Jersey Employment and Discrimination Tribunal · Tribunal Case Number: 1612-D-34/16 JEDT Judgment 4...

Tribunal Case Number: 1612-D-34/16

JEDT Judgment 1

Jersey Employment and Discrimination Tribunal

Applicant: Ms Erin Bisson

Respondent (1): Mr David Doré

Respondent (2) Red Appco Cabs Limited

Date: 10 February 2017

Before: Mrs Hilary Griffin, Deputy Chairman, sitting alone

Representation:

Applicant: In person

Respondent Mr David Doré, Director

Employment (Jersey) Law 2003 NOTIFICATION OF THE TRIBUNAL’S JUDGMENT

NOTIFICATION OF THE TRIBUNAL’S JUDGMENT


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THE TRIBUNAL’S JUDGMENT

THE DECISION

The Tribunal finds that the Applicant was not an ‘employee’ under the provisions

set out in Article 1A of the Employment (Jersey) Law 2003. Rather, she was a self-

employed person who was in business on her own account.

Consequently, the Applicant’s complaints, brought under the Employment

(Jersey) Law 2003 and the Discrimination (Jersey) Law 2013, may not proceed and

are struck out on the grounds that they have no reasonable prospects of success.

THE REASONS

BACKGROUND

1. The Applicant submitted complaints to the Tribunal that:

a) contrary to Articles 10(c) and 10(e) of the Discrimination (Jersey) Law 2013

(“Discrimination Law”) the Respondents directly discriminated against the

Applicant in respect of the protected characteristic of gender re-assignment;

b) contrary to Article 61 of the Employment (Jersey) Law 2003 (“Employment

Law”), the Second Respondent (“Red Cabs”) unfairly dismissed the Applicant;

c) in breach of contract, Red Cabs failed to give the Applicant appropriate notice

to terminate her employment, such failure amounting to a wrongful dismissal;

d) contrary to Article 13 of the Employment Law, Red Cabs failed to pay to the

Applicant a sum in respect of entitlement to annual leave;

e) contrary to Article 51(1) of the Employment Law, Red Cabs failed to provide the

Applicant with itemised pay statements; and


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f) contrary to Article 3 of the Employment Law, Red Cabs failed to provide the

Applicant with a statement of employment terms.

2. The Applicant’s complaint of unfair dismissal (as per paragraph 1(b) above) was

struck out by the Tribunal at an earlier hearing on the grounds that the complaint

was filed outside the relevant time-limits as set out in Article 76 of the

Employment Law.

3. A Tribunal hearing (“Hearing”) was convened in order to establish whether the

Applicant’s relationship with Red Cabs was that of:

a) an ‘employee’ (as defined under Article 1A of the Employment Law); or

b) a self-employed person who was carrying on a business undertaking on her

own account.

4. A finding by the Tribunal that the Applicant was not an employee under the

provisions of the Employment Law would result in all of her complaints under

both the Employment Law and the Discrimination Law being struck from the

Register of Complaints.

EVIDENCE

5. The rules governing the operation of taxi-cabs In Jersey have recently been

amended. In this decision, I refer to the provisions as they were in August and

September 2016.

6. There are three different categories of taxi-cab, defined in the Motor Traffic (Taxi-

Cabs – General) (Jersey) Order 2002 (“Order”) as either (a) a ‘controlled taxi-cab’

(identified by a yellow licence plate), (b) a ‘restricted taxi-cab’ (identified by a

white licence plate) or (c) a ‘limousine taxi-cab’. The Driver and Vehicle

Standards Agency (“DVS”) is responsible for licencing and enforcing the legal

requirements relating to the taxi-cab industry.

Red Cabs


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7. In order to drive a taxi-cab, the DVS states that an individual must be affiliated to

a taxi-cab company which, in turn, must hold an appropriate licence. On 27

October 2014, the DVS approved Red Cabs’ application to establish a new

restricted taxi-cab company and granted Red Cabs a licence (“Red Cabs Licence”)

to operate as such. In the letter of confirmation, the DVS stated:

“… The Minister:

recognized Red Appco Cabs Limited, trading as “Red Cabs” as a restricted taxi-

cab company to which restricted taxi-cab licence holders can affiliate…”

8. Mr Doré was the sole director of Red Cabs. He gave evidence that, with changes

afoot in the taxi industry, he saw an opportunity to use a different business

model to run a restricted taxi-cab company. He gave evidence that Red Cabs

sought to provide drivers with an appropriately licenced company to which they

could affiliate while enabling those drivers to build their own businesses at

minimal cost. The Red Cabs Facebook page described the company as a “not for

profit collective” with the purpose of allowing drivers to “earn a living to the best of

their own ability on the most favourable terms possible.” Mr Doré’s gave evidence

that he saw Red Cabs as a convenient “booking service”, explaining that:

a) drivers could not be ‘fired’ as long as they remained Public Service Vehicle

(“PSV”) Licence holders;

b) there was flexibility so drivers could chose if and when they worked;

c) there was no ‘greasing’ whereby the ‘control room’ of a taxi-cab company gives

more work to popular team members, thereby depriving others of work; and

d) Red Cabs was a low cost option, with Depot Rent (a charge made by taxi-cab

companies to its drivers) being approximately £25 per week when Red Cabs

started, and then reducing to zero during 2016.

9. There was no concerted ‘recruitment’ process to attract drivers to Red Cabs. The

intention was that Red Cabs would attract other drivers by ‘word of mouth’. Mr


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Doré did not conduct interviews for prospective drivers and he explained in his

evidence that so long as an individual had a PSV Licence entitling them to drive a

taxi-cab, they could join Red Cabs. As Mr Doré put it in his evidence, Red Cabs

would ‘take anybody’.

10. Red Cabs did not have its own bank account and never held any funds. It never

paid any salaries and at the time of the matters being considered in this case, Red

Cabs did not receive any fees or Depot Rent from the six drivers who affiliated to

Red Cabs. According to Mr Doré, it was never intended that Red Cabs would be

profitable. Mr Doré’s evidence was that Red Cabs was intended to be ‘self-

funding’.

11. The aim of Red Cabs was to set up a network of taxi-cabs through the use of an

app, similar to that used by Uber in cities around the world. The idea was that

each driver would be able to build their own brand and broaden their own

customer base thereby increasing their takings. It was clear from the evidence

that Mr Doré saw this as a real opportunity for him to earn a good income as a

taxi-cab driver in the future. He considered Red Cabs to be an investment in his

future and he supported Red Cabs financially in the hope that once the Minister

introduced the proposed changes to the taxi-cab system, Mr Doré would be able

to leave his current employment, drive taxi-cabs for a living and benefit from the

flexibility afforded by the Red Cabs model.

12. On 25 September 2016, Red Cabs ceased trading. Mr Doré notified the Applicant

of this fact by email dated 28 September 2016.

Applicant’s position

13. At the relevant time, the Applicant was the holder of a PSV Licence to drive a

restricted taxi-cab. The PSV Licence was dated 9 February 2016 and stated that:

“The driver must operate solely from Red Cabs.”

14. As is relatively standard, the PSV Licence set out 13 conditions with which the

Applicant was obliged to comply in order to retain the PSV Licence:


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“This licence is subject to the following conditions:

(1) 80% of work must be pre booked

(2) Any other driver providing a taxi-cab service must be employed by the licence

holder (Article 28 Motor Traffic (Jersey) Law 1935) [and] be issued with an

employment contract and a copy sent to DVS

(3) Minimum mileage to be covered is 19,100 per year

(4) No third party advertising to be displayed

(5) Radio communication must be fitted and operational

(6) Table of fares to be kept fixed in the cab

(7) The approved roof sign is fitted

(8) The approved taxi meter is fitted, sealed and maintained

(9) The driving of a taxi-cab should be the main employment/income of the licence

holder

(10) The licence holder must adhere to the Code of Conduct at all times

(11) This licence may only be used by the holder, personally or through the

intermediary of employees of the holder, for the provision of the public service

operated by the holder. Neither the licence nor the use or benefit thereof may

be leased, licensed, assigned, or otherwise transferred to any third party,

whether permanently or temporarily. No payment may be required or

received by the holder for allowing any person to use the vehicle to which this

licence relates for the provision of a public vehicle service

(12) The licence holder must be the owner and registered keeper of the vehicle

(13) Licence holder to work from the recognized restricted taxi-cab company or co-

operative named on the application and shown overleaf and seek permission

from DVS before moving to a different company or co-operative.”

15. The Applicant also produced a second PSV Licence (“Second PSV Licence”)

which was dated 16 December 2016 (after the relevant events). The Second PSV

Licence was worded slightly differently to the original PSV Licence, stating that

the Applicant “must be affiliated to…” rather than “operate solely from…” the


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licenced company. The Applicant submitted that the difference in wording

showed her to have been an employee of Red Cabs1:

16. The conditions placed upon the Applicant were largely the same in both PSV

Licences, save that ‘booking entities’ were included in the Second PSV Licence as

an acceptable restricted taxi-cab company from which the licence holder could

operate. Having considered this point, I am satisfied that the difference in the

drafting of the two PSV Licences had no legal or practical impact on the

Applicant’s employment status.

Contract

17. There was no formal written contract between the Applicant and Red Cabs.

There was, however, a Letter of Authority which stated:

“Letter of Authority – Red Cabs Driver

This letter confirms that Erin Bisson (the ‘Red Cabs Driver”) has been irrevocably

authorized by the Directors of Red Appco Cabs Limited (“Red Cabs”) to attach their

White Plate to Red Cabs at any time from 16 June 2015 and to remain as a Red Cabs

Driver indefinitely thereafter, subject to the following:

Standard Terms & Conditions

1. Adherence to all applicable DVS Regulations as both a PSV Driver and as a White

Plate Holder including the Code of Conduct, as amended from time to time.

2. Adherence to the Red Cabs Drivers Handbook, as amended from time to time.

1 The Deputy Bailiff made a finding in Bisson v Minister for Infrastructure [2017] JRC023 that the Second PSV Licence constituted a new PSV Licence. This is not relevant for the purposes of this case.


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Additional Entitlements

1. The Red Cabs Driver is entitled to employ a 2nd Driver(s) on their vehicle under

whatever commercial terms they see fit, subject to adherence to all applicable DVS

Regulations.

2. After 6 months of being a Red Cabs Driver (ie. of having attached their White Plate

attached to Red Cabs) they are irrevocably entitled to become a Partner in Red Cabs at

any time they wish, subject to adherence to the Red Cabs Partnership requirements….”

The Red Cabs App

18. Unlike other taxi-cab companies in Jersey, Red Cabs’ main method of attracting

customers was via an app which customers downloaded from the App Store onto

their smartphones (“the App”).2 When a Red Cabs customer wanted to call a cab,

he or she booked it via the App. The App automatically alerted the nearest Red

Cabs vehicle.

19. Many people will be familiar with the app used by Uber in the UK and around

the world. It is important to note at this stage that the App was:

a) much less sophisticated than that used by Uber; and

b) was not owned by Red Cabs but by a third party software developer (“App

Owner”) who, for a monthly fee, granted to Red Cabs a licence to use the

software for the App.

20. Mr Doré paid the monthly fee for the use of the software for the App.

21. There were two ways in which customers could connect to a Red Cabs driver;

either by telephone or via the App. The majority of customers used the App. 2 Red Cabs also provided a ‘future booking’ service. It was not mandatory for drivers to be involved

in the ‘future booking’ service, but if they signed up to it, they were then obliged to undertake the

work. The Applicant gave evidence that she did not generally sign up to the ‘future booking’ service.

I therefore do not propose to consider this part of the Red Cabs business in this decision.


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Customers downloaded the App to their smartphones and then registered by

providing a name and a telephone number. The App (which was controlled

entirely by the App Owner) only required basic registration details. It did not

require details such as surnames, bank account details or card details and most

customers only provided a first name; indeed it was open to customers to

provide a false name so long as they provided a mobile telephone number.

22. Once registered with the App, the customer could book a trip on the App. When

a customer ordered a cab the App located the nearest Red Cabs vehicle and

notified the cab driver that a trip had been requested. It was then for the driver

to decide whether to ignore, reject or accept the request.

23. Mr Doré gave evidence (which was unchallenged by the Applicant) that it was a

fundamental principle of Red Cabs that drivers must be entitled to decide when

to work and which jobs they wished to accept. Red Cabs had no interest in

controlling the activities of the drivers and Red Cabs had not paid for sufficiently

sophisticated software to enable it to do so. Mr Doré’s unchallenged evidence

was that:

a) drivers were entirely free to ignore or reject any number of customer lift

requests;

b) there were no penalties (financial or otherwise) for ignoring or rejecting work;

c) there were no penalties if a driver accepted work and then cancelled or simply

failed to collect a customer (neither Red Cabs nor Mr Doré would be aware that

such an event had occurred); and

d) no cancellation fee was charged to a customer who cancelled their trip.

24. Once a driver accepted the customer’s request on his or her smartphone (thereby

allowing the customer to track the driver’s progress on their own smartphone)

the driver was free to telephone the customer for further information if

necessary. Upon arrival at the customer’s location, the customer then notified the


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driver of their destination. Both the driver and the customer were free to change

their mind and cancel the trip at any point.

Drivers’ income

25. The PSV Licence conditions specify that a taxi-cab must:

a) have a tariff machine; and

b) display its tariffs in the taxi-cab.

26. Mr Doré gave evidence that it was open to Red Cabs drivers to negotiate fares

directly with passengers. However, DVS rules stated that drivers were not

permitted to exceed the upper tariff as set out by each registered taxi-cab

company.

27. For the most part, customers paid their fares directly to the driver, either in cash

or by credit or debit card. Occasionally, customers paid by using the ‘taxi-card’

(“Taxi-Card”), a payment option which was offered on the App. This effectively

allowed the customer to buy credit in advance and then pay for their trip out of

that credit. However, Red Cabs did not have access to Taxi-Card funds. Instead,

the App Owner held and controlled the Taxi-Card funds; upon receipt of a Taxi-

Card payment in relation to a fare earned by a driver, the App Owner either

reimbursed the driver directly for the full amount of the fare or paid the full fare

to another Red Cabs driver who then reimbursed the full fare to the driver

without making any deductions. Either way, the driver always received the fare

in its entirety and drivers did not report their takings to Red Cabs.

Costs and financial risk

28. All Red Cabs drivers were responsible for the cost of running their own taxi-cab.

The Applicant confirmed that she:

a) owned her own vehicle and paid for appropriate servicing;

b) paid her own car insurance;


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c) paid her own tax and social security;

d) paid her own petrol; and

e) paid for her own PSV Licence.

29. Drivers also took all the economic risk involved in carrying passengers. For

example, if a passenger was sick in the taxi-cab, it was the driver’s responsibility

to clean the vehicle and try to ‘get money out of the customer’ to pay the cleaning

cost.3 Similarly, if a customer refused to pay a fare, it was up to the driver to

recover it; Red Cabs would not reimburse any such unpaid fare, nor would it

pursue the customer on behalf of the driver.

Complaints

30. Mr Doré gave evidence about how complaints were dealt with by Red Cabs. He

explained that there was no formal complaints procedure, and that customers

were always able to make a complaint direct to the DVS. There were only two or

three occasions where a customer may have had grounds to complain. On those

occasions, Mr Doré simply ‘pinged them some small amount of compensation’ in the

region of £5 or £10. Mr Doré made these payments out of his own funds and did

not seek reimbursement from the drivers because the sums were so small and

Red Cabs did not have the funds to make such payments. Again, Mr Doré

considered these payments to be the ‘risk’ involved in his investment in the

future of this business.

Advertising

31. Red Cabs drivers were entitled to source and advertise their services as they saw

fit. Mr Doré gave evidence that each driver decided the extent of their

advertising; Red Cabs existed to enable each driver to build up their own

business.

3 There was a ‘soiling charge’ option on the App, but Mr Doré described this as ‘aspirational’ and it was rarely used.


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32. In her evidence, the Applicant accepted that she was able to source her own

work. Indeed, she confirmed that the majority of her work came via her own

advertising.

33. The Applicant confirmed that she had secured the right to trade under the

following names:

a) Express Cabs

b) Express Pet Cabs

c) Pet Taxi-Cab

d) Paws Express

e) Super Taxi-Cab

34. The Applicant confirmed that she sought to expand her client base (and thereby

her income) by providing a taxi-cab service for both humans and animals. The

Applicant confirmed that she paid to:

a) place advertisements for Express Cabs and Pet Taxi-Cab in Yellow Pages;4 and

b) print her own Express Cabs business cards.

35. The Yellow Pages advertisements did not make any reference to the Applicant’s

connection with Red Cabs. However, the Applicant gave evidence that the

Express Cabs business cards referred to the ‘Taxi App Partnership’ on the back of

the business cards, together with some QR codes which would take the customer

directly to the App.

Second driver

36. Condition 2 of the Applicant’s PSV Licence stated that:

4 The Applicant explained that her Pet Taxi-Cab advertisement contained a typing error in the telephone number, and so she did not benefit from this particular advertisement.


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“Any other driver providing a taxicab service must be employed by the licence holder, …

[and] be issued with an employment contract and a copy sent to DVS.”

37. Condition 2 is a standard condition enabling licence holders to employ a second

driver to drive their registered taxi-cab. In the trade, this is known as a ‘double

shifter’.

38. I heard evidence from both parties that, by employing a second driver, a PSV

Licence holder is able to continue to generate income when he or she is not

available to drive the taxi-cab themselves (eg. when on holiday or during periods

of time when they simply do not wish to drive the taxi-cab).

39. The Applicant started driving a taxi-cab as a second driver for RB (another Red

Cabs driver). The Applicant and RB entered into their own employment contract

whereby RB was the employer and the Applicant was the employee. When RB

was not driving his vehicle, the Applicant was able to do so and provided a taxi-

cab service under RB’s PSV Licence. The Applicant confirmed that when she

drove RB’s taxi-cab, she used his smartphone and accessed the App to secure

work. She was paid a salary by RB. The legal relationship between the

Applicant and RB was a private one. At the Hearing, the parties agreed that the

relationship between the Applicant and RB was entirely separate to Red Cabs

and permission was not sought from Red Cabs before that agreement was

reached.

40. The Applicant affiliated to Red Cabs when she secured her own PSV Licence in

June 2015. As set out above, Red Cabs provided a Letter of Authority in which it

stated that:

“The Driver is entitled to employ a 2nd Driver(s) on their vehicle under whatever

commercial terms they see fit, subject to adherence to all applicable DVS Regulations.”

41. In March 2016, the Applicant agreed with Mr Doré that the Applicant would

employ Mr Doré as her second driver in accordance with Condition 2 of her PSV

Licence. I was shown various documents, including:


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a) the signed contract of employment between the Applicant and Mr Doré

pursuant to which the Applicant employed Mr Doré as her second driver;

b) a letter from the Applicant to the DVS dated 21 March 2016 in which the

Applicant confirmed her decision to employ a second driver and enclosed a

copy of the contract of employment between herself and Mr Doré;

c) a letter from the Applicant to the Income Tax Department dated 21 March 2016

in which she confirmed two matters:

(i) that she was “still self-employed as a taxi-cab driver (and will remain so)” and

that she would “not personally be employed by Express Cabs and [would]

continue to operate [her] taxi-cab on the same self-employed basis that [she had]

done previously”; and

(ii) that she had applied for Regulations of Undertakings consent to employ

one person under the Registered Business Name of Express Cabs and

requested that Express Cabs be registered as an employer for the purposes

of ITIS.

d) a letter from the Applicant to the Social Security Department dated 21 March

2016 requesting that she be registered as an employer with the trading name of

Express Cabs; and

e) a letter from the Social Security Department to Express Cabs dated 24 March

2016 confirming Express Cabs’ registration as an employer.

42. I also saw three documents (together the “Second Driver Documents”) drafted by

Mr Doré on behalf of Red Cabs relating to data held by Red Cabs about its

drivers and any second drivers:

a) a document entitled “Double shifter requirements”. This was effectively a

‘checklist’ of matters to verify when a Red Cabs driver employed a second

driver.


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b) a document entitled ‘Information and documents to be provided to Red Cabs by Main

Driver before employing a 2nd driver’. This document contained the Applicant’s

contact details, together with her plate number, her personal tax reference

number and her RBN Name and number. It also confirmed the Applicant’s

intention to employ Mr Doré from 1 April 2016.

c) a document entitled ‘Information and documents to be provided to Red Cabs by 2nd

Driver or Company Drive’. This provided Mr Doré’s contact details and other

information including whether he had an android smartphone and whether he

was able accept card payments (both of which were marked as compulsory).

The document also included the following notice (“Notice”):

“Written consent from Red Cabs to employ a 2nd driver will not be issued until the

above information and documentation is provided to Red Cabs.”

43. Mr Doré gave evidence that, notwithstanding the existence of the Notice in the

Second Driver Documents, there was “no requirement” for drivers to obtain Red

Cabs’ written consent to employ a second driver. He stated that as a PSV Licence

holder was entitled to employ second drivers under the terms of their PSV

Licences, Red Cabs was not in a position to stop such action. Instead, Mr Doré

explained that the Notice was simply a means of ensuring that Red Cabs

obtained all relevant information as required by the DVS.

44. It was unclear from the evidence how much work Mr Doré undertook in terms of

working as a second driver for the Applicant. In any event, following an incident

on 16 August 2016, Mr Doré resigned from his employment with the Applicant.

‘Control’ over the Applicant

45. The Applicant gave evidence that Mr Doré was the Applicant’s ‘boss’ and that he

exercised control over her in her day-to-day activities. The Applicant drew my

attention to a letter from Mr Doré to the States of Jersey Police, thanking the

Police for their handling of some transphobic abuse against the Applicant. In this


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letter, Mr Doré referred to himself as the Applicant’s “boss”. The Applicant also

provided a signed witness statement from RB that Mr Doré also referred to

himself as RB’s ‘boss’.5

46. The Applicant also submitted that dealings between Mr Doré and the DVS

regarding various issues concerning the Applicant showed him to be in control of

the Applicant. In particular, she pointed to email correspondence between the

DVS and Mr Doré regarding the Applicant’s ‘Purple Plate’ application. The

Applicant submitted that the DVS liaised with Mr Doré because “Mr Doré was

controlling me before I even drove onto the taxi rank.” She submitted that Mr Doré

acted as her employer whenever he liaised with the DVS on her behalf.

47. For his part, Mr Doré denied exercising control over the Applicant and denied

that Red Cabs was the Applicant’s employer. He gave evidence that, because he

was the sole director of Red Cabs, DVS identified him as the person to whom it

should address when dealing with problems with Red Cabs drivers. During the

Applicant’s affiliation to Red Cabs, there were a number of matters relating to the

Applicant which required communication with the DVS. Mr Doré’s evidence

was that the DVS preferred to deal with him (in a “semi-professional capacity”)

rather than directly with the Applicant. Mr Doré’s evidence was that he acted as

an intermediary who was seeking to help the Applicant rather than as her

employer. He said that he referred to himself as her “boss” as a simple means of

communicating that he was the sole Director of Red Cabs and had ultimate

responsibility for what happened under the Red Cabs Licence.

48. The Applicant gave evidence that Mr Doré ‘suspended’ her on two occasions.

She further submitted that these suspensions showed her to be an ‘employee’.

The first ‘suspension’ occurred while RB employed the Applicant as a second

driver. In his evidence, Mr Doré accepted that, despite there being no legal

relationship between the Applicant and Red Cabs, the Applicant was indeed

‘suspended’ by Red Cabs. Mr Doré submitted that this was a ‘voluntary’

5 RB did not attend the hearing and did not provide evidence under oath


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suspension, the wording for which was agreed by RB. Mr Doré submitted that,

given the serious nature of the Applicant’s breach of DVS rules, it was important

that Red Cabs was seen to be taking action where affiliated drivers (and their

second drivers) breached such rules. The inference was that RB agreed with Mr

Doré that the Applicant had to be ‘suspended’ to protect Red Cabs’ reputation.

Mr Doré was clearly afraid that Red Cabs could lose its licence to operate as a

restricted taxi-cab company if it did not take a firm stand with the Applicant’s

behaviour and Mr Doré gave evidence that the suspension was done in

conjunction with RB.

49. For her part, the Applicant denied that the suspension was voluntary; she

submitted that she had to accept it because to fail to do so would have had severe

consequences for RB.

50. The second ‘suspension’ took place on 17 August 2016 following an altercation at

the taxi rank to which the police were called on the evening of 16 August 2016.

Mr Doré sent an email to the Applicant before the DVS offices opened on 17

August 2016 advising the Applicant of her ‘suspension’. There was an exchange

of emails between Mr Doré and the Applicant, with the Applicant pointing out to

Mr Doré on 25 August 2016:

“In simple terms I am self-employed and have not suspended myself.

You suspended me treating me as an employee. If you do not advise DVS that I am no

longer suspended then you may find yourself in an employment tribunal…"

51. The Applicant argued at the Hearing that the fact that Red Cabs had the ability to

deprive her of earning her living by enforcing a suspension demonstrated that it

was exercising ‘control’ over her in the manner of an employer.

52. Mr Doré gave evidence that he suspended the Applicant in order to pre-empt the

“uproar” which he predicted would occur as soon as the DVS offices opened on

the morning of 17 August 2016. He wanted to make it clear to the DVS that Red

Cabs neither supported nor condoned the Applicant’s actions on 16 August 2016;


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Mr Doré was afraid that the Applicant’s behaviour might result in Red Cabs

being stripped of its licence to operate as a restricted taxi-cab company.

LAW

53. Article 1A of the Employment Law states:

“1A ’Employer’ and ‘employee’

(1) In this Law –

(a) ‘employer’ means a person who employs another person; and

(b) 'employee' means a person who is employed by an employer.

(2) For the purposes of paragraph (1), a person is employed by another person

if the first person works for the second person under a contract of service or

apprenticeship with the second person.

(3) For the purposes of paragraph (1), a person is also employed by another

person if the first person enters into any other contract with the second person

under which –

(a) the first person undertakes to do, or to perform personally, work or

services for the second person; and

(b) the status of the second person is not that of a client or customer of

any profession or trade or business undertaking that is carried on by the first

person.

(4) It is immaterial whether a contract to which paragraph (2) or paragraph (3)

refers is express or implied.

(5) If the contract is express, it is immaterial whether it is oral or in writing.”

54. Article 1 of the Discrimination Law states that:

“'employee' and 'employer' have the meaning given in Article 1A of the

Employment Law and 'employment' shall be construed accordingly."


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55. It is worth noting at this point that the term ‘employee’ is widely defined in

Article 1 of the Employment Law, and encompasses what, under English law, is

termed a ‘worker’. The removal in September 2015 from the Employment Law of

the requirement that an employee must be contracted to work 8 hours or more

per week has meant that the Tribunal has given greater consideration to the

meaning of the Article 1A definition of ‘employee’. For this reason, care should

be taken when considering the impact of older decisions on cases moving

forward.

56. The Employment Law draws a distinction between:

a) an individuals who is an ‘employee’ under Article 1A(2) (“1A(2) Employee”), ie

a person who is employed under a contract of employment; and

b) an individual who is an ‘employee’ under Article 1A(3) (“1A(3) Employee”), ie a

person who provides his or her personal services as part of a profession or

business undertaking carried on by someone else (classified as a ‘worker’ in the

UK); and

c) a self-employed individual who carries on a profession or a business

undertaking on his or her own account and who enters into contracts with

clients or customers to provide work or services to them.

[see per Lady Hale in the leading Supreme Court judgment of Bates van

Winkelhof v Clyde & Co LLP & Another [2014] 1 WLR 2047].

57. In the UK, the distinction between an Article 1A(2) Employee and a 1A(3)

Employee) is of great importance; the former enjoys more enhanced employment

rights than the latter who is termed a ‘worker’. In Jersey, however, both groups

are treated identically; they are both ‘employees’ for the purposes of the

Employment Law, each enjoying identical rights arising from that employment

status.


JEDT Judgment 20

58. It was unclear from the Applicant’s submissions whether she considered herself

to be a 1A(2) Employee or a 1A(3) Employee. I therefore summarise below the

law which is applicable to each class of employee.

Article 1A(2) Employee

59. The question of whether an individual is a 1A(2) Employee has been addressed

many times in this Tribunal. One might say that Article 1A(2) is the ‘traditional’

interpretation of what it means to be an ‘employee’; the individual must work

under a contract of employment (or apprenticeship). There are three elements

which must be present in every contract of employment and if any one of those

three elements is missing the that individual cannot be a 1A(2) Employee. The

three elements are that:

a) there must be a ‘mutuality of obligation’ between the parties such that there is a

contract;

b) the contract must contain a requirement that the individual provides personal

service; and

c) the ‘employer’ must exercise a sufficient degree of control over the work carried

out by the individual so as to make the ‘employer’ the master.

Article 1A(3) Employee

60. Less well known is the second definition of ‘employee’ under Article 1A(3).

Article 1A(3) provides that an individual will be an ‘employee’ if there is a

contract in which:

a) there is an obligation on the individual to provide personal service; and

b) the person for whom such service is performed is not a client or customer of the

individual undertaking the work.

61. Article 1A(3) therefore significantly widens the definition of ‘employee’ beyond

that which is provided under Article 1A(2).


JEDT Judgment 21

Analysis of legal authorities

Mutuality of obligation

62. The requirement that there must be ‘mutuality of obligation’ means that,

throughout the duration of the contract in question, both the ‘employer’ and the

‘employee’ must be under legal obligations to one another. Indeed, if there is no

‘mutuality of obligation’ there can be no contract at all. Therefore the question of

mutual obligations is relevant to the question of whether a contract exists at all,

as well as to the more specific question of whether there is a contract of

employment (Stephenson v Delphi Diesel Systems Ltd [2003] ICR 471; Cotswold

Developments Construction Ltd v Williams [2006] IRLR 181); Marchem (Europe

Limited v Helen Carré [2015] JRC075).

63. The Royal Court case of Marchem v Carré addressed the issue of ‘mutuality of

obligation’ in the context of zero hour contracts. Whilst this case does not

concern zero hours contracts, Marchem remains relevant insofar as it sets out the

requirement of mutuality of obligation between the parties to an agreement if it is

to be a contract of employment under Article 1A(2). In Marchem, the Royal

Court cited with approval a summary of the legal position as stated in Mollet v

Sigma Group Limited (JET 19/2013) at paragraph 11:

“… For a contract of employment to exist there must be, at the root of that

contract, an obligation on the employer to provide work and an obligation on

the employee to accept an offer of work.”

64. If mutuality of obligation exists between two parties but the obligations are not in

line with those envisaged in Marchem and Mollet (ie no obligation to provide or

accept work) then although the individual will not be a 1A(2) Employee, they

may nonetheless still be a 1A(3) Employee. ‘Marchem mututality’ is not required

to be a 1A(3) Employee.


JEDT Judgment 22

Personal Service/performance6

65. Once it has been established that a contract exists, it is necessary under both

Articles 1A(2) and 1A(3) to establish whether or not the individual is required to

personally perform the work under the contract. Whether the individual is

obliged to provide ‘personal service’ is key to the question of whether or not that

individual is an employee or is self-employed. In the absence of ‘personal

performance’, an individual will necessarily fall outside both Articles 1A(2) and

1A(3) of the Employment Law; put quite simply, without personal performance

an individual cannot be an ‘employee’ under the Employment Law.

66. The issue of whether personal performance is required for the performance of a

contract will be fact sensitive. The terms of the contract (be it written or oral)

must be examined to establish whether it includes an express or an implied right

of substitution, ie was the ‘service provider’ entitled to substitute themselves with

another person to undertake the work or was there a requirement that the

‘service provider’ provide personal service.

67. Where a substitution clause appears to exist, the Tribunal will carefully examine

the evidence to ensure that it reflects the true nature of the relationship between

the parties. In Consistent Group Ltd v Kalwak [2007] IRLR 560 Elias J, then

President of the EAT, stated:

“The concern to which tribunals must be alive is that armies of lawyers will

simply place substitution clauses, or clauses denying any obligation to provide

or accept work, in employment contracts, as a matter of form, even where such

terms do not begin to reflect the real relationship.”

68. In Pimlico Plumbers Limited & another v Smith [2017] EWCA Civ 51, the English

Court of Appeal considered at length the relevant case law with regards to

personal performance. In his leading judgment, Etherton MR set out five

principles as to the requirement for personal performance. The principles are:

6 I interpret the phrases ‘personal service’ and ‘personal performance’ to have the same meaning. I use them interchangeably as they are used as such in the relevant authorities.


JEDT Judgment 23

a) an unfettered right to substitute another person to do the work or perform the

services is inconsistent with an undertaking to do so personally;

b) a conditional right to substitute another person may or may not be inconsistent

with personal performance. It will depend on the precise contractual

arrangements and, in particular, the extent to which the right of substitution is

limited or occasional;

c) a right of substitution only when the contractor is unable to carry out the work

will, subject to any exceptional facts, be consistent with personal performance;

d) a right of substitution limited only by the need to show that the substitute is as

qualified as the contractor to do the work, whether or not that entails a

particular procedure, will, subject to any exceptional facts, be inconsistent with

personal performance; and

e) a right to substitute only with the consent of another person who has an

absolute and unqualified discretion to withhold consent will be consistent with

personal performance.

69. In the EAT case of James v Redcats (Brands) Ltd [2007] ICR 1006, Elias J (as he

then was) set out a ‘dominant purpose’ test in order to draw a distinction

between employees, workers (1A(3) Employees) and those engaged in their own

business. He stated that if the dominant feature of the arrangement between the

two parties was that the individual was to provide personal service to the other,

then, even if the normal prerequisites of employment were absent, the individual

was likely to be a ‘worker’ or, in Jersey, a 1A(3) Employee. This was quoted with

approval by Lady Hale in Bates Van Winkelhof.

Control

70. In Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National

Insurance [1968] 2 QB 497, McKenna J introduced the requirement that, in order

for an individual to be a 1A(2) Employee, the employer must have ‘control’ over


JEDT Judgment 24

the employee. By contrast, the question of ‘control’ is not relevant under Article

1A(3).

71. For the purposes of Article 1A(2) the concept of ‘control’ does not require that an

employee carries out work under the actual supervision of the employer. Rather,

it means that the employer must have ultimate authority over the employee in

the performance of the work so that the employee is subject to the employer’s

orders and directions. In the absence of ‘control’ there cannot be a contract of

employment and an individual cannot be a 1A(2) Employee (but may still be a

1A(3) Employee).

72. What amounts to ‘sufficient’ control will depend on the facts of each case.

Assessment of the nature of the relationship

73. In practical terms, identifying whether an individual is a 1A(2) Employee or a

1A(3) Employee serves little purpose in Jersey. It does not matter that an

individual does not have a contract of employment; if they fall within the

provisions of Article 1A(3), they will be an employee under the Employment

Law. The difficulty is in distinguishing between a 1A(3) Employee and a person

who is in business on their own account. This is a much litigated area, and I have

considered at length the recent cases of Aslam & Farrar & Others v Uber B.V &

Others ET 2202551/2015 and Pimlico Plumbers Limted & Others v Smith [2017]

EWCA Civ 51. However, it is important to note that each case was based on its

own facts and, in any event, are not binding on this Tribunal.

74. In Bates van Winkelhof, Lady Hale approved comments made in the EAT case of

Cotswold Developments Construction Ltd v Williams [2006] IRLR 181. In that

case, Langstaff J made the following comments:

“… A focus on whether the purported worker actively markets his services as

an independent person to the world in general (a person who will thus have a

client or customer) on the one hand, or whether he is recruited by the principal


JEDT Judgment 25

to work for that principal as an integral part of the principal's operations, will

in most cases demonstrate on which side of the line a given person falls.”

75. The Court of Appeal case of Stringfellow Restaurants Ltd v Quashie [2013] IRLR

99 CA involved a lap dancer who performed for guests at the respondent’s clubs.

She paid a fee to the respondent each night which she worked. This enabled her

to earn payments from guests for whom she danced. She negotiated those

payments with the guests. The respondent ended the working relationship with

her and she complained of unfair dismissal. Elias LJ said this:

“The club did not employ the dancer to dance; rather she paid them to be

provided with an opportunity to earn money by dancing for the clients. The

fact that the appellant also derived profits from selling food and drink to the

clients does not alter that fact. …

The fact that the dancer took the economic risk is also a very powerful pointer

against the contract being a contract of employment. Indeed, it is the basis of

the economic reality test, described above. It is not necessary to go so far as to

accept the submission of Mr Linden that absent an obligation on the employer

to pay a wage… the relationship can never as a matter of law constitute a

contract of employment. But it would, I think, be an unusual case where a

contract of service is found to exist when the worker takes the economic risk

and is paid exclusively by third parties. On any view, the Tribunal was

entitled to find that the lack of any obligation to pay did preclude the

establishment of such a contract here.”

76. The case of Mingeley v Pennock and another t/a Amber Cars [2004] ICR 727 CA

involved an applicant who owned his own vehicle and paid the respondent mini-

cab operators £75 per week for a radio and access to their computer system

which allocated calls from customers to a fleet of drivers. The applicant was not

required to work particular (or any) hours and all the fare money was his to

keep. The tribunal found that he was not employed by the respondents. The

Employment Appeal Tribunal agreed and said:


JEDT Judgment 26

“… the Employment Tribunal was correct to conclude that, in order to bring

himself within [the relevant section of the relevant law] Mr Mingeley had to

establish that his contract with Amber Cars placed him under an obligation

“personally to execute any work or labour”. As the Tribunal found, there was

no evidence that he was ever under such an obligation. He was free to work or

not to work at his own whim or fancy. His obligation was to pay Amber Cars

£75 per week and if he chose to work then to do so within the requirements of

the arrangement. However, the absence from the contract of any obligation to

work places him beyond the reason of [the relevant law].”

77. I take from the above authorities that the Tribunal must carry out an evaluation

of the relevant factors in this case (both individually and as a whole) before

deciding whether or not the Applicant was in business on her own account.

CONCLUSION

78. The Applicant submitted that she was an employee under the Employment Law.

The Respondent argued that the evidence showed that she was self-employed. I

considered all the evidence and applied it to the law as set out above.

79. I was satisfied that, at a basic level, a contract existed between the Applicant and

Red Cabs. However, I still had to assess whether the mutual obligations were in

line with Marchem and, indeed, whether the relationship fell within the other

parameters required in order for the Applicant to be categorized as an ‘employee’

for the purposes of the Employment law.

With whom did the customer contract?

80. In this case, an important factor in determining whether or not the Applicant was

in business on her own account was whether the customers contracted with:

a) Red Cabs; or

b) the Applicant.


JEDT Judgment 27

81. In this regard, I considered the following facts to be relevant:

a) in order to register on the App, a customer only had to provide minimal details;

a name (usually a first name or, on occasions, a false name) and a mobile phone

number. The App did not require a surname nor did it require the customer’s

bank details because the customer paid the driver directly at the end of the

ride.7

b) Red Cabs did not have access to the customer’s details. Instead, those details

were held on the App which was owned and controlled by the App Owner.

c) the evidence was that Red Cabs was not interested in how the Applicant (or any

of its other drivers) treated their customers; Red Cabs did not charge the

customer a cancellation fee if the customer decided to cancel a trip nor did Red

Cabs penalize the Applicant if she chose to reject or cancel a trip. Indeed, the

evidence was clear that Red Cabs did not have a sufficiently sophisticated App

to enable it to track the Applicant’s acceptance and/or rejection rate.

d) The customer paid the fare directly to the Applicant either in cash, or by credit

card or by Taxi-Card. The Applicant retained the fare in its entirety and Red

Cabs did not require the Applicant to provide it with any details regarding

those fares; they were hers in their entirety and no deductions were made by

Red Cabs.

82. In order for a contract to exist between two parties, those two parties must be

able to identify with whom they are contracting. In this case, the registration

details provided by customers were so minimal as to make identification of that

customer impossible, particularly if the customer chose to use a false name.

Furthermore, the details provided by the customers were held on the App, which

was owned and controlled by the App Owner. Mr Doré’s evidence was clear that

Red Cabs did not have access to that customer information.

83. Based on an analysis of the above information, I concluded that there was no

contract between the customer and Red Cabs. By contrast, it was clear that a

7 Except when the Taxi-Card was used, where the driver was reimbursed by the App Owner.


JEDT Judgment 28

contract came into effect between the customer and the Applicant at the point

when the customer told the Applicant his or her destination and the Applicant

agreed to drive the customer in return for payment of the appropriate fare. It

was clear from the evidence that until that particular point, neither the Applicant

nor the customer was under any contractual obligation to embark on the taxi

ride; they could each cancel the trip at any point and suffer no penalty or

recourse from the other party or from Red Cabs.

Applicant autonomy

84. The evidence was also clear that the Applicant enjoyed significant autonomy

with regards to how she undertook her work. There were no minimum

contractual hours and the Applicant was free to work as little or as often as she

liked. Indeed, as mentioned above, Red Cabs was not in a position to be able to

even know when the Applicant was working.

85. The Applicant also had the freedom to expand her own business. Indeed, she

confirmed in her evidence that the vast majority of her income arose out of her

own efforts to expand her business rather than through Red Cabs. The Applicant

was free to:

a) negotiate her own tariffs (subject to the maximum tariff which, under DVS

rules, could not be exceeded);

b) retain all of the fare paid to her by the customer;

c) market her own services in a personal capacity and for her own benefit; and

d) employ second drivers to drive her taxi-cab at times when she chose not to do

so.

Second driver

86. I considered carefully the question of whether the right to employ a second

driver amounted to a right of substitution in line with the guidelines set out in


JEDT Judgment 29

Pimlico Plumbers. In this regard, it is important to distinguish the rules set out

by the DVS in the PSV Licence and those rules laid down by Red Cabs in

addition to those contained in the PSV Licence.

87. There is no doubt that under the terms of her PSV Licence the Applicant was

entitled to employ a second driver for her taxi-cab, subject only to two

conditions:

a) the Applicant must employ any second driver under a contract of employment;

and

b) the Applicant must send a copy of that contract of employment to the DVS.

88. The Applicant complied with both conditions on 21 March 2016 when she wrote

to the DVS confirming her employment of Mr Doré as her second driver.

89. However, for the purposes of determining whether there existed a genuine right

of substitution on the part of the Applicant for the purposes of the test set out in

Pimlico Plumbers, I examined Red Cabs’ rules and not those contained in the

PSV Licence. The Letter of Authority and the Second Driver Documents were

therefore the key documents in this regard and I considered them together with

the evidence provided by the parties under oath.

90. It was clear to me that the Letter of Authority set out the basic commercial terms

under which the Applicant could affiliate to Red Cabs. Despite its brevity, the

Letter of Authority did address the question of the Applicant’s right under her

PSV Licence to employ a second driver. The Letter of Authority was

unambiguous in stating that the Applicant was entitled to employ a second

driver and identified only one condition with which the Applicant must comply;

that she must abide by DVS regulations ie. she must not break the law. No other

condition was included in the Letter of Authority.


JEDT Judgment 30

91. The Second Driver Documents (and in particular the Notice inferring that Red

Cabs could withhold consent to the Applicant employing a second driver) raised

questions as to whether this was, indeed, a genuine and unfettered right of

substitution.

92. I noted that the Second Driver Documents were administrative in nature. They

required personal data from both the Applicant and the second driver (in this

case, Mr Doré himself). Mr Doré explained that the Second Driver Documents

existed only to ensure that Red Cabs held official records of who was driving

under the Red Cabs Licence, and that they were legally entitled to do so.

93. Mr Doré also gave evidence that the Notice did not have any practical effect; had

the Second Driver Documents not been completed, Red Cabs would not, in

practice, have objected to the Applicant employing a second driver. From the

evidence, particularly in view of the fact that this was a contract of employment

between the Applicant and Mr Doré himself, I am satisfied that this was the case.

But in any event, the condition set out in the Notice was so basic in terms of the

action required by the Applicant that it did not in any material way interfere

with the Applicant’s ability to engage a second driver, thereby enabling her to

use the second driver as a substitute in driving her taxi-cab.

94. I also considered it relevant that, save for complying with DVS rules, there was a

complete absence of any barrier to joining Red Cabs. As Mr Doré put it, Red

Cabs would “take anybody” thus suggesting a lack of concern about who was

affiliated to Red Cabs. In short, Red Cabs did not care who drove the taxi-cabs;

the aim was simply for the drivers to set up a network for the benefit of the

drivers.

95. I therefore concluded that, whether or not the Applicant was obliged to provide

the details contained in the Second Driver Documentation, this condition was not

burdensome for the Applicant and did not materially interfere with her right to


JEDT Judgment 31

employ a second driver. Furthermore, there was no evidence to suggest that the

provision of personal service by the Applicant formed any part of the

arrangement between the Applicant and Red Cabs. In short, the Applicant had

an unfettered right to substitute another person to drive her taxi-cab and this was

inconsistent with her being an ‘employee’.

96. I also concluded that there was no ‘mutuality of obligation’ as envisaged in

Marchem. Quite simply, Red Cabs did not provide work for the Applicant;

instead, it provided the App and enabled the Applicant to enter into direct

contracts with third party customers. The Applicant was entirely free to work as

and when she liked without any specific requirements save that she had to

comply with the DVS rules.

97. I did consider the position regarding the Applicant’s ‘suspension’ by Red Cabs.

The evidence strongly indicated that each ‘suspension’ was a clumsy attempt by

Mr Doré to protect Red Cabs from potential damage from the Applicant’s

behaviour. That said, in ‘suspending’ the Applicant and thereby refusing to

allow her to drive under the Red Cabs Licence for a period of time, Red Cabs was

clearly exercising ‘control’ over the Applicant. However I did not accept the

Applicant’s submission that Mr Doré’s communication with the DVS showed

Red Cabs to be the Applicant’s employer; I accepted Mr Doré’s evidence that, as

sole Director of Red Cabs, the DVS preferred to liaise with him about the issues

they were seeking to resolve with regards to the Applicant. In any event,

whether or not Red Cabs exercised ‘control’ over the Applicant has no material

impact on this case; in the absence of personal service and Marchem mutuality of

obligation, the Applicant can be neither a 1A(2) Employee nor a 1A(3) Employee.

98. Finally, I considered the evidence as a whole and it was abundantly clear to me

that the Applicant was in business on her own account. The evidence

overwhelmingly demonstrated that the Applicant was running her own business

and that she had the freedom to expand that business and run it as she saw fit


JEDT Judgment 32

(subject only to DVS rules). The Applicant’s active marketing of her own

services, her ability to pick and choose her work and to retain fares in their

entirety and the fact that the majority of her work was sourced through her own

efforts rather than through Red Cabs all supported my conclusion that she was

self-employed. Red Cabs was a genuine booking service which the Applicant

used when (and only when) it suited her. Furthermore, correspondence showed

that the Applicant always considered herself to be self-employed and she

ensured that when she decided to employ a second driver, the relevant

authorities were in no doubt as to her employment status. I believe that the

Applicant has been somewhat disingenuous in now submitting that she was an

employee.

99. For all these reasons, I find that the Applicant was not an ‘employee’ of Red

Cabs. Consequently, her complaints may not proceed, and are HEREBY

STRUCK OUT on the grounds that they have no reasonable prospects of success.

Signed: Mrs H G Griffin, Deputy Chairman Dated: 27 March 2017

Judgment and Reasons sent to the parties on

27 March 2017

For the Tribunal Office

Jersey Employment and Discrimination Tribunal · Tribunal Case Number: 1612-D-34/16 JEDT Judgment 4...

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