PFS Security Ltd. v Smith

A modern apprentice may also be an employee. Where a person is taken on as an employee and later enters modern-apprenticeship training arrangements, the employment contract may continue concurrently with the training agreement. The labels learner or apprentice do not determine the legal relationship. The substance of the arrangements is relevant, including paid work and the identity of the training provider. Permission to advance fresh evidence on appeal should be considered only where the material appears to be of real significance and there is a good explanation for its earlier omission.

Mr Smith succeeded in an employment tribunal claim for unfair dismissal and received compensation. PFS initially accepted his asserted employment dates, but later contended that he had been engaged only as a modern apprentice until shortly before his dismissal and therefore lacked the necessary qualifying period.

The employment tribunal reviewed its decision and found that Mr Smith had been an employee from September 2001, with the training arrangements running concurrently. The Employment Appeal Tribunal upheld the refusal to allow PFS’s appeal to proceed. PFS applied to the Court of Appeal for permission, challenging both the employment-status finding and the refusal to admit further documentary evidence.

1. Permission refused. The employment tribunal had reached a conclusion supported by the evidence, and the proposed grounds disclosed no reasonable basis for an appeal.
2. A person may be both an employee and a modern apprentice at the same time. The fact that training documents describe the person as a learner or foundation modern apprentice does not prevent a contract of employment from existing. Where the person was taken on as an employee, performed paid work and received training from a separate provider, the employment contract may continue while the training arrangements operate alongside it.
3. The conclusion was consistent with Flett v Matheson [2005] IRLR 412. The later Court of Appeal decision in Flett had approved the view that a modern apprenticeship may be a contract of employment overlaid by training rights and duties. Nothing in that decision undermined the employment tribunal’s findings or the Employment Appeal Tribunal’s reasoning.
4. The proposed enrolment form did not establish that Mr Smith had started at college in September, and even if it had been available at the review hearing it would not necessarily have altered the result. Permission to advance a fresh-evidence argument would be contemplated only where the material appeared to be of real significance and there was a good explanation for failing to produce it at the proper time.
5. The document had been available and could have been obtained by PFS. Its omission was PFS’s responsibility, not Mr Smith’s. Allowing the proposed appeal would have risked giving PFS a third opportunity to defend the claim. The application for permission to appeal was therefore refused.

• Court of Appeal (Civil Division) — In [2006] EWCA Civ 627, Lady Justice Smith refused PFS permission to appeal.
• Employment Appeal Tribunal — Mr Justice Keith upheld the decision of His Honour Judge McMullen QC that the notice of appeal disclosed no reasonable grounds and that no further action should be taken.
• Employment Tribunal — Found on review that Mr Smith had been continuously employed from September 2001 until his dismissal and maintained its earlier decision awarding compensation for unfair dismissal.