White & Anor v Troutbeck SA

A contract of employment is assessed by the multi-factorial test in Ready Mixed Concrete. The essential control inquiry is whether the putative employer retains a contractual right to control the work to a sufficient degree, not whether it exercises daily supervision.

Control extends to what is done, how, when, where and by what means. An absentee owner may delegate day-to-day management while retaining the ultimate right to give instructions. Express contractual rights concerning expenditure, holidays, outside work and the management of property may establish sufficient control even if they are not exercised.

The claimants were engaged under a written agreement as caretaker/manager and caretaker of a farmhouse and estate owned by the respondent. They performed maintenance, gardening, housekeeping and estate-management duties, lived in an adjoining flat, and received a monthly allowance.

The Employment Tribunal held that they were workers and that Troutbeck SA was their contracting party, but rejected their contention that they were employees. It considered that the owners had delegated day-to-day control and lacked sufficient actual control.

The claimants appealed against that finding. The central issue was whether the contractual relationship was a contract of employment within section 230 of the Employment Rights Act 1996.

1. Appeal allowed. The Employment Tribunal erred in treating the absence of day-to-day supervision as determinative. Applying Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497, the correct inquiry was whether Troutbeck retained a contractual right of control sufficient to make it employer.
2. The Ready Mixed Concrete formulation is multi-factorial. Control is an important element but not the sole test. It includes the right to determine the work, its method, means, time and place. Skilled or trusted workers may enjoy substantial autonomy while remaining employees. What matters is the employer’s lawful authority to command where there is scope for it, not the frequency with which that authority is exercised.
3. The written agreement showed sufficient retained control. Troutbeck could receive reports before maintenance involving expenditure began and could give instructions about such work. It retained control over improvements, holidays and outside work that might diminish performance. The owners also retained the normal right to give reasonable instructions concerning the upkeep and preparation of their home and grounds when visiting.
4. The oral discussions relied on by the Tribunal concerned delegation of daily duties. They did not show that Troutbeck had surrendered its ultimate contractual right of control. As the agreement was not alleged to be a sham, and the relevant rights were contained in it, non-enforcement of those rights did not remove them from the contract.
5. Once the correct legal approach was applied, the only possible conclusion was that the claimants were subject to sufficient control and that the remaining contractual provisions were consistent with employment. A finding was substituted that both claimants were employees of Troutbeck.

• Employment Appeal Tribunal: appeal allowed; the Employment Tribunal’s finding that the claimants were workers but not employees was replaced with a finding that they were employees.
• Employment Tribunal, London South: judgment dated 6 June 2011. It held that the claimants were workers for the purposes of the Employment Rights Act 1996, but not employees.