Keppel Seghers UK Ltd v Hinds

For the extended whistle-blowing definitions in Part IVA of the Employment Rights Act 1996, worker and employer status is not confined to the immediate contractual structure. A tribunal may adopt a purposive construction and consider how the relationship arose and operated in practice. Contractual documents are a useful starting point, but the statutory questions concern whether the individual was introduced or supplied and who substantially determined the terms of engagement in practice. The individual may qualify even when services are provided through an agency and a personal service company. A contractual substitution clause is relevant but does not necessarily exclude protection. Control is relevant, although the absence of close day-to-day supervision is not decisive.

Mr Hinds, a health and safety consultant, provided services through his wholly owned company, Crown, after being sourced by First Recruitment Ltd for work with Keppel Seghers UK Ltd. There was no direct contract between Mr Hinds and Keppel.

Following a preliminary hearing, the Liverpool Employment Tribunal held that Mr Hinds was a worker under section 43K(1)(a) of the Employment Rights Act 1996 and that Keppel was his employer under section 43K(2)(a). Keppel appealed, contending that Crown was the relevant worker, that the contracts were determinative, and that Crown rather than Keppel substantially determined the engagement terms.

Appeal dismissed. The Employment Tribunal had correctly applied the extended statutory definitions and had reached conclusions open to it on the evidence.

1. Section 43K of the Employment Rights Act 1996 is confined to Part IVA protection for protected disclosures and deliberately extends worker and employer status beyond the ordinary contractual approach. A purposive construction is appropriate where it can properly provide protection rather than deny it. The provision can apply where there is no contract between the individual and the end-user, including arrangements involving an agency and the individual’s service company.
2. For section 43K(1)(a)(i), the tribunal must determine whether the individual was introduced or supplied to do the work. Contractual terms may provide a useful starting point, but the tribunal may also consider the practical relationship. Here, the contractual specification, suitability requirements, interview process and operation of the arrangement supported the finding that Mr Hinds, rather than Crown, was introduced and supplied. A right of substitution may be relevant, but it does not necessarily prevent the individual from being supplied. The point did not require final determination because the relevant contractual arrangements did not confer an effective substitution right against Keppel.
3. For sections 43K(1)(a)(ii) and 43K(2)(a), the terms of engagement may have been substantially determined by more than one entity. The tribunal must consider the contractual arrangements and how they operated in practice. Control is relevant to that assessment, but it is not the statutory test and the absence of close supervision is not conclusive. Keppel set the work specification, determined working arrangements and required reporting to its manager. Those findings supported the conclusions that Keppel substantially determined the engagement terms and was the employer for section 43K(2)(a).

The tribunal had not decided the case by policy considerations, nor had it impermissibly focused on a single term. Its findings were adequately reasoned and did not meet the stringent threshold for appellate interference with factual conclusions.

• Employment Tribunal, Liverpool: At a pre-hearing review on 1 May 2013, with written reasons sent on 8 July 2013, held that Mr Hinds was a worker under section 43K and that Keppel was his employer under section 43K(2)(a) of the Employment Rights Act 1996.
• Employment Appeal Tribunal: Appeal dismissed.