Appeal No.	 EAT/324/99

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 30 June 1999

Before
HIS HONOUR JUDGE PETER CLARK
MR L D COWAN
MR S M SPRINGER MBE

MRS S J MITCHELL	APPELLANT

SWIFT DRY CLEANERS	RESPONDENTS

Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING – EX PARTE

Revised

	APPEARANCES

For the Appellant	THE APPELLANT IN PERSON	

	JUDGE PETER CLARK:

1.	The appellant, Mrs Mitchell, was initially employed by the respondent, Mr Wilkinson t/a Swift Dry Cleaners, as an assistant at a dry cleaning shop in the High Street, Buntingford on 30th July 1984. She remained so employed, progressing to the position of manageress of three shops owned by the respondent in 1989. She often said to the respondent, with whom she enjoyed a good relationship, that she would like to run her own business.

2.	To that end, in 1995, the respondent suggested that she have his shop at Stanstead in her own name. A bank account was set up in her name and she moved from the PAYE system to paying tax and National Insurance on a self-employed basis. She approved the accounts for the Stanstead business. She continued to assist the respondent in running his other business interests.

3.	In June 1997 she was asked whether she wished to take over the Stanstead store completely or whether she wished to take over a new business recently acquired by the respondent called Muffins, a bakers. She opted for the latter and a formal licence agreement was drawn up, providing for payments by the appellant to the respondent and making it clear that she was entitled to the profits from that business. She accepted that Muffins was her business. She registered for VAT purposes.

4.	In addition to running Muffins, the tribunal found that the appellant agreed to assist the respondent in his other enterprises at a flat rate of £115 per week plus VAT. That was about one half of what she had been receiving when solely engaged in the Stanstead shop. It was for her to apportion her time between Muffins and the respondent’s other business interests.

5.	After a year, on 26th June 1998, a meeting took place between the appellant and the respondent at which, she alleged, he told her that he was fed up with her “having a go” at him and that it was time for a parting of the ways. She claims that that amounted to instant dismissal from her employment with the respondent. She presented a complaint of unfair dismissal to the Employment Tribunal on 21st August 1998.

6.	In response, the respondent claimed that the appellant was self-employed and thus was not entitled to bring her claim of unfair dismissal under the Employment Rights Act 1996. Alternatively, he contended that she was guilty of gross misconduct.

7.	The matter came on for hearing before an Employment Tribunal sitting at Bury St Edmunds, chaired by Mr B G Mitchell on 18th December 1998. The hearing was listed for a full merits hearing but at the outset, it is recorded by the tribunal in their decision promulgated with extended reasons on 13th January 1999, it was agreed between the parties that the issue of whether or not the appellant was, at the time of her alleged dismissal, an employee within the meaning of s. 230(1) of the Act would be determined first.

8.	The tribunal found:

(1)	That the appellant was an employee of the respondent from 1984 to 1995.

(2)	That the position between 1995 and June 1997 was problematical, but it was not necessary for the tribunal to make a finding as to that period.

(3)	From June 1997 the appellant was not employed by the respondent under a contract of service. Accordingly the tribunal had no jurisdiction to entertain the complaint.

The tribunal reached that conclusion having set out the factors which, in their view, pointed for and against employment status in paragraph 13 of their reasons. A highly compelling piece of evidence, so the tribunal thought, which pointed to a contract for services was the fact that the appellant had registered for VAT purposes and that a VAT element was contained in addition to the weekly payment of £115 after June 1997.

9.	In this appeal the appellant takes essentially two points. First, she submits that the tribunal was wrong to treat the issue of whether or not she was an employee as a preliminary issue. The case had been listed for a full merits hearing; she was not properly prepared to deal with that issue.

10.	We reject that submission for these reasons. First, Mrs Mitchell does not contend that she applied for an adjournment of the hearing in order to prepare herself to deal with the issue of her employment status. But even if she had done so, we can see no reason why such an adjournment would have been granted. It was quite clear from the respondent’s Notice of Appearance that he was taking the point that she was self-employed. It follows that at any full merits hearing the issue of her employment status would arise. The fact that it was taken as a preliminary issue does not seem to us to have placed the appellant at any procedural disadvantage.

11.	Secondly, she submits, that the tribunal’s finding that she was not an employee was perverse. She attacks in particular the tribunal’s finding that she was paid the sum of £115 plus VAT for the service which she provided the respondent after June 1997. However, she tells us that she did not raise that point in evidence before the tribunal. (It is now well established that new evidential points, which could have been raised below, will not be permitted to be raised for the first time on appeal.) In any event, we see from her form IT1, by which she commenced these proceedings, that she there describes her basic wage as £115 per week. She says that she put it in that way rather than £135 a week, she now says she understood to be a VAT free weekly payment, because after her dismissal Mr Wilkinson had told her that her weekly payment contained a VAT element. If that is so we are surprised that Box 8 of the Form IT1 did not make it clear that the weekly payment was £115 plus VAT.

12.	We have considered the tribunal’s assessment of the factors pointing towards and against a contract of service in paragraph 13 of the reasons. We remind ourselves that it is essentially a question of fact for the Employment Tribunal, having weighed up the factors for and against, in reaching a conclusion as to whether or not the complainant is employed under a contract of service. We can see no basis in law for interfering with the tribunal’s conclusion in this case. It seems to us that their finding was a permissible one on the facts before them. 

13.	In these circumstances, it seems to us, this appeal raises no arguable point of law and, accordingly, it must be dismissed at this stage.