Gordon v The Chair Of Newham Council For Racial Equality & Anor [1998] UKEAT 1029_97_0304 (3 April 1998)

JUDGMENT Revised © Copyright 1998 APPEARANCES For the Appellant MR M F JENKINS (Representative) For the first Respondent For the second Respondent MR P HERBERT (of Counsel) Messrs Zoi Solicitors 548 Barking Road Greengate Plaistow London E13 9JU MR R OPPENHEIM (of Counsel) The Commission for Racial Equality Elliot House 10-12 Allington Street London SW1E 5EH JUDGE PETER CLARK : By an Originating Application presented on 6th November 1996 the appellant, Mr Gordon, complained of constructive unfair dismissal by Newham Council for Racial Equality ["NCRE"], alleging that he had been continuously employed between 15th May 1991 and 11th September 1996. In the body of his complaint he alleged, in paragraph 1, that he was employed by NCRE and in paragraph 3 that he had held the position of Director since 11th January 1996 but had been continuously employed by the Commission for Racial Equality ["CRE"] on successive contracts since 15th May 1991. NCRE resisted the claim, taking the preliminary jurisdictional point that the appellant had not completed two years continuous service. They contended that the appellant had been continuously employed by NCRE from 15th January to 27th August 1996 and that further, if he alleged that he had been continuously employed for more than two years by CRE, that body should be named as a respondent. CRE was duly joined as second respondent. The matter came on for hearing before a Chairman, Mr J N Leonard, sitting alone at Stratford Industrial Tribunal on 4th July 1997. The issues for determination were: (a) whether the appellant had completed two years continuous service; and (b) whether or not he was an employee of CRE. The Chairman held, in a decision with extended reasons promulgated on 11th July 1997, that the appellant was at no time employed by CRE; that he could rely only on a period of service from January to September 1996 with NCRE, and that accordingly the Industrial Tribunal had no jurisdiction to entertain his complaint of unfair dismissal. Employment Rights Act 1996 s. 108(1). Against that decision the appellant brings this appeal. The Facts The appellant described himself as having made a career in race equality work. In May 1991 he commenced work for the Westminster Community Relations Forum ["WCRF"], becoming its Director on 1st January 1992. On 15th January 1996 the appellant was appointed Director of NCRE, a registered charity and unincorporated association. Following his appointment the appellant drafted his own contract of employment, which was signed by him and on behalf of NCRE by a Mr Massey on 8th July 1996. Under the written contract it was expressly provided that the employment commenced on 15th January 1996 and by Clause 4: "Your period of continuous employment commenced on 15th May 1991, as your previous employment with Westminster Race Equality Council and with Westminster Community Relations Forum counts as part of your period of continuous employment with NCRE. (Please refer to Red Handbook Section 46)." The Red Handbook which was incorporated into that contract of employment is a Guide for Racial Equality Councils ["REC"] published by the CRE. Part 1 sets out the CRE's conditions of grant aid to RECs and Part 2 is headed Good employment practice. Section 46 provides: "46. Continuity of Service 46.1For the purposes of calculating sickness, maternity, redundancy and annual leave payments and entitlements, all previous service with an REC shall be deemed to be continuous, provided that any break of a year or more is such previous service shall result in service prior to that break being disregarded." WCRF, we are told, was an REC. Pausing there, section 46 does not purport to deal with continuity of employment for the purpose of unfair dismissal protection. Even had it done so, it is clearly established that continuity is a statutory not a contractual concept. See Secretary of State for Employment v Globe Elastic Co [1979] ICR 706 . The material provisions of the 1996 Act are ss. 218(6) and 231 (Associated employers), since, for there to be continuity of employment between successive associated employers, those employers must be limited companies, see Gardiner v London Borough of Merton [1980] IRLR 472 . It follows that WCRF and NCRE, being unincorporated associations, cannot be associated employers for the purpose of continuity, assuming that there was no material gap in time between the two employments not covered by the provisions of s. 212. However, that is not the way in which the appellant put his case. He contended that CRE exercised such influence and control over the affairs of RECs that it was properly to be regarded as the appellant's employer. Accepting that the contracts of employment were in fact entered into with the appellant by WCRF and NCRE, he argued that they did so as agents for CRE. The Chairman accepted that the CRE does exercise considerable influence over RECs. He found that the CRE contributed about one-third of the NCRE's funding; the remainder coming principally from the local authority. That financial input allows CRE to dictate the contents, particularly pay levels, of contracts of employment entered into by RECs. CRE from time to time recommended candidates for vacant posts within RECs, as was this appellant's experience. However, the appellant was appointed by NCRE; was under that body's control and could be dismissed by NCRE. As to the agency argument, the Chairman could find no basis on which it could be said that NCRE were acting as agents for CRE in employing the appellant on their behalf. There was no evidence that CRE did appoint NCRE as agents for that purpose, nor did they have ostensible authority so to act. In advancing this appeal we think that Mr Jenkin's real complaint on behalf of the appellant is that it is wrong that a body, in this case the CRE, which exercises a degree of control over the terms and conditions of employment entered into between an REC and its employees through its funding structure, should not be accountable as if it were that employee's employer. That complaint is really directed, in our view to the limited statutory definition of associated employers. Even there, a holding company exercising complete control over its wholly-owned subsidiaries in which an employee successively works would not be treated as employer. In any event, it is for Parliament to change the law, not this tribunal. The only way in which the case can be put is on the basis that NCRE entered into the contract of employment signed on 8th July 1996 as agent for CRE. Like the Chairman we regard that submission as unarguable applying the ordinary principles of agency to the facts as found. The only representation which could be regarded as having been made by CRE to the appellant is the content of the Red Handbook, incorporated into the contract. The Handbook expressly provides in paragraphs 9 and in the case of race equality officers 47.3 of Part 1 that staff are employed by the REC and no by the CRE. It follows that there can be no implied agency which is inconsistent with that express representation/term of contract. Nor can NCRE be said to have apparent or ostensible authority to enter into a contract of employment with the appellant on behalf of the CRE in these circumstances. Accordingly, we have considered that the basis of the case advanced by the appellant below, and it follows before us, is misconceived in law. Finally, Mr Jenkins submits that the Industrial Tribunal decision is perverse in its effect. That is not an argument in law. It is not a proper ground for alleging, as does the appellant in his Notice of Appeal, that the Industrial Tribunal Chairman reached a perverse decision in law in giving undue weight to certain factors and insufficient weight to others. British Telecommunications PLC v Sheridan [1990] IRLR 27 . In his written submission Mr Jenkins refers to five tests which determine an employer/employee relationship. However, we accept Mr Oppenheim's submission that the question is not whether the appellant was employed under a contract of service, he plainly was, but by whom he was employed and for how long. In our judgment the answer to that question is that given by the Industrial Tribunal Chairman. Accordingly, this appeal must be dismissed. BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII