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In Lawrie-Blum, which was concerned with the free movement of workers under what was then article 48 of the Treaty, Advocate General Lenz said at para III 2(b) of his opinion that the term worker covers any employed person who is not self-employed. PRE |
The court said at para 17: That concept [ie of worker] must be defined with objective criteria which distinguish the employment relationship by reference to the rights and duties of the persons concerned. PRE |
The essential feature of an employment relationship, however, is that for a certain period of time a person performs services for and under the direction of another person in return for which he receives remuneration. PRE |
In Kurz the court said at para 32 that it was settled case law that the concept of worker has a specific Community meaning and must not be interpreted narrowly. PRE |
The court then repeated the essential feature of the relationship identified in the above passage from Lawrie-Blum. PRE |
In Allonby the court addressed an equal pay claim by a college lecturer who had been dismissed by the college and then re-engaged, ostensibly as a self- employed sub-contractor supplied by an agency. PRE |
For the purposes of article 141(1) of the EC Treaty, the court drew a clear distinction between workers and independent suppliers of services. PRE |
It discussed the concept of worker within the meaning of article 141(1) between paras 62 and 72, which included the following: 62. PRE |
The criterion on which article 141(1) EC is based is the comparability of the work done by workers of each sex: see, to that effect, Defrenne v Sabena (No 2) (Case 149/77) [1978] ECR 1365, 1377, para 22. PRE |
Accordingly, for the purpose of the comparison provided for by article 141(1) EC, only women and men who are workers within the meaning of that article can be taken into consideration. PRE |
63. PRE |
In that connection, it must be pointed out that there is no single definition of worker in Community law: it varies according to the area in which the definition is to be applied: Martinez Sala v Freistaat Bayern (Case C-85/96) [1998] ECRI-2691, 2719, para 31. 64. PRE |
The term worker' within the meaning of article 141(1) EC is not expressly defined in the EC Treaty. PRE |
It is therefore necessary, in order to determine its meaning, to apply the generally recognised principles of interpretation, having regard to its context and to the objectives of the Treaty. PRE |
65. PRE |
According to article 2 EC, the Community is to have as its task to promote, among other things, equality between men and women. PRE |
Article 141(1) EC constitutes a specific expression of the principle of equality for men and women, which forms part of the fundamental principles protected by the Community legal order: see, to that effect, Deutsche Post AG v Sievers (Cases C-270 and 271/97) [2000] ECR I-929, 952, para 57. PRE |
As the court held in Defrenne v Sabena (Case 43/75) [1976] ICR 547, 566, para 12, the principle of equal pay forms part of the foundations of the Community. PRE |
66. PRE |
Accordingly, the term worker used in article 141(1) EC cannot be defined by reference to the legislation of the member states but has a Community meaning. PRE |
Moreover, it cannot be interpreted restrictively. PRE |
67. PRE |
For the purposes of that provision, there must be considered as a worker a person who, for a certain period of time, performs services for and under the direction of another person in return for which he receives remuneration see, in relation to free movement of workers, in particular Lawrie-Blum para 17, and Martinez ... |
68. PRE |
Pursuant to the first paragraph of article 141(2) EC, for the purpose of that article, pay means the ordinary basic or minimum wage or salary and any other consideration, whether in cash or in kind, which the worker receives directly or indirectly, in respect of his employment, from his employer. PRE |
It is clear from that definition that the authors of the Treaty did not intend that the term worker, within the meaning of article 141(1) EC, should include independent providers of services who are not in a relationship of subordination with the person who receives the services (see also, in the context of free moveme... |
69. PRE |
The question whether such a relationship exists must be answered in each particular case having regard to all the factors and circumstances by which the relationship between the parties is characterised. PRE |
70. PRE |
Provided that a person is a worker within the meaning of article 141(1) EC, the nature of his legal relationship with the other party to the employment relationship is of no consequence in regard to the application of that article: ... 71. PRE |
The formal classification of a self-employed person under national law does not exclude the possibility that a person must be classified as a worker within the meaning of article 141(1) EC if his independence is merely notional, thereby disguising an employment relationship within the meaning of that article. PRE |
On the basis of those materials I would accept Mr Davies submission that the Court of Justice draws a clear distinction between those who are, in substance, employed and those who are independent providers of services who are not in a relationship of subordination with the person who receives the services. Ratio |
I see no reason why the same distinction should not be drawn for the purposes of the Regulations between those who are employed and those who are not notionally but genuinely self-employed. Ratio |
In the light of Allonby, there can be no doubt that that would be the correct approach to the near identical definition in section 1(6) of the Equal Pay Act 1970 and must remain the correct approach to the definition of employment in section 83(2) of the EA, which provides, so far as relevant: Employment means (a) empl... |
In my opinion there is nothing in the domestic authorities which requires the court to come to any different conclusion. Ratio |
The problem with some of them is that they do not refer to the jurisprudence of the Court of Justice. Ratio |
However, the most recent decision of the House of Lords does. Ratio |
In Percy v Board of National Mission of the Church of Scotland [2006] 2 AC 28 the House of Lords considered a sex discrimination claim brought by a woman who was a minister of the Church of Scotland. PRE |
The issue was whether she was employed within the meaning of section 82(1) of the SDA 1975. PRE |
The House held that she was. PRE |
Lord Hoffmann dissented on the basis that she was the holder of an office but had no doubt (at para 66) that, if the arrangement had been contractual, it would plainly have been a contract of service. PRE |
Lord Hoffmann said at para 73 that the term workers is a term of art in Community law which was defined by the Court of Justice in the passage from para 17 of Lawrie-Blum quoted at para 24 above. PRE |
Lord Hope of Craighead said much the same at para 126, where he also noted that the same approach was taken in Allonby. PRE |
Baroness Hale of Richmond referred at para 141 to para A[4] of Harvey on Industrial Relations and Employment Law, which stated that: the distinction is between those who work for themselves and those who work for others, regardless of the nature of the contract under which they are employed. PRE |
She then referred at para 143 to the decision of the Court of Appeal in Northern Ireland in Perceval-Price v Department of Economic Development [2000] IRLR 380, where it was held that three full-time judicial office holders, namely a full- time chairman of industrial tribunals, a full-time chairman of social security a... |
In para 145, after quoting the definition of an employment relationship in Lawrie-Blum, Baroness Hale noted that, in giving the judgment of the court in Perceval-Price, Sir Robert Carswell LCJ said that the objective of the relevant EC legislation was to give protection against inequality and discrimination to those wh... |
He also said that the concept of a worker should be construed purposively by reference to this objective. PRE |
Baroness Hale then quoted this extract from the judgment of Sir Robert Carswell: All judges, at whatever level, share certain common characteristics. PRE |
They all must enjoy independence of decision without direction from any source, which the respondents quite rightly defended as an essential part of their work. PRE |
They all need some organisation of their sittings, whether it be prescribed by the president of the industrial tribunals or the court service, or more loosely arranged in collegiate fashion between the judges of a particular court. PRE |
They are all expected to work during defined times and periods, whether they be rigidly laid down or managed by the judges themselves with a greater degree of flexibility. PRE |
They are not free agents to work as and when they choose, as are self-employed persons. PRE |
Their office accordingly partakes of some of the characteristics of employment . . . PRE |
At para 146 Baroness Hale continued: I have quoted those words at length because they illustrate how the essential distinction is, as Harvey says, between the employed and the self-employed. PRE |
The fact that the worker has very considerable freedom and independence in how she performs the duties of her office does not take her outside the definition. PRE |
Judges are servants of the law, in the sense that the law governs all that they do and decide, just as clergy are servants of God, in the sense that God's word, as interpreted in the doctrines of their faith, governs all that they practise, preach and teach. PRE |
This does not mean that they cannot be workers or in the employment of those who decide how their ministry should be put to the service of the Church. PRE |
Some consideration was recently given to the position of part-time judges by this court in OBrien v Ministry of Justice (Note) [2010] UKSC 34, [2010] 4 All ER 62 where the court considered Percy in some detail in a judgment of the court given by Lord Walker. PRE |
At para 25 it referred to the same passage in Lawrie-Blum as having laid down the relevant principle and at para 26 it referred to the speech of Baroness Hale and approved the passage quoted above from the judgment of Sir Robert Carswell in Perceval-Price. PRE |
As I read Percy, it sought to apply the principles identified by the Court of Justice, as indeed did this court in OBrien [2010] 4 All ER 62. Ratio |
The essential questions in each case are therefore those identified in paras 67 and 68 of Allonby [2004] ICR 1328, namely whether, on the one hand, the person concerned performs services for and under the direction of another person in return for which he or she receives remuneration or, on the other hand, he or she is... |
Those are broad questions which depend upon the circumstances of the particular case. Ratio |
They depend upon a detailed consideration of the relationship between the parties. Ratio |
As I see it, that is what Baroness Hale meant when she said that the essential difference is between the employed and the self- employed. Ratio |
The answer will depend upon an analysis of the substance of the matter having regard to all the circumstances of the case. Ratio |
I would not accept the Court of Appeals analysis (at para 21) of Baroness Hales speech in this regard. Ratio |
There have been a number of domestic cases which say that the question is whether the dominant purpose of the contract is the execution of personal work or labour: see eg Quinnen v Hovells [1984] ICR 525, Mirror Group Newspapers Ltd v Gunning [1986] 1 WLR 546, especially per Oliver LJ at 551H and Balcombe LJ at 556H; K... |
Mr Michael Brindle QC also referred on behalf of the respondent to two earlier cases which focus on the question whether a contract is one personally to execute any work or labour: see Tanna v Post Office [1981] ICR 374 and Hugh-Jones v St Johns College, Cambridge [1979] ICR 848. Ratio |
However, none of these cases considered the approach in the decisions of the Court of Justice referred to above. Ratio |
In particular, the cases did not focus on the fact that the employment must be employment under a contract of employment, a contract of apprenticeship or a contract personally to do work. Ratio |
(My emphasis). Ratio |
Given the importance of the EC perspective in construing the legislation, including the Regulations, the cases must now be read in the light of those decisions. Ratio |
They show that it is not sufficient to ask simply whether the contract was a contract personally to do work. Ratio |
They also show that dominant purpose is not the test, or at any rate not the sole test. Ratio |
That is not to say that the question of purpose is irrelevant but the focus is on the contract and relationship between the parties rather than exclusively on purpose. Ratio |
Elias J, sitting as President of the Employment Appeal Tribunal, recognised some of the difficulties in James v Redcats (Brands) Ltd [2007] ICR 1006. PRE |
He discussed the relevance of dominant purpose in this context by reference to the cases at paras 53 to 68. PRE |
At para 59, after quoting from the judgment of Balcombe LJ in Gunning [1986] 1 WLR 546, he said that the dominant purpose test is really an attempt to identify the essential nature of the contract. PRE |
In the context of the case he was considering he posed the question whether it was in essence to be located in the field of dependent work relationships or whether it was in essence a contract between two independent business undertakings. PRE |
At paras 67 and 68, after referring to a number of cases and observing at para 65 that the description of the test as one of identifying the dominant purpose was perhaps not an altogether happy one, he said this: 67. PRE |
An alternative way of putting it may be to say that the courts are seeking to discover whether the obligation for personal service is the dominant feature of the contractual arrangement or not. PRE |
If it is, then the contract lies in the employment field; if it is not - if, for example, the dominant feature of the contract is a particular outcome or objective - and the obligation to provide personal service is an incidental or secondary consideration, it will lie in the business field. PRE |
68. PRE |
This is not to suggest that a tribunal will be in error in failing specifically to apply the dominant purpose or indeed any other test. PRE |
The appropriate classification will in every case depend upon a careful analysis of all the elements of the relationship, as Mr Recorder Underhill QC pointed out in Byrne Bros (Formwork) Ltd v Baird [2002] ICR 667. PRE |
It is a fact sensitive issue, and there is no shortcut to a considered assessment of all relevant factors. PRE |
However, in some cases the application of the dominant purpose test may help tribunals to decide which side of the boundary a particular case lies. PRE |
It is noteworthy that the European cases were not cited in many of the cases, including that before Elias J. In the light of the European cases, dominant purpose cannot be the sole test, although it may well be relevant in arriving at the correct conclusion on the facts of a particular case. Ratio |
After all, if the dominant purpose of the contract is the execution of personal work, it seems likely that the relationship will be, in the words of Allonby [2004] ICR 1328, para 67, a case in which the person concerned performs services for and under the direction of the other party to the contract in return for remun... |
This may not be so however because, although the dominant purpose of the contract may be personal work, it may not be personal work under the direction of the other party to the contract. Ratio |
All will depend upon the applications of the principles in Allonby to the circumstances of the particular case. Ratio |
If the approach in Allonby is applied to a contract between the parties to an arbitration and the arbitrator (or arbitrators), it is in my opinion plain that the arbitrators role is not one of employment under a contract personally to do work. Ratio |
Although an arbitrator may be providing services for the purposes of VAT and he of course receives fees for his work, and although he renders personal services which he cannot delegate, he does not perform those services or earn his fees for and under the direction of the parties as contemplated in para 67 of Allonby. ... |
He is rather in the category of an independent provider of services who is not in a relationship of subordination with the parties who receive his services, as described in para 68. Ratio |
The arbitrator is in critical respects independent of the parties. Ratio |
His functions and duties require him to rise above the partisan interests of the parties and not to act in, or so as to further, the particular interests of either party. Ratio |
As the International Chamber of Commerce (the ICC) puts it, he must determine how to resolve their competing interests. Ratio |
He is in no sense in a position of subordination to the parties; rather the contrary. Ratio |
He is in effect a quasi-judicial adjudicator: K/S Norjarl A/S v Hyundai Heavy Industries Co Ltd [1992] QB 863, 885. Ratio |
In England his role is spelled out in the 1996 Act. Ratio |
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