to be found in In Hall (Inspector of Taxes) v Lorimer where it was determined that
“In order to decide whether a person carries on business on his own account it is necessary to consider many different aspects of that person’s work activity. This is not a mechanical exercise of running through items on a checklist to see whether they are present in, or absent from, given situation. The object of the exercise is to paint a picture from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted by viewing it from a distance, and by making an informed considered qualitative appreciation of the whole. It is a matter of evaluation of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details. Not all details are of equal weight or importance in any given situation. The details may also vary in importance from one situation to another.“
The mutuality of expectation becomes a key issue when it becomes more established. as we see in the case of Nethermere (St Neots) Ltd v Gardiner where it was said that:there is no reason why “… well founded expectations of continuing home work should not be hardened or refined into enforceable contracts by regular giving and taking of work over periods of a year or more, and why outworkers should not thereby become employees under contracts of service like those doing similar work at the same rate in the factory.”
Nethermere helps in some other regards in that it identifies other factors the Court took into consideration: :
- (i) There is no finding (and no evidence) that the factory workers were employed on piece work. The evidence and finding was that Mrs. Taverna was paid according to the number of garments she completed, that she kept time sheets and was paid weekly at the same rate as in the factory. What precisely was the method of payment in the factory was not disclosed by the evidence.
- (ii) Although Mrs. Taverna said at one stage in her evidence that the rate was dropped when she was working on pockets, the tribunal made no finding on this part of the evidence. Mr. Weisfeld was not asked about it. Mrs. Taverna is not recorded as saying that it had been imposed upon her. Later she appears to contradict her earlier evidence: she is recorded as saying “rate always the same.”
- (iii) The finding is not that once the applicants had accepted the work they had to perform it. The finding was that they were free to decide whether to work and, if they chose to do so, they were free to decide for how many hours they would work, provided that it was made worthwhile for the van driver to call. This is merely an agreement that the applicants would make it commercially worthwhile for the employers to send the van to their houses. It does not indicate that the applicants were bound to do the work. If it be the fact that once they had accepted the work, the applicants had to perform it, that is equally compatible with a contract for services in the sense that a failure to perform the work would constitute a breach of contract. To suggest that such a failure would cause the applicants to be “sacked” (that is to be dismissed from the employers’ service) is to beg the question. It might equally be said that the arrangement would be terminated and that the employers would dispense with the applicants’ services. In fact, the applicants did not work sometimes for lengthy periods but the relationship was not terminated.
- (iv) It is true that Mrs. Gardiner stated in evidence that she was asked to go down to the factory to be shown what to do and that if the machine which was provided for her went wrong, she should telephone the factory and the mechanic would come out. But Mr. Weisfeld was not asked about this evidence and there is no finding of fact in relation to it.
- (v) Intentionally left blank
- (vi) There is no evidence that the applicants had to perform the work, although economic circumstances may have made it desirable for them to do it.
Clear as mud!
Employment status is a matter of fact and degree only truly established in a Tribunal (or court). However, other consideration to be pondered are more practical. The Inland Revenue might well have a view that is not conducive to the working arrangements agreed between the workers and the firm – leaving you with a large bill for unpaid NI and Income tax.
Zero hours contracts are becoming increasingly common but the Government have already indicated they are to legislate these out of existence.
Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance  2 QB 497
Hall (Inspector of Taxes) v Lorimer  1 WLR 209
Yuen v. The Royal Hong Kong Golf Club (Hong Kong)  UKPC 40
Nethermere (St Neots) Ltd v Gardiner  ICR 612