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TA N F I E L D C H A M B E R S
EMPLOYMENT GROUP BULLETIN
Already a significant player in the London employment law bar, Tanfield Employment Group
continues to expand. We are delighted to welcome Sarah Stanzel and Laura Robinson, who,
together with Gemma de Cordova, have written articles for this edition of the Bulletin. In the
case of GAB Robins v Triggs [2008] IRLR 317 referred to in the first article, Sarah and Laura
acted for the Claimant in her employment and personal injury claims, respectively.
We also welcome Iain Mitchell QC, of the Scottish Bar, who joins Tanfield as an associate
tenant. Described by the directories as a “genuine blue-skies thinker”, he is a member of the
EHRC panel of Advocates and his varied practice includes some significant employment
cases.
Peter Linstead
GUIDANCE ON DAMAGES
Quantifying your clients’ exposure if they lose, or their likely winnings, is one of the most
important aspects of an employment lawyer’s job. The last 12 months have seen some
reductions in compensation limits due to a fall in the Retail Price Index, and a departure from
the established practice of only altering statutory limits on 1st February. In addition, there
have been several recent decisions affecting the way compensation is assessed in
discrimination and unfair dismissal claims. Sarah Stanzel considers the recent developments.
UNFAIR DISMISSAL
As far as the basic award for unfair dismissal is concerned, on 1 October 2009, instead of 1 February
2010, there was a ‘one off’ increase of the limit on a week’s pay from £350 to £380. The maximum
compensatory award dropped on 1 February 2010 from £66,200 to £65,300. There has also been an
important recent decision on contributory fault in Swallow Security Services Ltd v Millicent [2009]
UKEAT/0297/08. The EAT held that if the tribunal find any conduct on the part of the claimant that
might be regarded as blameworthy, the tribunal is bound to consider contributory fault, whether or
not the respondent raised it.
ISSUE NO 7: Summer 2010
GUIDANCE ON
DAMAGES
WHERE ARE WE WITH
EMPLOYMENT STATUS?
CONSTRUCTIVE DISMISSAL
In GAB Robins (UK) Ltd v Triggs [2008] IRLR 317 the Court of Appeal made a surprising decision
on damages where the employee says that the repudiatory conduct (in this case bullying) caused the
illness which was responsible for her ongoing loss of earnings. This loss cannot be recovered in the
Employment Tribunal as it is not regarded as loss flowing from the dismissal. The claimant had to
pursue a claim for personal injury in the civil courts instead.
continued overleaf
W W W. T A N F I E L D C H A M B E R S . C O . U K

Sarah Stanzel
Called in 1999, Sarah practises exclusively
in employment law and regularly appears
before the ET and EAT in a range of matters
for both Claimants and Respondents. She
has also appeared in the Court of Appeal
including acting as junior counsel for the
claimant in GAB Robins v Triggs [2008]
IRLR 317. She increasingly receives instructions in cases with a
cross-border or international element. Her languages include
German, French, Italian, Spanish and Portuguese and she regularly
advises clients both in the UK and abroad in their respective
language, having undertaken work placements in law firms in
Frankfurt, Paris, Rome, Madrid and Lisbon. She has recently
travelled abroad to lecture before the Italian and Spanish
Employment Lawyers Associations and at the Annual Conference of
the European Employment Lawyers Association.
RECENT MITIGATION DECISIONS
In Islam Channel Ltd v Ridley [2009] All ER (D) 89 (Aug), the
claimant obtained a freelance job at first better paid than her previous
job but by the hearing it was less well paid, total earnings from
dismissal to hearing being better than in the old job. The EAT held that
past earnings should not be set off against future loss due to the
insecure nature of freelance work. In Aegon UK Corp Services Ltd v
Roberts [2009] IRLR 1042, the Court of Appeal held that for the
purpose of assessing the level of remuneration (in old and new job),
pension is part of the remuneration package. In Stuart Peters Ltd v
Bell [2009] IRLR 941, the EAT held that the Norton Tool principle
applies so that in both direct and constructive dismissal cases, missing
notice pay must be awarded in full whether or not the claimant had
alternative earnings during the notice period.
our authors
TC
WHERE ARE WE WITH EM
Employment status could not be more complicated. A claimant m
dismissal claim, a differently defined “employee” or “contract w
working time claim under the Working Time Regulations, and a
disclosure claim. Laura Robinson and Gemma de Cordova provid
the implications.
This article considers the practical implications where status is disputed,
then the areas visited most often by the case law: attempts to avoid
employment status through sham agreements, agency worker cases and
contract worker status under the anti-discrimination legislation.
PRELIMINARY HEARINGS ON STATUS?
DISCRIMINATION
Pecuniary loss in discrimination cases is based on putting the claimant
into the position he would have been in had the act of discrimination
not occurred. In Chagger v Abbey National plc and another [2010]
IRLR 47, the Court of Appeal confirmed that this meant the ET had to
assess the likelihood that the claimant would have been dismissed in
any event. That meant making a reduction proportionate to the chance
that the claimant would have been dismissed if redundancy had not
been discriminatory (like a Polkey reduction). However, somewhat
surprisingly, the Court held that future loss was not necessarily limited
to the period during which the claimant would have remained
employed had he not been the subject of unlawful discrimination. This
is because if he had left the employment voluntarily, he would not have
chosen a position with no income and no stable platform from which to
find other work. The Court of Appeal also stated that where employees
suffer a stigma on the labour market as a result of having brought a
discrimination complaint, this can be taken into account when
assessing how long it will take them to find another job.
As far as injury to feelings is concerned, the Vento scale was recently
updated in line with inflation in Da’Bell v NSPCC [2010] IRLR 19, EAT.
The lowest band of awards now runs up to £6,000, the middle band
from £6,000 to £18,000 and the highest band from £18,000 to £30,000.
Meanwhile, in Taylor v XLN Telecom Ltd [2010] IRLR 499, the EAT
overturned the ET’s decision not to award compensation in a
victimisation claim because the claimant was unaware of any
discriminatory intent. They said that both injury to health and injury to
feelings should be compensated as they flowed from the employer’s
actions, even if the claimant did not know the act was discriminatory.
SARAH STANZEL
A useful starting point is the very recent guidance on preliminary
hearings in Leeds City Council v Woodhouse & Another [2010] EWCA
Civ 40, where the Court of Appeal were considering whether the claimant
was a contract worker within section 7 RRA 1 following a PHR on that
issue in the tribunal. They observed that such a preliminary hearing
involved the tribunal making extensive findings of fact. Two concerns
were raised. Firstly, the scope of the evidence potentially relevant to the
section 7 issue may not be immediately obvious because the tribunal has
to examine the terms of the contract and how the contract operated in
practice. It would therefore be preferable for the issue to be heard as part
of the entire case. Secondly, as the section 7 issue is largely one of fact it
should be determined by a full tribunal and not a judge alone.
Arguably the concerns raised by the Court of Appeal apply to all cases
where employment status is in issue. Extensive evidence must be heard in
‘sham’ cases, ‘agency worker’ cases, and ‘contract worker’ cases under the
discrimination legislation, to determine the true relationship between the
parties.
“... if strict construction is applied “armies of lawyers will simply
place substitution clauses, or clauses denying any obligation to
accept or provide work in employment contracts, as a matter of
form, even where such terms do not begin to reflect the real
relationship”“
The danger of a Tribunal being too quick to determine the strength of an
agency worker’s claim had already been identified by the EAT in Evans v
Parasol Ltd & Ors. (Bean J) 23/7/2009. In light of the complexity of the
law relating to agency workers and the limited documentation available
pre-disclosure, Bean J considered that it would be a bold employment
judge who would strike out a claim on the basis of status at an early stage.
“
i
t
t
1Race Relations Act 1976
2Snook v London and West Riding Investments Limited
W W W. TA N F I E L D C H A M B E R S . C O . U K

Gemma de Cordova
Gemma joined Tanfield as a third six pupil in
2008 and since becoming a tenant in 2009 has
become a key junior member in the
Employment Group. Gemma has experience of
representing a broad range of clients in the
Employment Tribunal including insurance
backed claimants, small businesses and local
authorities. She is also frequently instructed to undertake advisory
work and drafting. To date, Gemma’s participation in judicial
mediations has resulted in a 100% success rate. She is known for
staying calm under pressure and clients appreciate her composed,
thorough and common sense approach to her work. When not at work
or preparing for work Gemma sings in a choir and also enjoys
appearing in courts of a different kind: practising her netball skills in a
local ‘Speednet’ league.
Laura Robinson
Laura joined Tanfield Chambers in March
2010 from 7 New Square, where she had
developed a thriving practice in
employment law acting for respondents
and claimants. She is particularly noted for
her straightforward and friendly manner
and interacts well with clients. Her varied practice has included
regular appearances in the ET and EAT as well as the provision of
advocacy training and acting as a legal advisor to the Association of
Occupational Health Nurse Practitioners. Laura has provided
advocacy and advisory work for a range of clients including such
diverse entities as public authorities, large companies and a
premiership football club. When she is not working Laura enjoys
reading and eating cake.
PLOYMENT STATUS?
ust fall within the definition of “employee” to bring an unfair
orker” to bring a discrimination claim, “worker” to bring a
special extended definition of “worker” to bring a protected
e a guide to the many recent decisions on status and consider
‘SHAM’ AGREEMENTS
Until recently, the ability of a worker to claim that contractual documents
were really designed to mask an employment relationship was severely
limited by authority saying that it is not a ‘sham’ unless both sides had a
common intention to deceive third parties as to the nature of their
relationship 2 . However, in both the following decisions, the Court of
Appeal overturned EAT decisions expressing reluctance to go behind
written agreements.
Faced with a potentially long and expensive full tribunal hearing...
t may well be more economically viable for Respondents to settle
hese cases early, even in circumstances where it appears that
here is little prospect of the claim against them succeeding.“
In Protectacoat Firthglow Ltd v Szilagyi [2009] IRLR 365 the Court of
Appeal rejected this line of authority. Protectacoat, relying on two written
agreements, asserted that Mr Szilagyi was an independent contractor. Mr
Szilagyi claimed that the true working arrangements differed from the
documentation. In finding he was an employee, Smith LJ stated there was
no need for an intention to deceive third parties. She contrasted an
agreement between commercial parties, where usually both parties were
in a position to require that terms reflect the nature of the agreement,
with the field of work where sometimes only one party dictates the terms:
“[t]he question is always what the true legal relationship is between the
parties... if it is asserted by either party... that the document does not
represent or describe the true relationship, the court or tribunal has to
decide what the true relationship is”.
Autoclenz Ltd v Belcher & ors [2010] IRLR 70 involved a group of car
valeters who claimed they were ‘employees’ or ‘workers’ but worked
under agreements stating they were “subcontractors” with the right to
substitute other workers and having no obligation to work and no
guarantee of work. The Court of Appeal found them to be employees,
applying Protectacoat. Smith LJ suggested that where there is a dispute
the tribunal must examine all relevant evidence including the written
term itself, evidence of how the parties conducted themselves in practice
and what their expectations were. The assessment must be carried out at
two points: both at inception of the contract and at any later stage where
evidence shows parties have expressly or impliedly varied the agreement.
By contrast with these cases, the Court of Appeal chose to put weight on
the actual wording of the contract in another case involving a tri-partite
relationship between an employment agency, worker and end user.
TRIPARTITE RELATIONSHIPS: EMPLOYED BY
AGENCY?
In Consistent Group v Kalwak [2008] IRLR 505 Rimer LJ found that
clauses in contracts “solemnly agreed in writing” between an agency and
immigrant workers negatived an employment relationship, even though
the workers argued that they did not reflect the reality of the situation.
However, a differently constituted Court of Appeal in Autoclenz
expressly disapproved of Rimer LJ’s approach, describing it as “not
helpful in all cases”. In addition, in the EAT in Consistent Group, Elias J 3
said that if strict construction is applied “armies of lawyers will simply
place substitution clauses, or clauses denying any obligation to accept or
provide work in employment contracts, as a matter of form, even where
such terms do not begin to reflect the real relationship”.
Hence, although the ‘sham’ argument did not find favour on the particular
facts of Consistent Group, there may yet be agency worker cases in
which an argument that the contracts do not reflect the reality of the
relationship between the parties, and are therefore a sham, would
succeed.
[1967] 23 QB 786 3as he then was
W W W. TA N F I E L D C H A M B E R S . C O . U K

TRIPARTITE RELATIONSHIPS: EMPLOYED BY END
USER?
The law on whether the end user is the employer has been fairly settled
since James v London Borough of Greenwich [2008] EWCA Civ 35.
The issue is generally whether a contract should be implied between
the worker and end user, which under contractual principles means
that it has to be necessary in all the circumstances to imply such a
contract. The court in James concluded that the arrangements
between the parties were all explained by two express contracts (ie
worker/agency and agency/end user) and it was therefore
unnecessary to imply the existence of another contract. In the absence
of any contract, the claimant could not be an employee of the end user
or, for that matter, a worker.
Muschett v H M Prison Service [2010] EWCA Civ 25 considered
other ways of making the end user liable. Mr Muschett was an agency
worker placed with HMPS. The Court of Appeal concluded that Mr
Muschett was not an employee as there was no contract of service and
focussed on whether he satisfied the wider definition of worker for the
purpose of his discrimination claims (section 78 RRA: a contract
“personally to execute any work or labour”). In this context they
investigated whether he was employed under a contract for services
and concluded that he owed no obligation to work for HMPS and could
terminate his engagement at any time. There was therefore no
possibility of an implied contract between HMPS and Mr Muschett and
he was not a worker.
CONTRACT WORKER
Leeds City Council v Woodhouse (supra) indicates that in one area at
least the courts are willing to be flexible to attach liability to an end
user. A worker can bring a discrimination claim against a business
which is not his or her employer as a “contract worker” doing work for
that business but employed by a third party who supplies him or her
under a contract with the principal (eg. section 7 RRA). This provision,
normally reserved for agency workers, had not helped Mr Muschett as
he was not an employee of the agency. However, in Woodhouse it was
held that where the Council had sub-contracted its property
management functions to a company who employed the claimant, he
could bring a claim directly against the Council. It was not necessary to
demonstrate the Council had influence and control over the work and
it was not fatal if the work was being performed both for the company
and the Council.
CONCLUSION
Following James and Muschett it is difficult to envisage in what
circumstances an agency worker could succeed in persuading a
tribunal of the necessity to imply a contract between worker and end
user. Often, they are not employees of the agency either. As a result, as
you might expect, agency workers often remain unprotected from
unfair dismissal. Perhaps less expected, Muschett emphasises that
agency workers may not even be covered by the discrimination
legislation, assuming they are not employed by the agency and
therefore are unable to rely on the ‘contract worker’ provisions. It is
concerning if this sector of the workforce can be discriminated against
with impunity because they fall through the gaps in the legislation.
That said, the suggestion in Woodhouse that these matters should be
left for final hearing may have a strong influence on the way
Respondents choose to handle these cases. Faced with a potentially
long and expensive full tribunal hearing (especially in discrimination
cases) it may well be more economically viable for Respondents to
settle these cases early, even in circumstances where it appears that
there is little prospect of the claim against them succeeding.
employment barristers:
David Berkley QC (1979)
Iain Mitchell QC (1976)
Andrew Thompson* (1969)
Paul Staddon (1976)
David Daly (1979)
Simon Cheves (1980)
Robin Howard (1986)
Christopher Bamford (1987)
Stephen Heath (1992)
Catriona MacLaren (1993)
Peter Linstead (1994)
Martina Murphy (1998)
Sarah Stanzel (1999)
Laura Robinson (2001)
Andrew Sheftel (2004)
Louise Mankau (2005)
Paul Stevenson (2006)
Gemma de Cordova (2006)
Cecily Crampin (2008)
`
* Joint Editor of Harvey on Industrial Relations and Employment Law
clerking team
kevin moore
Kevin Moore has been a barristers’ clerk
for 35 years and joined Chambers in 1999
having previously been senior clerk in a
highly regarded commercial set. He is a
member of the Institute of Barristers’
Clerks.
Kevin is responsible for the overall clerking of Chambers and is
happy to discuss any aspect of the service with clients. His flexible
and pragmatic approach to the job is appreciated by solicitors who
instruct Chambers and has been recognised in the Legal 500.
Kevin is married with 3 grown up children who still manage to be
a drain on resources. In his spare time Kevin is a long suffering
supporter of West Ham United FC.
David Wright
David has been clerking for 10 years in
leading commercial and employment sets.
He qualified as a barristers’ clerk in 2002
and is a member of the Institute of
Barristers’ Clerks.
In 2007, David joined Tanfield Chambers as Principal Employment
and Commercial Clerk where he has put his wealth of experience to
good use. His combination of hard-work, organisation and reliability
has proved a real asset to Chambers. When agreeing fees, David
always strives to remain client focussed and fair.
In his spare time David studies Hapkido (a Korean martial art) and
enjoys playing football and badminton. He is also a bit of a film buff.
LAURA ROBINSON & GEMMA DE CORDOVA
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