Employment law

Employee StatusStevedoring & Haulage Services Ltd v Fuller and others (2001) IRLR 627Permanent dock workers took voluntary redundancy terms in 1995.

Their former employer then took them on in January 1996 as casual workers.

A letter offering casual work made it clear that the workers would not be employees but would provide their services on an 'ad hoc and casual basis' with 'no obligation on the part of the company to provide such work for you nor for you to accept any work so offered'.

Thereafter, the dockers worked for the company on many more days than not and did not work for any other employer.

They were engaged directly by the employer and were offered work before other casual labour engaged through an agency.

A rota system ensured that those who said that they were available for work but were not offered it were rewarded.Those who were offered work for which they were not available were penalised.

After working on that basis for three years, the dockers applied to a tribunal for written statements of the particulars of their employment.

A tribunal held that they were employees, not simply working under a series of individual engagements but under an 'over-arching' contract of employment.

Even though the documentation expressly negatived 'mutuality of obligation', the tribunal thought that terms providing for an 'irreducible minimum of obligation on either side' could be implied from the way in which the parties had conducted themselves.

Those implied terms were that the company would offer the workers a reasonable amount of work when it was available, giving them priority over other casuals, and that, in return, the workers would make themselves available for work on at least a reasonable number of occasions.The Employment Appeal Tribunal held that these implied terms reflected the reality of the agreement between the parties, but the Court of Appeal disagreed.

Where the terms on which casual work is offered and accepted expressly negatives mutuality of obligation, there can be no global or over-arching contract of employment.

If there is no contract, one cannot be created by implying terms which water down the effect of the express terms so as to give it sufficient mutuality of obligation to pass the test necessary for establishing a contract of employment.

If there was a contract in the present case, the terms implied by the tribunal could not be incorporated into it.

Neither business efficacy nor necessity required the implication of such terms, which were entirely inconsistent with the supposed contract's express terms.

Accordingly, the workers were not employees and not entitled to written particulars of their employment.

The editor of the IRLR regards this decision as 'a triumph of form over substance', but, with respect, that is perhaps a debatable assertion.

The substance, or reality, does appear to have been that there was no mutuality of obligation.

If there is a view that the policy implications of this decision are undesirable, then it is submitted that the solution is for statutory rights available only to employees to be extended to the broader category of 'workers', rather than to stretch contract law in an implausible way in an attempt to do justice.

By Martin Edwards, Mace & Jones, Liverpool