Yorkshire Window Company Ltd v Parkes

An appeal is not properly constituted where an Employment Tribunal has issued judgment in separate tranches and the appellant fails to lodge the written record and reasons for each decision relevant to the appeal.

Whether an individual is a limb (b) worker under Working Time Regulations 1998, regulation 2, depends on the contract. The tribunal must determine whether the individual undertook personally to perform work or services and whether the other party was not a client or customer of a business undertaking carried on by the individual. A limited power of substitution, available only on inability and involving an approved substitute, may remain consistent with personal service. The assessment of business undertaking is fact-sensitive and requires a holistic analysis of the contractual relationship.

The Employment Tribunal rejected the claimant’s claim to be an employee but held, in two decisions dated 19 June and 18 August 2009, that he was a worker under regulation 2 of the Working Time Regulations 1998. The claimant sold double-glazing products for the appellant under a written agreement describing him as self-employed. The agreement allowed him to reject leads, but imposed restrictions on competing work and required an accepted appointment to be covered if he was unable to attend.

The appellant appealed on personal service, business undertaking, adequacy of reasons and the validity of the appeal documentation. The central issues were whether the substitution clause removed any obligation of personal performance, whether the claimant was in business on his own account, and whether the two Employment Tribunal decisions had to be read together.

1. Constitution of appeal. The two Employment Tribunal decisions formed one decision, with the first containing material findings on contract and personal service and the second addressing the remaining issue of business undertaking. Under rule 3(1) of the Employment Appeal Tribunal Rules and paragraph 2 of the Practice Direction, the appellant was required to lodge the written record and reasons for both decisions. The appeal was therefore not properly constituted. The Tribunal nevertheless considered the merits because the claimant did not pursue the procedural objection.
2. Personal service. The question was one of construction of the contract, not general policy. Personal performance depended on contractual obligation, not on the claimant’s choice to perform the work himself. Clause 2.9 permitted substitution only where the claimant had accepted a lead and was unable, rather than unwilling, to attend. The substitute had to be another member of the appellant’s sales force. The clause therefore did not confer an unfettered right to delegate and was consistent with an obligation of personal service.
3. Business undertaking. The distinction between a worker and an independent business undertaking required a careful analysis of the contract as a whole. The claimant’s self-employed tax treatment and VAT registration were relevant but not decisive. The contractual restrictions, the allocation of leads, the commission structure and the practical exclusivity of the relationship entitled the Tribunal to find that the claimant was not carrying on a business undertaking of which the appellant was a client or customer.
4. The Tribunal was entitled to use the dominant-purpose analysis as an aid to identifying the essential nature of the relationship. The contract was predominantly one for dependent work services, rather than a contract between two independent businesses.
5. The reasons in the two decisions, read together, identified the material issues and explained why the claimant was a worker. They complied with rule 30(6) of the Employment Tribunal Rules of Procedure.
6. The appeal was dismissed.

• Employment Tribunal, Sheffield: On 19 June 2009 the Tribunal rejected employee status and made findings on contract and personal service. On 18 August 2009 it held that the claimant was a worker under regulation 2 of the Working Time Regulations 1998.
• Employment Appeal Tribunal: The appeal was dismissed. The two Employment Tribunal decisions were required to be read together, and the Tribunal’s conclusion that the claimant was a worker was upheld.