St Ives Plymouth Ltd v Haggerty

Factual and Procedural Background

This case concerns whether an Employment Tribunal was entitled to find that mutual obligations subsisted between an employer and a casual employee during periods when the employee was not engaged on any particular shift. The Plaintiff was employed as a bindery assistant by the Defendant, a company printing books and magazines, which employed permanent staff supplemented by casual and agency workers. The work was variable and assigned on short notice.

The Tribunal found that while the Plaintiff was working a shift, a contract of employment existed. Casual workers could accept or decline shifts without penalty, but there was an expectation of mutual cooperation: the employer expected the casual workers to honour accepted shifts, and the casual workers expected to be offered a reasonable amount of work. The Plaintiff resigned following disciplinary action after an incident on a shift and brought a claim for constructive unfair dismissal.

It was common ground that the Plaintiff was employed under a contract during actual work periods. The Tribunal found that an overarching "umbrella" contract existed covering periods between shifts, enabling the Plaintiff to claim continuity of employment for unfair dismissal purposes. This finding is the subject of the appeal.

Legal Issues Presented

1. Whether mutual obligations existed between the employer and the casual employee during periods when the employee was not working, sufficient to establish an overarching contract of employment.
2. Whether the expectation of being offered and performing a reasonable amount of work can constitute a binding legal obligation despite the absence of a duty to accept any particular shift.
3. The appropriate application of precedent regarding umbrella contracts and mutuality of obligation in casual or irregular employment contexts.

Arguments of the Parties

Appellant's Arguments

• The Tribunal confused the parties' expectations with binding legal obligations.
• The parties’ conduct could be explained by mutual commercial interests and goodwill rather than contractually binding duties.
• The fact that casual workers might be removed from the bank for refusing work or that the employer sought to allocate work regularly does not create legal obligations to provide or accept work.
• Reliance on the House of Lords decision in Carmichael & Anor v National Power, where no umbrella contract was found due to absence of mutual obligations during non-working periods.

Appellee's Arguments

• The Tribunal was entitled to find an umbrella contract based on mutual obligations evidenced by a course of dealing and expectations of reasonable work offers and acceptance.
• Expectations of the parties, while not legal obligations per se, can be relevant and in appropriate cases give rise to enforceable obligations.
• Reliance on Cotswold Developments v Williams and Nethermere (St Neots Ltd) v Gardiner supports the existence of mutual obligations arising from regular dealings and practices.
• The Employment Appeal Tribunal (EAT) should only interfere if no reasonable tribunal could have reached the conclusion found by the Employment Judge.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court examined whether the Tribunal was entitled to find mutual obligations sufficient to establish an umbrella contract covering periods when the Plaintiff was not working. It acknowledged the established legal principle that mutual obligations must subsist during gaps in work, citing Carmichael as authoritative.

The Tribunal had found that while there was no obligation to accept any particular shift, there was an expectation on both parties: the employer to offer a reasonable amount of work, and the employee to accept reasonable work offered. The Court recognized this as a borderline case but concluded that such expectations, reinforced by the practical commercial realities and the parties’ conduct over a lengthy period, could crystallize into legal obligations.

The Court distinguished this case from Carmichael by emphasizing the longer-term, regular nature of the Plaintiff’s work and the employer’s interest in maintaining the casual workforce. It also considered the reasoning in Nethermere, where a course of dealing and mutual expectations were sufficient to establish mutual obligations despite flexibility.

The Court rejected the appellants’ argument that commercial convenience and goodwill alone explained the relationship, finding that the Tribunal was entitled to infer legal obligations from the factual substratum. The Court noted that disciplinary proceedings, while not determinative, supported the existence of ongoing obligations.

Although one judge dissented, viewing the relationship as one of mutual convenience without contractual obligations, the majority held that the Tribunal’s conclusion was a permissible factual finding. The Court emphasized that the question was one of fact, not law, and that the Tribunal properly directed itself on the legal test.

Holding and Implications

The appeal was DISMISSED. The Court held that the Employment Tribunal was entitled to find that mutual obligations existed between the parties during periods when the Plaintiff was not working, thus establishing an umbrella contract of employment.

This decision means that the Plaintiff’s claim for constructive unfair dismissal can proceed on the basis of continuity of employment under the umbrella contract. The Court did not establish new legal principles but reaffirmed that a course of dealing and mutual expectations can, in appropriate cases, give rise to enforceable mutual obligations in casual employment relationships.