Appeal No. UKEAT/0238/05/ZT

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 16 March 2007
Judgment handed down on 4 April 2007

Before
THE HONOURABLE MR JUSTICE WILKIE
MR G LEWIS
MR P SMITH

MR G J CROKE	APPELLANT

HYDRO ALUMINIUM WORCESTER LTD	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR SIMON DEVONSHIRE
(Of Counsel)
Instructed by:
Messrs Wright Hassall
Solicitors
9 Clarendon Place
Leamington Spa
Warwickshire
CV32 5QP	
For the Respondent	MR JOHN BOWERS
One of Her Majesty’s Counsel
Instructed by:
Clarks Legal LLP
Solicitors
One Forbury Square
The Forbury
Reading
Berkshire
RG1 3EB	

SUMMARY

Preliminary issues

The EAT concludes that in construing the statutory definition of “worker” for the purposes of the provisions providing protection for protected disclosures under Part IV A of the Employment Rights Act 1996, it is appropriate to adopt a purposive approach.

Accordingly, where an individual supplies his services to an employment agency through his own company and the employment agency, in turn, provides the services of that company to an end user, it may be that in appropriate circumstances the individual is a “worker” of the end user for the purposes of this part of the 1996 Act.

THE HONOURABLE MR JUSTICE WILKIE

1.   On 25 June 2004 the appellant (Mr Croke) made a complaint to the Employment Tribunal (ET) under section 48(1)(A) of the Employments Rights Act 1996 ( the 1996 Act) that he was a worker who had been subjected to a detriment in contravention of section 47(B) of that Act.   Section 47(B) provides that a worker has the right not to be subjected to any detriment by any act by his employer done on the ground that the worker has made a protected disclosure.   The section does not apply where the worker is an employee and the detriment in question amounts to dismissal within the meaning of Part X of the 1996 Act.   Section 43(A) of the 1996 Act provides that a protected disclosure is a qualifying disclosure, as defined by section 43(B), which is made by a worker in accordance with any of sections 43(C) 43(H).

2.   The complaint launched by Mr Croke was made against two respondents: Huxley Associates Ltd (Huxley) and Hydro Automotive Structures UK Ltd (Hydro).  On 14 February 2005 the ET sitting at Birmingham held a preliminary hearing to consider two issues identified at a case management discussion held on 8 November 2004.   Those issues were:

1.  Whether or not the claimant was a worker; and
2.  If so who was his employer.

By a decision promulgated on 24 February 2005 the ET decided as follows:
“1.  By consent the claim against the first respondent (Huxley) is dismissed upon withdrawal…
3.  The tribunal does not have jurisdiction to hear the claim against the second respondent and this is dismissed.”

The appellant appeals against this latter decision.   The question which arises for decision is whether, on the facts and applying the statute, he was a worker either within section 230(3)(B) of the 1996 Act or pursuant to section 43(K) of the 1996 Act.

The facts
3.       Mr Croke is a consultant engineer.   In July 2001 he incorporated Amerstar Ltd.   He is the sole director of that company and his wife is the secretary.   Huxley is a recruitment consultancy providing recruitment services primarily in the field of information technology and engineering.   In January 2003 Mr Croke sent his general CV to Huxley.   In June or July 2003 Hydro identified the need for five manufacturing engineers and requested Huxley to identify possible candidates.   Mr Croke provided an up to date CV a copy of which was sent by Huxley to Hydro.   He attended a working interview on 23 July with Hydro and was offered work.

4.   On 21 July Mr Croke signed, as director of Amerstar, a contract with Huxley for the provision by Amerstar to Huxley of technical services.   The contract was between Amerstar and Huxley. Mr Croke was not a party to it.   It is on a standard form supplied by Huxley. In it Huxley is referred to as “the company” and Amerstar as “the service provider”.  The “service provider” is defined as the limited company with which the agreement is made.  The “consultant” is defined as the person provided to carry out the Services and specified in Schedule 1.  The “client” is defined as the company specified as such in Schedule 1.  The “Services” are defined as all services performed by the service provider detailed therein and in the Schedules.   The agreement was for 23 weeks from 23 July 2003.   Mr Croke is named in Schedule 1 to that agreement as “specified consultant”. The schedule defines the hourly rate, the standard working commitment and the fee rate, which is the multiple of hourly rate and standard working commitment.

5.   Clause 3.8 of the agreement provides:
“The service provider may substitute the consultant named in schedule 1 provided that: 
1.  The services remain as detailed in the agreement
2.   The client and the company are reasonably satisfied that the proposed substitute possesses the necessary skills, expertise and resources to fulfil the services
3.   The client is reasonably satisfied that the proposed substitute will comply with its rules on health, safety, security and confidentiality
4.   No delay or reduction in quality shall occur due to the lack of technical or client knowledge held by the substitute”.

On 18 December 2003 this contract for the provision of technical services between Amerstar and Huxley was extended and Mr Croke, as director of Amerstar, signed an identical agreement.

6.   By an agreement signed by Huxley on 26 September and by Hydro on 4 September 2003 Huxley and Hydro entered into a contract for the supply of technical services. It too is on a standard form provided by Huxley and it mirrors the contract between Huxley and Amerstar.  Huxley is described as “the company,” Hydro as “the client”.   The preamble to the agreement provides that the client wishes to utilise the services of a service provider to be provided by the company.   The service provider is defined in the agreement as “the limited companies employing the consultants and with whom the company has contracted to carry out the services,…”

The definition clause defines the “consultant” as meaning “the person stated in schedule 1” and the “services” as meaning “all services provided by the service provider detailed herein and in the schedules”.    

7.     Schedule 1 describes the client as Hydro, the consultant’s name as Mr Croke and the service provider as Amerstar.   It defines the hourly rate, the standard working commitment and the client rate which is the sum of the hourly rate multiplied by the standard working commitment.  From this can be deduced the mark up charged by Huxley. This contract contains an identical provision to the clause contained within the contract between Amerstar and Huxley permitting the service provider to substitute the consultant in the same set of circumstances.   

8.     Amerstar sent a monthly invoice to Huxley supported by Mr Croke’s time sheet for the provision of intellectual engineering consultancy services.   Huxley sent a monthly invoice to Hydro.   Payment by Huxley to Amerstar was not dependent on payment by Hydro to Huxley.   Amerstar paid Mr Croke on an “as and when required” basis and details of that salary were contained in the annual audited accounts.   Mr Croke did not receive dividend payments.

9.    There were at least three other consultant engineers working on the same project and provided by Huxley. Each had an incorporated company as service provider.  

10.     The second contract between Huxley and Amerstar was due to expire on 7 July 2004.  However, following a falling out between Mr Croke and certain employees at Hydro, Mr Vine of Hydro notified Huxley that Hydro no longer wanted the claimant on site.   This was evidenced in two ways.   Mr Vine sent an e-mail to Mr Croke on 12 March 2004 in the following terms:
“Gerry, confirming our conversation this morning that your existing contract with Hydro will finish on the 26th of his month, 14 days notice from to-day”

and on 15 March 2004 Huxley sent notice to Amerstar as follows:
“Dear Sir/Madam,
re Notice of Termination.   
We have received notice of termination from Hydro Automotive Structures (UK) Ltd with effect from the date of this letter.   We therefore regretfully have to give Gerry 14 days notice of termination and the contract will now end on 26 March 2004”.

11.   Throughout the two contracts Mr Croke was the only consulting engineer provided by Amerstar.   In evidence, Mr Vine admitted that he would have been unhappy to accept a substitute because he had spent time training Mr Croke to carry out the necessary engineering tasks.   Mr Vine accepted that, although Mr Croke was not subject to Hydro’s disciplinary processes and could, within reason, choose his own time to attend work, in practice he attended during normal working hours.   Mr Croke was provided with the IT equipment necessary.   He received neither holiday pay nor sick pay but was subject to Mr Vine’s overall direction when working at Hydro.   Mr Croke was an experienced engineer operating on a contract where he was expected principally to be self managed, but was still working in accordance with Mr Vine’s general direction.   

12.   During the period Mr Croke worked at Hydro he was identified by name in internal documents and described as a contractor.   He was interviewed personally before his company was offered the work through Huxley and his personal details were contained in the temporary work/contract form.   He was given a security swipe card to record his presence at Hydro.

13.     Mr Croke, in his complaint to the ET, asserted that he had suffered detriment as someone who had made a protected interest disclosure.   The protected disclosure alleged was raising concerns with Mr Vine that Hydro had failed, or were failing, or were likely to fail, to comply with a legal obligation to Aston Martin.   He complained that the detriment he suffered was the termination of his service contract on the basis that he had made a protected disclosure.

The relevant statutory provisions
14.        Section 230 of the Employment Rights Act 1996 defines employees and workers for the purposes of the 1996 Act.   It provides as follows:
“1.    In this Act employee means an individual who has entered into or works under a contract of employment
2.   In this Act, “contract of employment” means a contract of service or apprenticeship whether express or implied and whether oral or in writing
3.   In this Act “worker” …means an individual who has entered into or works under…
(a)  a contract of employment or
(b)  any other contract whether express or implied and…whether oral or in writing whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession on undertaking carried on by the individual
and any reference to a worker’s contract shall be construed accordingly.
4.  In this Act “employer” in relation to an employee or worker means the person by whom the employee or worker is employed.
5.  In this Act “employment” –
(a)  in relation to an employee means…employment under a contract of employment and
(b)  in relation to a worker means employment under his contract
and “employed” shall be construed accordingly.
6.	This section has effect subject to sections 43(K) and 47(B)(3).
Section 43(K) of the 1996 Act provides:
“1.  For the purposes of this part “worker” includes an individual who is not a worker as defined by section 230(3) but who –
(a)  works or worked for a person in circumstances in which – 
(i)  he is or was introduced or supplied to do that work by a third person and
(ii)  the terms on which he is or was engaged to do the work are or were in practice substantially determined not by him but by the person for whom he works or worked, by the third person or by both of them,…
(2) For the purposes of this Part “employer” includes-
(a) in relation to a worker falling within paragraph (a) of subsection (1), the person who substantially determines or determined the terms on which he is or was engaged”

The tribunal’s reasoning
15.     The tribunal first considered section 230.   Mr Croke had not asserted that he was an employee within the meaning of section 230(1) but did assert that he came within the definition of worker within section 230(3)(B).   The ET rejected that assertion.   There was no contract between Mr Croke and Hydro.   There were back to back contracts between, respectively, Amerstar and Huxley, and Huxley and Hydro.   The tribunal referred to the authority of Hewlett Packard Ltd v O’Murphy [2002] IRLR 4.   It concluded that the position of Mr Croke was less like a worker than that of Mr O’Murphy.   Mr Croke was not, unlike Mr O’Murphy, subject to internal disciplinary procedures.   Further, the contractual entitlement under the present arrangement for Amerstar to substitute another consultant was not suggested to be a sham and was freely negotiated.   The tribunal concluded that the contractual position could be distinguished from that which existed in the case of Roberts v Redrow Homes (North West) Ltd [2004] IRLR 704.  

16.     The ET went on to consider section 43(K).   It said as follows:
“32….section 43(K)(i)(a) is clearly intended to protect an individual whose services are provided to an end user by an agency….
33.  The extension of the protection provided by section 43(K) extends that protection only to an individual.   The tribunal is satisfied that had Huxley provided the claimant to Hydro as an individual the claimant would have fallen within the definition of section 43(K). The section is intended to protect agency workers provided in just such circumstances. Such workers might not necessarily fulfil the requirements of section 230 as they would not be contracting personally with the end user.
34.  The claimant chose to have a limited company as the vehicle through which his services were provided.   He secured tax benefits from that choice.   He was perfectly entitled to do so.   As a consequence there were, in effect, four parties to the existing arrangements.   The claimant has his contractual arrangement with Amerstar.   Amerstar provided him with his income with attendant beneficial tax advantages.   Amerstar chose to enter a contract with Huxley and Huxley in turn chose to enter a contract with Hydro.
35.  In effect the claimant is now trying to shed the protective shell provided by Amerstar and to assert that, despite appearances to the contrary, he was acting as an individual and not through the agency of his company.   The claimant was not supplied as an individual by Huxley to do work for Hydro.   The claimant cannot claim that he was provided as an individual to Hydro by Amerstar because there was no contract between Amerstar and Hydro.   Accordingly he cannot avail himself of the protection of 43(K)(a)(ii).
36.  It follows that, although whilst the claimant was at Hydro’s premises he came under Hydro’s general direction, he did not arrive there in circumstances covered by section 43(K)(1)(a).   Accordingly…the tribunal has no jurisdiction to hear his claim which is dismissed.”      

Submissions
Section 43(K)
17.     This issue has attracted the bulk of argument and submissions because, if the appellant is correct then that is determinative of the appeal and the correctness or otherwise of the ET’s decision on section 230 falls away.

The appellant’s submissions -“introduction”
18.     Mr Devonshire contends that, on a proper construction of section 43(K)(1), the appellant did fall within the extended definition of worker provided for by this section.   He says that Mr Croke “worked for” a person – Hydro -, was introduced or supplied to do that work by a third party (Huxley or Amerstar) and, in practice, the terms on which he was engaged to do that work were substantially determined by Hydro and/or by Huxley.   

19.     He says that the ET found that Mr Croke worked for Hydro, that the terms on which he was engaged to do work were in practice substantially determined not by him but by Hydro and/or Huxley.   He points out that, in paragraph 33, the ET concluded that if Mr Croke as an individual had been introduced or supplied to Hydro by Huxley he would have fallen within the definition of section 43(K).   What prevented his satisfying that requirement of the section was that the ET concluded that Huxley did not supply Mr Croke, but supplied Amerstar, the company by whom Mr Croke was employed.

20.     In the course of the argument it became apparent that Mr Devonshire was contending that the ET had erred in law by failing to consider whether Huxley had “introduced” Mr Croke to Hydro so that this element of section 43K was satisfied regardless of whether Huxley “supplied” Mr Croke to Hydro.   Mr Bowers objected to him raising this argument.   He said it was not alluded to in the grounds of appeal.   We were persuaded by Mr Devonshire that it was alluded to although it was not it any way elaborated upon either in the grounds of appeal or in his extensive skeleton argument.   We indicated to Mr Bowers that if he wished an adjournment in order to prepare an argument to meet this point we would be sympathetic but he decided that he did not require any such adjournment.   

21.     Mr Devonshire invited us to conclude that the ET had erred in law by failing to consider this aspect at all.   Further he submitted that we were in a position to make a decision on this issue because the ET had heard sufficient evidence and had made findings of fact which pointed inexorably towards a conclusion that Huxley had introduced Mr Croke.   In particular he relied upon paragraphs 13 to 15 of the ET’s decision which read:
“13.  In January 2003 the claimant sent his general CV to Huxley.    
14.  In June/July 2003 the second respondent (Hydro) identified the need for five manufacturing engineers and requested Huxley to identify possible candidates.   The claimant provided an up to date CV.   A copy of that CV was sent to Hydro by Huxley.
15.   The claimant attended a working interview on 23 July and was offered work.”

Mr Devonshire says that it is plain from those findings of fact that Huxley introduced Mr Croke the individual, not Amerstar the company.

The respondent’s submission on “introduction

22.     Mr Bowers said that the word “introduced” should be construed in its statutory context that is to say introduced “to do the work” and not at large.   He indicated that it must mean something more than simply passing on a CV. He said that if Mr Devonshire’s point was a good one we should remit it to the ET for findings of fact to be made and applied. 

Conclusion on “introduction”  

23.     In our judgment the ET did err in law. It failed to consider at all a relevant aspect of the case, namely, whether, regardless of whether Huxley supplied Mr Croke the individual or Amerstar the corporate vehicle, Huxley, nonetheless, introduced Mr Croke the individual to Hydro as a potential individual to do the work, albeit subsequently supplied through the corporate vehicle Amerstar.   We are further persuaded that the ET made all the relevant findings of fact on this issue and, having done so, that it is plain that Huxley did “introduce” Mr Croke to do that work.   This was not simply Huxley forwarding a CV on spec.   Huxley already had Mr Croke’s CV on its files.   Hydro made a specific request for potential candidates to perform work of a particular kind.   Huxley considered this and identified Mr Croke as a potential individual to do that work.   Mr Croke, with a view to being put forward by Huxley to do the work, supplied an up to date CV.   That CV was sent by Huxley to Hydro.   It was Mr Croke’s individual CV not a document from Amerstar offering to provide his services.   In consequence of that, Mr Croke, the individual, attended an interview with Hydro and following that he was offered the work.   Thereafter Hydro and Huxley agreed that the form of the arrangement would be that Mr Croke would be supplied through the corporate vehicle Amerstar.   

24.     Accordingly, we have decided that Mr Croke was introduced to do that work by Huxley.   It follows that, as the ET found that all the other statutory conditions for Mr Croke to be a worker under section 43K were satisfied, this conclusion means that the appeal on this issue must succeed.   We go on, however, to consider the other elements of the appeal.

Was Mr Croke supplied by Huxley?
Mr Devonshire’s submissions
25.   Mr Devonshire says that nothing in the language of section 43(K) precludes its application where the individual worker supplies his labour through his own limited company or restricts it to situations where there is a direct contractual chain between the individual and the supplier/introducer. In effect he says that the ET erred in law in limiting its consideration to the formal contractual position. Had it considered the underlying realities it must have concluded that Mr Croke did the work for the end user, he was, in fact, supplied to do it for the end user pursuant to a contract between Huxley and the end user which named him as the consultant. Accordingly he says had the ET directed itself properly it could not but conclude that he was supplied to do the work for the end user by Huxley, the party which had the contractual obligation to Hydro to supply someone to perform the services.

26.     Mr Devonshire seeks to support this argument by citing, by way of analogy, a Court of Appeal authority which is concerned with the Disability Discrimination Act 1995.   Section 12(1) of that Act, prior to its repeal on 1 October 2004, made it “unlawful for a principal in relation to contract work to discriminate against a disabled person…”.   Sub-section (3) applied the provisions of part 2 of the Act “to any principal in relation to contract work, as if he were, or would be, the employer of the contract worker or as if any contract worker supplied to do work for him were an employee of his.”

27.     The relevant definitions were contained in section 12(6) and provide as follows:
“Principal means a person (A) who makes work available for doing by individuals who are employed by another person who supplies them under a contract made with A, contract work means work so made available and contract worker means any individual who is supplied to the principal under such a contract.”

28.     Mr Devonshire states that, at first blush, those provisions are more restrictive than section 43(K) in that they appear to suggest a tri-partite relationship between the individual, the supplier and the principal A.   He draws our attention to the Court of Appeal decision in MHC Consulting Services Ltd v Tansell [2000] ICR 789 and, in particular, the following passages from the judgment of the Court given by Mummery LJ.   He said that whilst section 12:
“Clearly covers the standard case in which…a person makes…work available for doing by individuals employed by [an]…agency” (797E)…[it is] also reasonably capable of applying to the less common case in which an extra contract is inserted, so that there is no direct contract between the person making the work available and the employer of the individual supposed to do that work…It is true that the contract with Abbey life was made by MHC and not by Intelligents.   But that makes no difference.    The statutory definition only requires the supply of the individual to be “under a contract made with A”.    It does not expressly stipulate who is to be the party who contracts with A.   It stipulates that the employer should supply the individual to do the work.   Intelligents did that.   The supply of Mr Tansell to work for Abbey Life could only have been done by Intelligents as it was his employer….(797G to 798A)…This result does not involve any unconstitutional border crossing by the court.   It is achieved by a conventional process of legislation.   The normal meaning of the language of the section is capable of covering this case as well as the standard case.   An interpretation which applies the section to the less common case, as well as to the standard case, is more consistent with the object of the section and of the Act of 1995 than an interpretation which does not do so.   In a number of authorities the appellate courts have stressed the importance of giving the wide ranging provisions of the discrimination legislation a generous interpretation.   Waite LJ set out a valuable exposition of the governing principles in Jones v Tower Boot Co Ltd[ 1997] ICR see also Harrods Ltd v Remick [1998] ICR 156…(798 C to D).
Viewed in that context Abbey Life’s argument boils down to this: the difference between protection from discrimination and no protection in this case turns on the number of contracts made for the supply of Mr Tansell to Abbey Life.   If he was supplied by Intelligents direct to Abbey Life then section 12 applies.   But if he was supplied by Intelligents to Abbey Life via MHC section 12 does not apply.   The particular contractual arrangements do differ from the standard case as to parties and number.   But for the employee the realities of life in the work place remain the same in each case…The end user is the same.   In these circumstances it is more probable that Parliament intended to confer than to deny protection from discrimination in cases where the supply of the employee was made by his company to the principal through an employment agency rather than direct to the principal.”   798G and H.

29.     Mr Devonshire argues that the Tansell case is relevant to our considerations as it identifies an approach to construing a statute by which the court seeks, if it properly can consistent with the language of the legislation, to achieve the object of the legislation to give protection in certain circumstances.   He seeks to support this contention by reference to the Court of Appeal decision in Woodward v Abbey National plc [2006] EWCA Civ 822.    That case concerned protection of a worker under the same “whistle blowing” provisions as apply here.   In that case it applied in this context principles which the House of Lords identified as applying to cases of discrimination under the sex discrimination, race relations and disability discrimination Acts.   (Rhys-Harper v Relaxion Group plc [2003] IRLR 484 HL).    In particular Mr Devonshire relied on the following passage in paragraph 59 of the leading judgment of Lord Justice Ward:
“First, the context is not different.   Victimisation is established by showing inter alia the discrimination of the employee by “subjecting him to any other detriment”.   See section 6(2) of the 1975 Act and section 4(2) of the 1976 and 1995 Acts.    Under section 47(B) of the ERA a worker likewise has the right “not to be subjected to any detriment”.   Although the language and the framework might be slightly different, it seems to me that the four acts are dealing with the same concept, namely, protecting the employee from detriment being done to him in retaliation for his or her sex, race, disability or whistle blowing…”

30.      Mr Bowers suggests that we should not entertain an argument that the case of Tansell is relevant by way of analogy because it introduces a new argument at the appellate stage.   We reject that contention.    It is right to say that Tansell was not referred to as an authority before the ET.   There is a clear difference, in our judgment, between raising a new argument on the and renewing the argument before the ET but relying in support upon a particular authority by way of analogy.   

31.     Mr Bowers, moreover, says that Tansell is only of limited relevance.   It concerns the construction of a different statute couched in different terms.   Further, he points out that the issue in Tansell was the true construction of the phrase in section 12(6) “under a contract made with A”.

32.     The point Mr Bowers makes is that, under the DDA scheme, the proper construction of the words “under a contract made with A” did not require the contract with A to be made by the person who employed the individual and who supplied him to the party which made the contract with A.   It was sufficient that the individual was employed by another person who supplied him by reason of a contract made between an intermediary and A.

33.     Thus, Mr Bowers says all that can be said of Tansell is that individual statutes have to be construed in accordance with their terms.   The terms of section 43(K) are not replicated in the DDA.   Apart from the general point that they should be construed in accordance with their terms, there is no real assistance to be gained by looking overly closely at cases arising out of different pieces of legislation. Whilst it might be odd to conclude that a person may have been protected under the DDA who is not protected under Part IVA of the 1996 Act, if that is the consequence of the terms of that Act applied to a situation which, as the ET pointed out, Mr Croke chose to construct for his own good reasons then so be it.   Mr Bowers relies on the cautionary words of HHJ Peter Clark in the case of Dr R. Kuzel v Roche Products Ltd.   That case concerned whether the approach which the courts have adopted to the burden of proof in cases of discrimination on grounds of sex, race, disability, religion and sexual orientation can be grafted on to the provisions of the 1996 Act under which protected disclosure protection is provided.   In paragraph 41 Judge Clark said:
“In our judgment there is a danger in taking a broad view that because the protection afforded to “whistle blowers” is protection against a form of discrimination (more particularly we think victimisation) the statutory regime applied to those unlawfully discriminated against can simply be grafted on to the provisions of the ERA under which the protected disclosure protection is provided.”

Whilst we agree with Mr Bowers that one has to be cautious before simply transplanting an approach appropriate to one set of legislative provisions to a wholly different set of legislative provisions we do not agree that this prevents our recognising, as the Court of Appeal did in Tansell and in Woodward, that where statutory provisions are explicitly for the purpose of providing protection from discrimination or victimisation it is appropriate to construe those provisions so far as one properly can to provide protection rather than deny it. 

Mr Bowers’ substantive submissions
34.      Mr Bowers says that the language of section 43(K)(1)(a) is clear and does not encompass the present situation where Mr Croke is genuinely self employed operating through his own corporate entity as opposed to providing himself.   He says that the sub-section raises four questions:

(a)  For whom did C work?     
(b)  Was he introduced/supplied to do that work by a third person, if so, by whom?
(c)  Were the terms on which C was engaged to do the work determined by him, i.e., C? In which case he does not fall within the section.
(d)  If not, were the terms determined (1) by the person for whom he works or (2) by a third party or (3) both of them in which case he does fall within the section?

35.     Mr Bowers primarily submits that the answer to question (a) is that Mr Croke “worked for Amerstar”.   He worked for Amerstar under contract with them.  Mr Bowers contends that it follows from the answer to (a): that the answer to question (b) is that Mr Croke was not introduced or supplied to Amerstar by a third person, Mr Croke himself formed the company two years previously, that the answer to (c) is that the terms on which Mr Croke was engaged to do the work were determined by him because he was the only person involved in formulating the terms on which he was engaged to perform work for Amerstar, and that question (d) is redundant.

36.     We reject this primary contention of Mr Bowers.   The ET made findings in paragraph 33 which are inconsistent with it.   They concluded that, had Huxley provided the claimant to Hydro as an individual he would have fallen within the definition of section 43(K).   This necessarily involved a conclusion that Mr Croke “worked for” Hydro.   There is no cross appeal against this conclusion.   

37.     In any event the basis of Mr Bowers’ contention is that section 43(K) equates “working for” with being employed by.   However, it is the purpose of section 43(K) to extend the relevant rights under the 1996 Act beyond the statutory definition of employee provided for by section 230.   On any realistic view of the facts in this case it is, in our judgment, plain that Mr Croke did work for Hydro.

38.     Mr Bowers makes secondary submissions on the assumption that Mr Croke worked for Hydro.   He says that Mr Croke was not supplied to Hydro by a third person, Huxley, but that as a matter of contract, Huxley supplied Amerstar, not Mr Croke. He says that the ET did not misdirect itself in so finding.

Our conclusions on this point
39.     In our judgment this is the crucial part of this argument.   The tribunal concluded that because Huxley, by its contract with Hydro, provided the service provider, Amerstar, to Hydro to provide “the services” then Huxley did not supply Mr Croke to do that work and accordingly Mr Croke did not fall within section 43(K)(1)(a).

40.    In our judgment the starting point is the contract between Huxley and Hydro, the contractual vehicle by which any supplying by Huxley to Hydro for the purpose of Hydro’s work being done was achieved. Under it, Huxley contracted to provide “the service provider” to Hydro and represented that “the service provider” was contractually engaged by Huxley under a contract for services. “The service provider” was, however, defined in the contract by reference to the fact that it employs “the consultant,” identified as Mr Croke. Moreover, although “the service provider” was entitled to substitute Mr Croke under a genuine agreement, it could do so only in circumstances in which both Huxley and Hydro had “a reasonable veto”. In fact, the question in this case only arose because Mr. Croke was doing the work and so any right to substitute him had not been exercised. 

41.     In our judgment, adopting the purposive approach referred to in Tansell, Mr Devonshire  is correct in his submission that the ET misdirected themselves in concluding that Mr Croke was not supplied to do that work by Huxley.   The ET concluded that Mr Croke “worked for” Hydro by reference to the realities rather than the strict contractual position. Adopting that approach to the question, who “supplied” Mr Croke to Hydro to do the work, the correct answer, in our judgment, is that it was Huxley. He was the consultant named in the schedule as the employee of “the service provider” whom Huxley was agreeing would provide the services and he was the one who was supplied to the end user to perform the work and for whose work the end user paid Huxley.

Mr Bowers’ further argument
42.     Mr Bowers sought to argue that, even if Mr Croke was introduced or supplied to do the work which he performed for Hydro by a third person, Huxley, and the terms on which he was engaged to do the work were, in practice, substantially determined not by him but by the person for whom he worked, or by Huxley, the third person, or by both of them, nonetheless, for the purposes of this part of the 1996 Act, by virtue of section 43K2 “the employer” was the person who substantially determined the terms on which he was engaged.   Mr Bowers argues that the identity of that person was Huxley because the contractual relations, between Huxley and Hydro on the one hand, and Huxley and Amerstar on the other, were on the standard terms of Huxley with only certain individual points of detail the subject of individual negotiation between Huxley and, respectively, Amerstar and Hydro. 

43.     In our judgment there is a fatal difficulty in Mr Bowers’ way.   This is that the ET concluded that, but for the interposition of Amerstar, Mr Croke would have been within the statutory definition of “worker”.   Thus it has decided, as a matter of fact, that Mr Croke satisfied section 43K(1)(a)(ii) that is that Hydro would have been the “employer” had it concluded that Mr Croke was a “worker”.   There is no cross appeal or respondent’s answer taking issue with that conclusion.   In our judgment, therefore, this argument is not open to him.    

44.     One of the matters which did give us some concern was the passage from Lord Justice Mummery’s judgment in Tansell already referred to namely:
“It stipulates that the employer should supply the individual to do the work.   Intelligents did that.   The supply of Mr Tansell to work for Abbey Life could only have been done by Intelligents, as it was his employer.”  (At 798A).

On one reading of that passage it might be said that Lord Justice Mummery was saying that only the corporate vehicle could supply the individual to the end user.   We are satisfied, however, that that is not the case.  Mummery LJ was dealing with a specific statutory provision which required the person who employed the individual to supply him.   43K(1) makes no reference to who employs the individual supplied and so what Lord Justice Mummery said in that case has no general application but relates only to the particular statutory provision with which he was concerned.

45.     Accordingly, we uphold the appeal in relation to the “supply” issue as well as on the “introduction” issue.

Section 230
46.     It was common ground that there was no express contract between Mr Croke and Hydro under which he performed personally services for Hydro.   Accordingly Mr Croke was a worker pursuant to section 230(3)(B) of the 1996 Act, if at all, only on the basis of an implied contract.   

47.     The ET dealt with this matter at paragraph 30 of its reasons.   It was, however, aware of the fact that it was being argued on behalf of Mr Croke that, because Hydro had day to day control over Mr Croke, an implied contract of employment had come to exist through the conduct of the parties.   It referred to this argument not only in paragraph 2 but also in paragraph 7 and paragraph 28.   At paragraph 30 it considered the question whether there was any contract both on the basis of the documentation and on the basis of the facts which it had found, including issues such as substitution and what happened in practice, concerning the degree and extent of control which Hydro had exerted over him.   In our judgment there is nothing to suggest that the ET failed to answer the question whether there was an implied contract between Hydro and Mr Croke.   It concluded that there was not.   On the evidence it was entitled to come to that conclusion and it cannot be said that the conclusion to which it came was perverse.   

48.     Since the ET’s decision, the EAT, presided over by the President has in James and Greenwich Council UKEAT 0006/06/ZT was given guidance on the circumstances in which a contract may be implied between the worker and end user in circumstances where the worker is supplied through an agency.   We refer particularly to paragraphs 56 to 60 in which it is said that, when the arrangements are genuine and when implemented accurately represented the actual relationship between the parties, as is likely to be the case where there is no pre-existing contract between worker and end user, then it will be a rare case where there will be evidence entitling the tribunal to imply a contract between a worker and the end user.   If any such contract is to be inferred there must, subsequent to the relationship commencing, be some words or conduct which entitle the tribunal to conclude that the agency arrangements no longer dictate or adequately reflect how the work is actually being performed and that the reality of the relationship is only consistent with the implication of the contract.   It will be necessary to show that the worker is working not pursuant to the agency arrangements but because of mutual obligations binding worker and end user which are incompatible with those arrangements. 
 
49.     In our judgment there is nothing in that case which encourages a belief that the tribunal in the present case was perverse in its conclusion.   On the contrary, it underscores the fact that, in the present circumstances, there was little or no room for implication of a contract between Mr Croke and Hydro – the end user.   Accordingly, we dismiss this element of the appeal.