Farmer v Heart of Birmingham Teaching Primary Care Trust

The identity of the employer is primarily a question of fact for the Employment Tribunal. On appeal, its conclusion may be disturbed only for a material error of law or misapplication of principle. The tribunal must ascertain the parties’ actual legal obligations and may consider the written agreement, the parties’ conduct and relevant evidence of their understanding. Subjective intention is evidence, but it is not determinative. Where a written employment document contains a clear mistake and the necessary correction is clear, the tribunal may correct the mistake by construction. That may lead to a conclusion that the document names the wrong employer, even where the correction contradicts its express wording.

The claimant worked in an NHS setting from 1992 until 2012 under schemes supporting employment of disabled people. He claimed unfair dismissal, disability discrimination and an enhanced redundancy payment against the Trust, Birmingham City Council and the Secretary of State.

Following a preliminary hearing, the Employment Tribunal held that the Council, rather than the Trust, had been his employer throughout. It found that the 1992 scheme made the Council the contracting party and that a 2005 tripartite Workstep agreement, although naming the Trust as employer, did not change that position. The claimant appealed on the ground that the tribunal had relied impermissibly on subjective intention rather than objectively ascertained contractual obligations.

1. Appeal dismissed. The Employment Tribunal had not misdirected itself in finding that the Council was the claimant’s employer from 1992 onwards.
2. The distinction between fact and law was decisive. Determining the contractual terms and identifying the true contracting party on the employer’s side are primarily questions of fact. An appeal lies only where the tribunal has made a material legal error, misapplied the governing principles or reached a perverse conclusion.
3. The tribunal was entitled to find that the 1992 arrangements made the Council the employer. The relevant evidence included the Scheme, the offer correspondence, the source of the employment particulars, the Council’s payment of salary and the claimant’s membership of its pension scheme. The tribunal’s findings were open to it and were not legally defective.
4. The Workstep agreement was not a deliberate sham, but a badly drafted document which named the wrong employer. Under Autoclenz Ltd v Belcher and Chartbrook Ltd v Persimmon Homes Ltd, the tribunal could examine the objective reality of the bargain. Evidence of subjective intention was admissible only as evidence bearing on what was objectively agreed; it could not determine the meaning of the agreement by itself.
5. The tribunal was also entitled to apply the principle of correcting a mistake by construction. The question whether a mistake had been made and what correction was required was factual. The continuing payroll, pension, sponsorship and working arrangements, together with the claimant’s later rejection of direct employment by the Trust because it would affect his continuity of service, supported the finding that the 2005 agreement did not vary the employer’s identity.

1. Employment Appeal Tribunal: The appeal from the Employment Tribunal’s preliminary decision was dismissed. The finding that Birmingham City Council was the claimant’s employer, rather than the Trust, was upheld.