On Line Design and Engineering Ltd, R (on the application of) v Engineering Construction Industry Training Board

For levy purposes, whether an employee is a site or off site employee requires a purposive and common-sense assessment of the place where the employee’s work mainly occurs and its relationship with engineering construction activities. The statutory concept of a site is fact-sensitive. Courts should avoid rigid rules based solely on security fences, physical distance, remoteness or the boundaries of an entire industrial installation.

On an appeal limited to errors of law, the Employment Tribunal’s informed assessment of fact and degree should be respected. Where the employer possesses the relevant information but fails to provide sufficient evidence, the appeal may be dismissed without remission.

The claimant operated both an engineering design business and an employment agency supplying staff to industrial clients. The Engineering Construction Industry Training Board assessed levies for 2007 and 2008, treating most agency staff as site employees subject to the higher rate.

The Employment Tribunal held that the claimant was a single leviable establishment. It treated employees working at the claimant’s own premises as off site, but treated the agency employees as site employees or found that there was insufficient evidence to classify them differently. The claimant appealed on a point of law under section 11(1) of the Tribunals and Inquiries Act 1992. The central issues were the proper approach to “site” and the effect of the claimant’s failure to provide detailed evidence about the employees’ work locations.

1. Appeal dismissed. There was no error of law in the Employment Tribunal’s decision. Remission was inappropriate because the claimant had not provided sufficient evidence to enable satisfactory factual findings.
2. The levy scheme involved two distinct questions: first, whether the company was a leviable establishment; and secondly, whether a particular employee was a site or off site employee. The first question did not determine the second.
3. For the second question, the relevant inquiry was:
   1. where the employee’s activities mainly took place; and
   2. whether that was a site where activities within paragraph 1(a)(i), (iii) and (iv) of Schedule 1 to the Industrial Training (Engineering Construction Board) Order 1991 were carried on.
4. The word “site” required a purposive, common-sense and informed assessment. The court rejected rigid rules treating the whole installation within a security fence as the site, or treating only an area cordoned off for immediate safety purposes as the site. Physical separation, intermingling, distance, roads, fences and the character of the office location could all be relevant, but remoteness or a specified geographical distance was not a necessary condition.
5. On an error-of-law appeal, an informed assessment of fact and degree by a specialist tribunal should not be disturbed unless it involved an error of law, irrationality, misunderstanding or disregard of evidence. The claimant had the means of knowledge and was responsible for supplying the evidential basis needed to show that particular employees were off site.
6. The court also ordered interest at 8 per cent from 19 January and awarded the respondent costs on a summary-assessment basis, reduced to £27,000 including VAT. Indemnity costs were refused.

The Employment Tribunal heard the claimant’s appeal against the levy assessments and reduced the 2007 levy while increasing the 2008 levy. The claimant appealed directly to the High Court on a point of law under section 11(1) of the Tribunals and Inquiries Act 1992.

The High Court dismissed the appeal and declined to remit the matter.