Exmoor Ales Ltd & Anor v Herriot

A party cannot ordinarily advance on appeal a new contractual analysis which was not advanced below, particularly where it would require further factual inquiry and seeks to withdraw a concession. The limited exceptions for an obvious established principle or a knock-out point causing glaring injustice did not apply.

Employment status is assessed by weighing the relationship as a whole. An exclusivity obligation, personal service, integration, mutual obligations and substantial control may properly outweigh indicators of self-employment. Reasons are adequate where, read fairly as a whole, they explain that those factors became determinative following a material change in the relationship.

The claimant, an accountant and partner in an accountancy partnership, had provided services to the brewery for many years. From April 2011 she received a quarterly payment which the Employment Tribunal found was consideration for an obligation to work exclusively for the company.

The Employment Tribunal held that the relationship had fundamentally changed. It found that the claimant was employed under an oral contract of employment from 1 April 2011 and was also a worker. The employers appealed, contending that there was no personal contract, that the employment finding was legally erroneous or perverse, and that the reasons were inadequate.

The central issues were whether the employers could raise a new tripartite-contract argument on appeal and whether the Tribunal had lawfully assessed the competing indicators of employment and self-employment.

1. Appeal dismissed. The employers were not permitted to contend for the first time that the claimant had never contracted personally with the company. Their case below had proceeded on a bilateral basis: the claimant personally provided services, but under a contract for services rather than employment. The new argument would require further factual inquiry, including into partnership arrangements, and neither exception for an established point nor the narrow knock-out-point exception applied.

2. The Tribunal was entitled to find that the arrangement fundamentally changed in April 2011. It accepted the claimant’s evidence that the quarterly payment was consideration for exclusivity. Its unchallenged findings were that she was integrated into the business, owed personal service without substitution, was subject to mutual obligations, and worked under a high level of control.

3. The Tribunal had not erred by failing expressly to repeat every indicator of self-employment in its final findings. Read as a whole, its reasons showed that it knew of those matters, including invoicing through the partnership and VAT, but treated them as overridden after April 2011 by the decisive employment indicators. The Employment Appeal Tribunal could not reweigh those matters, and the high threshold for perversity was not approached.

4. The reasons were adequate for the purposes of Rule 62(5) of the Employment Tribunals Rules of Procedure. Although fuller express reasoning would have been preferable, the decision made clear why the employers lost: the new exclusivity obligation, personal service, integration, mutuality and control outweighed the continuing self-employment indicators.

5. Since the employment finding stood, the consequential finding that the claimant was a worker within section 230(3)(a) of the Employment Rights Act 1996 and regulation 2(1) of the Working Time Regulations 1998 also stood.

• Employment Appeal Tribunal: Appeal dismissed: [2018] UKEAT 0075_18_1911.
• Employment Tribunal, Bristol: Employment Judge D Harris held that the claimant was employed by the first respondent under an oral contract of employment from 1 April 2011 and was a worker. The decision was dated 14 September 2017 and sent to the parties on 21 September 2017.