Case: Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd and others [2006] QB 510
Outcome: discussed
Counsel for the applicants next drew attention to the more recent case in England of Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd and others [2006] QB 510 as '[s]upport for a different approach depending on time and integration on the worksite, albeit in the context of vicarious liability', in the light of what was there postulated by Lord Justice Rix at [80] on the theme of 'practical and structural considerations' in relation to the engagement by a 'temporary employer' of a person who might still be 'recognisable as the employee of his general employer'. His Lordship expressed the following views at [80]: 'One is looking therefore for practical and structural considerations. Is the employee, in context, still recognisable as the employee of his general employer and, in addition, to be treated as though he was the employee of the temporary employer as well? Thus in the Mersey Docks situation, it is tempting to think that liability will not be shared: the employee is used, for a limited time, in his general employer's own sphere of operations, operating his general employer's crane, exercising his own discretion as a crane driver. Even if the right of control were to some extent shared, as in practice it is almost bound to be, one would hesitate to say that it is a case for dual vicarious liability. One could contrast the situation where the employee is contracted-out labour: he is selected and possibly trained by his general employer, hired out by that employer as an integral part of his business, but employed at the temporary employer's site or his customer's site, using the temporary employer's equipment, and subject to the temporary employer's directions. In such a situation, responsibility is likely to be shared. A third situation, where an employee is seconded for a substantial period of time to the temporary employer, to perform a role embedded in that employer's organisation, is likely to result in the sole responsibility of that employer.' Of course the present issue arising is not concerned with identifying where vicarious liability in tort might lie in relation to any imputed 'shared' circumstances of labour hire, as was the case in Viasystems . 94 The further submission of the applicants was that '[t]o the extent that there is any uncertainty over whether the initial arrangements in June/July 2001 put in place a contract of employment between the applicants and [CAO], the evidence as to the full time continuing and exclusive relationship between [them] by 1 July 2002 removes that uncertainty'. By that later time, so the applicants' submission continued, 'it is abundantly clear that the reality of the work circumstances', which I have sought to fully outline in these reasons, 'rendered the relationship between the Applicants and MES as being one essentially relating to "paper" matters, such as the administration of the payroll.' It was said further by the applicants that it was during that later time that the applicants 'had the real relationship' with CAO, it being said to be significant that it was CAO rather than MES which brought about a fundamental change in the applicants' contracts of employment in January 2002. That later time was said to be when the applicants at the direction of CAO 'commenced working a 12 hour shift roster rather than the 8 hour rosters they worked prior to this time'. By 'real relationship' however, the applicants' emphasis was upon circumstances continuing in substance and reality upon the basis of a hire of labour pursuant to a contractual arrangement between CAO and MES. 161 The differing approach of Munby J, as the third member of the Court of Appeal in Brook Street , adopted at [83] what CAO described as a more conventional position in terms of authority. His Lordship's starting point was that 'the mere fact that there is a contract between the worker and the agency, and another contract between the agency and the end-user, plainly does not prevent there also being a contract between the worker and the end-user. Nor, of itself, does it prevent any contract between the worker and the end-user being a contract of service'. That approach is more in line with Australian authority and also with the United Kingdom approach taken subsequently in Viasystems in relation to what was described in the concluding sentence of [80] by Rix LJ . Where Munby J's reasoning departed at least implicitly from the approach of the other members of the Court of Appeal was in his isolation at [83] of two critical elements of an employment relationship, namely 'the obligation to remunerate and the right to control' . Munby J cited authority stating that the 'mutuality of obligation and the requirement of control on the part of the potential employer [are the] irreducible minimum for the existence of a contract of employment '. His Lordship further cited authority to the effect that ' [t] he significance of mutuality [is] that it determines whether there is a contract in existence at all' , and that ' [t] he significance of control [is] that it determines whether, if there is a contract in place, it can properly be classified as a contract of service, rather than some other kind of contract' . Moreover Munby J considered at [87] that ' [t] he requirement that there be mutuality of obligation necessarily focuses attention on the obligations (if any) undertaken by the end-user ', which his Lordship described as not inclusive of any obligation 'to provide the servant with work in addition to wages' , any such latter obligation being 'not very often to be found expressed in written contracts of employment' .