10.10.13 Absent Employers Still Seen to be in Control – White & Todd v Troutbeck SA

Gary White and Katy Todd worked as caretakers/managers at Starcross Farm which is part-owned by Troutbeck SA, a Panamanian company. Troutbeck terminated its agreement with Mr White and Ms Todd which resulted in them claiming unfair dismissal. The issue for consideration was whether the written agreement between the two parties was a contract of employment, enabling them to pursue their claim.

The original tribunal agreed with Troutbeck on the basis that the company had no day-to-day control over the claimants; therefore, there was no employee-employer relationship.

The decision was appealed on a point of law.

The Employment Appeal Tribunal (EAT) stated that the original tribunal were correct to consider the various tests for employment, as considered in Ready Mixed Concrete. However, it considered that the original tribunal had incorrectly decided the case “principally on a finding of control”. The EAT identified the key question as “whether there is, to a sufficient degree, a contractual right of control over the worker” and not “whether in practice the worker has day to day control of his own work”. There were strong indications in the Agreement that Troutbeck had a sufficient degree of control, even though the claimants could be left in charge and trusted to exercise their own judgement on day-to-day responsibilities. In addition, the agreement contained several references to ‘employment’. On this basis the EAT found Mr White and Ms Todd to be employees.

The decision was appealed and heard by the Court of Appeal.

The Court of Appeal agreed with the EAT that the legal error in the case had been in treating the absence of actual day to day control as the factor to determine the decision. All of the provisions in the written agreement and the whole of the relationship created by it should have been considered.

The Court of Appeal held that Mr White and Ms Todd were employees. This entitled them to bring a claim for unfair dismissal and for arrears of pay, holiday pay and any other unauthorised deduction from wages.

This serves as a reminder to employers using self-employed contractors to ensure written agreements are clear on a worker’s status.

To see full details of the case go to http://www.bailii.org/ew/cases/EWCA/Civ/2013/1171.html