Veitch Penny LLP - Exeter | Crediton, Devon

Case

Raymond Franks v (1) Reuters Limited (2) First Resort Employment Limited - Court of Appeal - (10 April 2003)

Issues

(1) Contract of employment
(2) Temporary workers
(3) Mutuality of obligation

Facts

The Applicant commenced employment for the First Defendant in 1993. He was employed on a temporary placement as a driver through an employment agency (the Second Defendant). The Applicant became a full time driver after six months. Later he was transferred to another position.

After nearly six years of employment, he was informed that his services were no longer required. The Applicant made a complaint to the Employment Tribunal on the basis of unfair dismissal, claiming redundancy pay and damages for breach of contract. The First Defendant denied that the Applicant was its employee, arguing that he was employed by the Second Defendant. The Second Defendant also denied that they had employed the Applicant.

The Employment Tribunal held that the Applicant was not an employee of either Defendant, as there was no mutuality of obligation between the parties, the existence of which is central to any employment relationship.

The Appeal Tribunal upheld the decision. The Applicant appealed this decision submitting that the Employment Tribunal had been incorrect when considering whether he was an employee. It was further submitted that it had failed to consider whether there was an implied contract of employment between the Applicant and the First Defendant and had failed to consider evidence, or make findings of fact relating to the issue.

Decision

The appeal would be allowed, and the decision of the Employment Appeal Tribunal reversed (reported here in September 2002).

It was found that a tribunal could not conclude whether a person was not an employee without determining whether there was an implied contract of service between the parties. In order to do this, it would have to consider all the facts and documentation, including what had been said and done by the parties. The Tribunal had merely focused upon the concept of mutuality of obligation and had failed to consider the existence of an implied contract, and had therefore failed to give proper consideration to all the evidence relating to that issue.

Comments

It was noted that determining the nature of a work relationship was becoming ever more difficult in light of the increasing complexity of work relations. This would mean that tribunals should take even more care to consider all the relevant evidence in determining the dynamics of that work relationship.

With regard to the relevance of the length of service, it was noted that whilst a person does not become an employee simply through the passing of time, in this case the period of time was such that it was capable of creating an implied contractual relationship.