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STATUS: THE COURT OF APPEAL’S DECISION IN HALAWI V WORLD DUTY FREE [2014] EWCA CIV 1387

Mark Humphreys 

Fashions are a feature of so much in life, and employment law is no exception, where for the moment at least: Status is in vogue. In recent years the appellate courts have considered a range of relationships, and been asked to answer the question: what is the legal characterisation of the claimant’s relationship with the respondent? The question is put more specifically in each case; was the claimant an employee, a worker, an office holder, or truly self-employed as an independent provider of services? But this is merely to particularise the general question: what is the claimant’s status?

The leading cases include: Clyde & Co LLP v Bates van Winkelhof [2014] UKSC 32; President of the Methodist Conference v Preston [2013] UKSC 29; Ministry of Justice v O’Brien [2013] UKSC 6; and Hashwani v Jivraj [2011] UKSC 40, all in the Supreme Court; Quashie v Stringfellow Restaurants Ltd [2013] IRLR 99; and Hospital Medical Group v Westwood [2012] IRLR 834 in the Court of Appeal.

It is easy to see why status is so important. Employment law differentiates between categories of relationship, conferring different rights and obligations upon the parties within each. A worker may bring a complaint of detrimental treatment (short of dismissal) on the ground of having made a protected disclosure under s.47B of the Employment Rights Act 1996 "ERA”, however, only an employee may bring a complaint of dismissal by reason of having made a protected disclosure under s.103A ERA; only employees with the necessary qualifying period can bring claims of unfair dismissal; employees are granted protection from unlawful discrimination under the Equality Act 2010 "EA” but an expansive definition of employee applies, and there is no temporal requirement. It is in this context that the Court of Appeal’s decision in Halawi should be read.

The Factual Background

Mrs. Halawi was seeking to bring a claim of religious discrimination, and to do so had to demonstrate, as a preliminary matter, that she was an employee of the respondent, WDF. The definition of employee in this context is the expanded one found in s.83(2) EA which includes "…employment under…a contract personally to do work…”

WDF operates retail outlets at airports, including beyond the departure gates; an area described, as ‘airside’ in the industry jargon. Mrs. Halawi was a beauty consultant who provided services through an employee-controlled company to a service company, which itself provided management services to cosmetic companies occupying space by permission of WDF. In order to work airside, a special pass issued by the British Airports Authority upon sponsorship by WDF, was required.

In 2011 WDF withdrew Mrs. Halawi’s pass meaning that she was unable to continue her work. This, it was claimed, constituted an act of unlawful discrimination perpetrated by WDF, and so to pursue the claim Mrs. Halawi had to show that she was an employee of WDF.

The Findings of the Court of Appeal

EU law, and in particular the Framework Directive 2000/78, provides the provenance of domestic discrimination legislation. The applicable test was whether in substance the relationship between the parties was one that met the criteria laid down by EU law. Whilst the appeal was brought on a range of grounds it is helpful to focus on two criteria highlighted by Lady Justice Arden, who gave the only reasoned judgment: First, a requirement that the putative employee should agree personally to perform services, and second, a requirement that the putative employee should be subordinate to the employer, that is, generally be bound to act on the employer’s instructions.

The requirement to personally perform work

The Court of Appeal made short work of the argument that there was no requirement for personal work. The EA, Hashwani and the EU jurisprudence upon which it relies, makes clear that there must be some obligation to perform work personally. The Employment Tribunal found as fact that Mrs. Halawi had a power of substitution; she did not have to give reasons for any substitution nor seek approval for it. Although that power of substitution was rarely used, it was neither a sham nor something that could be disregarded.

The issue of subordination

The Employment Tribunal had found that Mrs. Halawi was not subject to WDF’s control in the way she carried out her work. Such a lack of subordination was also consistent with a lack of integration into WDF’s business. Mrs. Halawi argued that hers was a case where the need for subordination was qualified, relying on the Supreme Court’s Judgment in Bates.

In Bates, it will be remembered Lady Hale held that the absence of subordination might not in some cases mean that there is no relationship of employment; it was not a ‘…freestanding and universal…’ element. Immediately prior to making that finding Lady Hale had cited the case of Westwood, the doctor who provided hair restoration procedures amongst other medical services elsewhere, holding that "…one may be a professional person with a high degree of autonomy as to how the work is performed and more than one string to one’s bow, and still be so closely integrated into the other party’s operation as to fall within the definition.”

In Mrs. Halawi’s case the Court of Appeal relied on the fact that there was no documentation to support the existence of employment, and independence was not a necessary feature of Mrs. Halawi’s work. Consequently, the requirement for subordination did not need to be qualified, and the requirement must be satisfied for employment to be found.

Consequently, on both of these grounds the appeal failed. Mrs. Halawi was not an employee within the extended meaning of the EA and could not pursue her claim for discrimination against WDF.

The Judgment is in many ways a statement of orthodoxy. It affirms the law in this area, citing and relying upon previous cases, though admittedly the Supreme Court, by which the Court of Appeal was bound, had decided a number of those. However it is interesting that Lady Justice Arden chose to cite certain comments made by Mr. Justice Langstaff, President of the Employment Appeal Tribunal, who had heard the first appeal. Mr. Justice Langstaff had reached his conclusion, subsequently endorsed by the Court of Appeal, despite having "…an uneasy feeling…that the arrangements here were such that the Claimant could have been the victim of discrimination and yet have no right to complain to a tribunal about it.” It is necessary for a court or tribunal to approach the application of discrimination legislation purposively and not restrictively, reflecting its European provenance. But even when approached in that way the necessary prerequisites for a claim must be met, and where they are not, as here, the claim cannot proceed.

For a copy of the Judgment click here 
Posted: 31.10.2014 at 14:51
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