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	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Status Scientific Controls Ltd v. Oliver & Anor [2001] UKEAT 1306_01_2711 (27 November 2001) URL: http://www.bailii.org/uk/cases/UKEAT/2001/1306_01_2711.html Cite as: [2001] UKEAT 1306_1_2711, [2001] UKEAT 1306_01_2711

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APPEARANCES

 

For the Appellant	MR CHARLES SAMEK (Of Counsel) Instructed by: Messrs Ashton Bond Gigg Pear Assurance House Friar Lane Nottingham NG1 6BX


 


MR JUSTICE MAURICE KAY

1. This case is listed before us today as a Preliminary Hearing in the appeal of Status Scientific Controls Ltd against decisions of an Employment Tribunal at a Preliminary Hearing which lasted over 3 days in the summer of 2001. The hearing was held in Nottingham. For present purposes the issue that was determined by the Employment Tribunal which is now the subject of the present appeal was whether Mr Oliver, the Respondent, was an employee of the Appellant.
2. The Appellant is an English company substantially owned and controlled by Mr Baxter who is also the Managing Director of it. In addition there is an American company, Status Scientific Controls Incorporated, which is registered in New Jersey and which is also wholly owned and controlled by Mr Baxter who has the title Chief Executive Officer in relation to it.
3. Mr Oliver commenced work with the English company in February 1997 as Sales Manager. A year later he was promoted to the titular position of Sales Director. Between May 1999 and August 2000 Mr Oliver moved to and worked in America for the American company. Eventually his employment was terminated in disputed circumstances which gave rise to the present litigation. As we have indicated the central issue at the Preliminary Hearing as far as Mr Oliver was concerned was whether or not he was at the material time, that is to say post May 1999, still an employee of the English company.
4. That preliminary issue involved an application to the evidence of the legal principles to be found in Ready Mixed Concrete (South East) Ltd -v- Minister of Pensions [1968] 2QBD 497 and other authorities all of which were before the Employment Tribunal and were correctly expounded by the Employment Tribunal in the course of its decision.
5. However, on behalf of the Appellant, Mr Samek seeks to place before the Employment Appeal Tribunal two grounds of appeal to the effect that the Employment Tribunal did not properly apply the undisputed legal principles. Before we deal with the two issues that Mr Samek raises we refer to the passage in paragraph 9 of the decision of the Employment Tribunal which sets out the issues in this way:

"The only question is whether or not he was jointly employed at that time by the respondent. In order for us to find that he was so jointly employed, it seems to us that we must, on the basis of our findings of fact, reach two conclusions. The first is that, doing the best we can on the basis of what was said by the parties at the time and subsequently, and their conduct, the presumed intention at the time of his going out to the USA was that he should be employed by the respondent. The second is that the three parts of the Ready Mixed Concrete test are all satisfied. As we have said, the parties did not, in fact, address their minds at all clearly to the question of the identity of the employer, and we have, therefore, to infer their presumed intention from what little was said on related subjects and from their conduct. We are struck, however, by the fact that Mr Oliver would not in fact have been prepared to go to the USA unless he had believed that his position as to National Insurance and pension in the UK was fully preserved. We put this together with the fact that, so far as he was aware, his salary was simply being paid by the respondent, and that, as we have found, if the visa application in respect of him had failed, he would have asserted and Mr Baxter would have conceded that he had a right to return to work in the UK makes us conclude that the parties intended that his employment in the USA should be of the nature of a secondment, with a right on his part to return to work for the respondent in the UK either if the visa application failed or if circumstances changed before he reached retirement age and he was no longer needed in the USA."

6. The two aspects of the Ready Mixed Concrete test which Mr Samek seeks to address are those of mutuality obligation and control. We turn therefore to the first of those, mutuality of obligation. As to that the Employment Tribunal found that the work done by Mr Oliver in the United States of America was substantially for the American company and not directly for the benefit of the Respondent:

"Though since the two companies were so closely related the Respondent no doubt derived an indirect benefit."

7. The Tribunal then stated this:

"There was, while he was in the USA, no obligation on him to do day-to-day work for the UK company, but, as we have found, there was a common intention on his part and that of Mr Baxter that he might, in certain circumstances, be entitled to return to the UK and take up work for the respondent. In that event, the respondent would have been required to find work for him to do, and he to undertake that work. We conclude that, following the passage that we have quoted from Clark v Oxfordshire Health Authority, that is sufficient mutuality of obligation."

The reference to Clark v Oxfordshire Health Authority [1998] IRLR 125 attracts the following proposition in paragraph 8(b) of the decision:

"An obligation by one party to accept and do the work if offered, and by the other to pay a retainer when work was not available would be likely to suffice."

The point which Mr Samek seeks to make is that here there was no question of a retainer being paid by the English company and he submits Clark is not authority for the proposition that a future conditional or contingent obligation to work which contingency or condition may remain unfulfilled is not enough upon which to base a finding of mutuality of obligation. We have given careful consideration to that submission which was advanced with great skill.

8. However, it is our judgment that on the entirety of the findings of fact in this case it was open to the Employment Tribunal to find a mutuality of obligations in the form in which they expressed it. We do not consider the contrary to be arguable. In our judgment the Employment Tribunal reached tenable conclusions as to the presumed intentions of parties and took into account facts which they were satisfied as having been established in such a way as to justify their conclusion.
9. In our judgment the reference to National Insurance contributions and pension contributions was a reference to relevant material and formed part of the entirety of the evidence which drove the Employment Tribunal to the conclusion that Mr Oliver had made it clear to Mr Baxter that he was prepared to go to the United States only if during his absence both matters were maintained.
10. This is not a case in which the Employer took steps to reduce an arrangement to express written terms which might have produced a contrary conclusion. In our judgment the conclusion of the Employment Tribunal on the issue of mutuality of obligation was a tenable one.
11. We turn then to the second ground which seeks to criticise the conclusion of the Employment Tribunal on the issue of control within the Ready Mixed Concrete test. As we have indicated in paragraph 11 of the decision the Employment Tribunal stated that whilst he was in the United States of America Mr Oliver had "no obligation … to do day-to-day work for the UK company". That leads Mr Samek to submit that if he had been ordered by Mr Baxter to do something for the English company at that time he could lawfully have refused and that, it is suggested, illustrates a lack of control by or on behalf of the English company.
12. Dealing with that and related matters the Employment Tribunal stated in paragraph 12 of its decision:

"We believe that, in the context of two companies that are so closely related as these, this is an artificial and unreal distinction. It is certainly one that it never crossed the mind of Mr Baxter at the time to seek to draw. If either he or Mr Oliver had been asked the question at the time, both would have assumed that Mr Baxter as substantial owner of both companies was entitled to control the activities of Mr Oliver for the benefit of them both. We direct ourselves in the light of the passage from Motorola Ltd -v- Davidson & Melville Craig that whatever may have been the precise legal analysis, the reality of control was present."

13. Once again in our judgment that was a conclusion which the Employment Tribunal was entitled to reach. We have come to the conclusion that there is no arguable basis upon which it can be attacked and for that and the reasons that we have indicated previously we do not consider this to be an arguable appeal. Accordingly it will be dismissed.