Express & Echo Publications Ltd v Tanton

A contract of employment requires an irreducible obligation upon the worker to perform services personally. A genuine contractual right allowing the worker, whenever unable or unwilling to work, to provide a suitable substitute at the worker’s expense is inconsistent with employee status.

The tribunal must identify the parties’ contractual obligations before classifying their relationship. Actual performance may expose a sham or explain the practical operation of the agreement, but failure to enforce a term does not remove it from the contract. Where a genuine term is inherently inconsistent with employment, contrary factual indicators cannot convert the agreement into a contract of service.

A newspaper publisher re-engaged a former employee as a delivery driver under an arrangement intended to create a self-employed relationship. The written terms permitted the driver, whenever unable or unwilling to perform the services personally, to arrange and pay for a suitable substitute. He exercised that right occasionally and, during one period of illness, for six months.

The Industrial Tribunal nevertheless classified the arrangement as a contract of employment after considering the publisher’s control over the hours, route, vehicle and uniform. The Employment Appeal Tribunal held that this was a permissible conclusion and refused leave to appeal. Pill LJ granted leave to appeal to the Court of Appeal.

The central issue was whether the genuine substitution term was inherently inconsistent with a contract of employment.

1. Appeal allowed unanimously. Peter Gibson LJ delivered the reasoned judgment. Auld and Hirst LJJ agreed. The only conclusion properly available was that the agreement was a contract for services rather than a contract of employment.

2. A tribunal determining employment status should first establish the terms agreed by the parties. It should then decide, as a question of law, whether any term is inherently inconsistent with a contract of employment. If there is no such term, it should classify the agreement by considering all its terms, which is a mixed question of law and fact.

3. The tribunal had erred by concentrating upon what happened in practice instead of determining the parties’ mutual contractual obligations. Practical reality remains important, particularly where an asserted obligation is a sham. However, failure to enforce a genuine term does not show that it ceased to bind the parties; it may merely have been waived temporarily.

4. Personal service is an irreducible minimum of a contract of employment. A worker who is free to perform the work personally or procure another person to do it lacks the necessary obligation to provide personal work and skill. A limited or occasional power of delegation may be compatible with employment, but the present provision was unrestricted whenever the driver was unable or unwilling to work.

5. The substitution clause was genuine and had been exercised. It permitted the driver to avoid performing any services personally, provided that he found a suitable substitute. It was therefore inherently inconsistent with a contract of service. Indicators such as control of the route, hours, vehicle and uniform could not overcome that legal consequence.

6. The driver’s account of an incident in which he was allegedly compelled to work while ill had not been given in evidence before the Industrial Tribunal. It could not be introduced as a factual basis before the appellate courts and, in any event, did not alter the contractual substitution right.

1. Court of Appeal: In [1999] EWCA Civ 949, the court unanimously allowed the publisher’s appeal and held that the agreement was a contract for services.

2. Employment Appeal Tribunal: Held that the Industrial Tribunal chairman had reached a permissible conclusion, found no arguable point of law and refused leave to appeal. Pill LJ subsequently granted leave to appeal to the Court of Appeal.

3. Industrial Tribunal: Determined the preliminary issue in favour of the driver, holding that he was an employee under a contract of service.