Status Scientific Controls Ltd v Oliver

Whether a contract of employment continues during an employee’s work for an associated company depends on the reality of the relationship, assessed in fact and in law. The court should not treat established legal categories as closed slots or insist on a rigid factual framework. Continuing mutuality of obligation may exist where the parties reasonably understood that the employee could be recalled and that work, or recognition of a breach, would await him on return. Hypothetical examples in earlier authorities must be used as illustrations, not as exhaustive legal requirements. An employment tribunal’s application of these principles to its factual findings will not disclose an error of law merely because another legal analysis might be advanced.

An Employment Tribunal held, on a preliminary issue, that Roland Oliver had remained continuously employed by Status Scientific Controls Ltd while working in the United States for an associated company controlled by the same proprietor. The Employment Appeal Tribunal dismissed the employer’s appeal under its preliminary procedure, holding that the Employment Tribunal’s conclusion was legally tenable on its findings of fact.

The employer renewed an application for permission to appeal, arguing that there had been no continuing mutuality of obligation because Mr Oliver’s United Kingdom role had been filled and his work in the United States made performance for the applicant impossible. The central issue was whether the tribunal had applied the law correctly in determining the continuing employment relationship.

Application refused. Lord Justice Sedley held that there was no realistic prospect of permission being granted or the appeal succeeding.

1. The essential question was whether the relationship, viewed in its factual and legal reality, amounted to a continuing contract of service. The court accepted that mutuality of obligation is an essential element of such a contract, as stated in Ready Mixed Concrete Limited v Minister of Pensions and National Insurance [1968] 2 QB 497. That principle did not require the court to force the facts into previously recognised categories.

2. The proper approach was to examine the reality on the ground and ask what it amounted to both in fact and in law. On the tribunal’s findings, Mr Baxter and Mr Oliver would have expected Mr Oliver to return if recalled from the United States. If the American company failed, work would have been expected to await him in England, or the failure to provide it would have been understood as a breach by the English company. Those facts provided an ample basis for finding continuing mutuality of obligation and a continuing contract of service.

3. The employer’s reliance on a hypothetical example in Clark v Oxfordshire Health Authority was misplaced. The example illustrated one possible situation in which employment could exist outside the usual factual framework; it did not prescribe an exhaustive test.

4. The Employment Tribunal had directed itself correctly on the law and reached a conclusion open to it on the facts. The Employment Appeal Tribunal was entitled to uphold that conclusion. Section 55 of the Access to Justice Act 1999 did not govern the application, which was not a second appeal within that provision.

Order: application refused.

• Court of Appeal (Civil Division): renewed application for permission to appeal refused; the Employment Appeal Tribunal’s dismissal of the employer’s appeal remained undisturbed.
• Employment Appeal Tribunal: appeal dismissed on its ex parte preliminary procedure, holding that the Employment Tribunal’s conclusion was legally tenable.
• Employment Tribunal: found that Mr Oliver had been continuously employed by the applicant company.