Section 5 and work relationships pretending not to be employment
At the other end of the power spectrum one finds more chicanery. The modern curse of ‘fake self-employment’, according to which a person finds that his contract says that he is not an employee or involves a ‘zero hours’ commitment, or that her contract asserts that she provides services to another, the contract as often as not setting out wholly one-sided rights and duties, and offering the most paltry of rewards, has taken hold like a virus. It is not necessary to mention the names of companies which have decided to wash their hands of the usual obligations of the employer while claiming, in a virtuoso display of hypocrisy, to have freed the workers from the chains of employment. The courts dealing with more mainstream employment law disputes have sometimes been prepared to see through such pretences; this has not yet been required in relation to Section 5. However, the test of subordination is one of substance; if Holterman and Bosworth stand for anything, it is the right and duty of a court to look behind the formal or written contract to see what the reality of the work really is. If a person was so powerless that he had no choice but to sign a contract designed to show, and maybe even to aver, that he is not an employee, it is hard to think what better evidence of subordination a court may hope to find.
Another facet of modern labour law can be seen in cases in which A makes a contract with B Co which then supplies A’s labour to C Pic. The simple, bilateral, relationship of employer and employee is replaced by something more complicated. There is nothing inherently wrong with that in a case such as Weber v Universal Ogden Services,'5 in which the employer’s very business was in providing skilled and less-skilled staff to associated and other clients who were scattered and whose business genuinely made it inappropriate to retain such staff on full-time contracts. It is not so easy to take that view of what some of still think as the public services, in which non-employees of that service (NHS hospitals, for example) do so much of the work which hospital employees used to do; and calling the loathsome practice ‘outsourcing’ makes it no more respectable.
This organisational structure may well raise the question of who is to be seen as an employer. In one case,[1] certain cabin crew required to attire themselves in the uniforms of an airline were in fact employed by an Irish company which assigned them and their labour to the airline and, as it appeared, to no other entity. In a claim brought against the Irish company the European Court accepted that the individuals were employees of the Irish company, and dealt with the jurisdictional issue, of finding where the employees habitually carried out their work, on that basis. The individuals’ relationship with the airline was not specifically commented on, the Advocate General merely referring to the airline as ‘the person who benefits from the work done’. The outcome was satisfactory, given that the individual wished to sue the Irish company, though it might have been otherwise if it had occurred to those who organised this scheme to have it established under the laws of some faraway flag of convenience. Still, it seems to mean that the employer is the contractual counterparty to a contract whose content is one of employment, and that this has not yet been held to include an associated entity which is not in a direct contractual relationship with the labourer but which simply ‘benefits from the work done’.
A third facet of employment law may be seen in some areas of economic activity in which a person who is admitted to be an employee may be required to be party to more than one contractual relationship, these being interdependent but legally distinct. The fundamental question is, once again, whether to respect, or to be prepared to look past, the formal contractual structures put in place to secure the labour of the employee and entrench his loyal performance; here, at least, the English courts have been prepared to look behind the façade to see the ‘reality’. In Samengo-Turner v J&H Marsh & McLennan (Services) Ltd'3 it was held that an ‘incentive agreement’, concluded between an employee and a company associated with the employer, was to be treated as though it was, or was all part of, an individual contract of employment. The court took this approach to deprive an agreement on jurisdiction contained in the ‘incentive agreement’ of effect by virtue of its failure to meet the conditions in Article 21. And in Duarte v Black & Decker Corp it was held, in effect, that if the relationship between company and worker was one of employment, a separate agreement which was entered into within the broad context of that employment was itself to be seen as a contract of employment. Proceedings brought in respect of a separate agreement not to disclose confidential information, concluded in such circumstances, may therefore ‘relate to’ a contract of employment for the purpose of the Convention. But if this is correct, and an ‘individual contract of employment’ will be understood to mean and include any” contract which forms part of the contractual relationship of individual employment, its scope may be surprisingly wide.
The question of which relationships fall within Section 5 of Title 11 is in practice only a small and peripheral part of the much larger question whether modern working relationships may be regarded as employment when they claim not to be, or may be regarded as not employment though they claim to be. For further detail it will be necessary to consult a specialist work on European employment law.
- [1] C-168/16 Nogueira v Crewlink Ireland Ltd and C-169/16 Moreno Osacar v Ryanair Designated Activity Company (joined cases) EU:C:2017:688, [2018] ICR 344. 2 Perhaps this is part of the reason why the reach of Section 5 of Chapter II of Regulation 1215/2012 was extended to allow employers not domiciled in a Member State to be sued in a Member State on the authority of the Regulation itself, rather than having this depend on the variable geometry of national laws on service out and the like. 3 [2007] EWCA Civ 723, [2008] ICR 18 (on which, see [2007] LMCLQ 433); Petter v EMC Europe Ltd [2015] EWCA Civ 828, [2016] ILPr 5; Cunico Resources N V v Daskalis [2019] EWHC 57. 4 This is open to criticism at several levels. But to the extent that it closes a door to a possible evasion of Art. 23 by crafty employers, there is a pragmatic defence of it to be made. The question whether the court was right to read what is now Art. 21 as regulating a jurisdiction agreement for an American court is considered below. 5 [2007] EWHC 2720 (QB), [2008] 1 All ER (Comm) 401 (a case on choice of law, not jurisdiction). 6 Another way to make the same point would be to reason that if, on the facts, this obligation would have not bound the parties if there had been no contract of employment to which they were (also) bound, the obligation is one which relates to the employment; ¿/C-548/12 Brogsitter v Fabrication de Montres Normandes EURL EU:C:2014:148, [2014] QB 753.
