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Franks v. (1) Reuters Ltd (2) First resort Employment Ltd


Court of Appeal

Appeal by the applicant ('F') from a decision of the Employment Appeal Tribunal dismissing F's appeal from an Employment Tribunal's decision that he was not an employee of either the first respondent ('Reuters') or the second respondent employment agency ('First Resort'). F was placed by First Resort with Reuters as a driver on a temporary placement in 1993. After six months he was offered a full time position and in 1998 was redeployed to a permanent position on the help desk until he was dismissed in 1999. Throughout his employment he was paid by First Resort. He contended that he was an employee of Reuters within the meaning of s.230 Employment Rights Act 1996 and made a complaint to an Employment Tribunal in respect of unfair dismissal, redundancy and breach of contract. The Employment Tribunal dismissed his complaint on the basis that there was no mutuality of obligation between the parties (Carmichael v National Power plc (1999) 1 WLR 2042 applied). That decision was upheld by the Employment Appeal Tribunal.
HELD: (1) The Employment Tribunal had not fully applied the judgment of the House of Lords in Carmichael (supra). It had merely focused upon the concept of mutuality of obligation. Having found that there was no such obligation, it concluded that there was consequently no contract of service between the parties. That was an error. The Employment Tribunal ought to have considered all the facts, including what was said and done, as well as relevant documentation, and made a determination as to whether there was an implied contract of service between the parties. Unless and until the Employment Tribunal had conducted that exercise and obtained an overall picture of the work relationships between the parties, it was not possible (in many cases) for it to reach an informed and sound conclusion as to whether there was mutuality of obligation in the form of an express or implied contract of service. (2) Also, rather unusually, the applicant in the present case had worked for Reuters for over five years. Whilst a person did not become an employee simply through length of service, the period of time in the present case was such that it was capable of creating an implied contractual relationship. In that respect the Employment Tribunal had erred.
Appeal allowed. Remitted to the Employment Tribunal.

LTL 10/4/2003,[2003] ICR 1166,[2003] IRLR 423,(2003) 100(25) LSG 45,(2003) 147 SJLB 474.

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