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Winter v. Westward Television Ltd [1978] EAT/589/77 (Unreported) Employment Appeal Tribunal The Hon. Mr Justice Philips (President) Unfair Dismissal Facts Mr Winter, the appellant, was a film and television production executive. On the 6th September 1976, arrangements were made between Mr Winter and Westward Television Limited (Westward) for a six month contract which ended on 4th March 1977. At the end of the term, Westward did not re-new Mr Winter's contract. Mr Winter then claimed unfair dismissal. The issue at point at the Industrial Tribunal was whether or not Mr Winter was an employee. The Industrial Tribunal found against Mr Winter, that he was not an employee. Mr Winter then appealed against this decision to the EAT. EAT At the EAT, the point of issue was the situation that Mr Winter had contracted with Westward through his limited company Samian Galleries Limited (Samian). The company was controlled and beneficially owned by Mr Winter and his wife and his services were made available through this company. Under the terms of the contract, Samian was to provide the exclusive services of Mr Winter to Westward, who was to act as a drama adviser under the direction of Westward's production controller. The remuneration was paid to Samian on receipt of invoice and in Clause 6 "Mr Winter [agreed] to acknowledge and abide by the rules and regulations in force as applied to Westward's staff." It was considered by the EAT that the facts found by the Industrial Tribunal were in no doubt as to the validity of the contract. Philips J stated that "...this arrangement, under which his services were made available to Westward, was a deliberate decision on the part of Mr Winter and his advisers and that, therefore, it is quite impossible to suggest, and indeed it has not been suggested, that this is in any sense a sham, or false device, or anything of that kind. In other words the document is a genuine contract between Westward and Samian." Philips J continued "...on the face of the contract and on other documents, there was no contractual relationship of any kind between him and Westward." Mr Irvine QC1, for the appellant, put the argument across that Samian was the alter ego of Mr Winter and that in certain circumstances it is right to ignore the separate corporate existence of the company. Indeed, Irvine QC purported, Westward knew that at all times perfectly well that Samian did not control Mr Winter, in fact, Westward did. The EAT, however, found this argument uncompelling. Philips J stated: "We can find no justification in the circumstances of this case for ignoring the effect of the transaction actually entered into and contained in the contract." Mr Irvine's second argument was that the total effect of what was done was to transfer the employment of Mr Winter from Samian to Westward, in reliance on Clause 6. Whatever the actual contract itself stated, "...the whole of the surrounding circumstances taken together are such that there was an additional contract between Mr Winter and Westward." Irvine submitted. The EAT again rejected this argument on the basis that "...it seems to us that it would be quite impossible to infer from the circumstances some relationship of employer and employee. The principal reason being that it is never right to infer a legal relationship when it is inconsistent with what the parties themselves have expressly agreed." Philips J noted that the arrangement had given Mr Winter the benefit of the 'fiscal advantages' of a limited company. In the third argument Irvine stated that the court should not be "...beguiled by the form of the transaction, but to concentrate on the substance of the transaction, the substance of the transaction being that Mr Winter was an employee of Westward." This argument again fell foul of the EAT and the court considered that the truth was that the form and the substance were one and the same. Samian and Westward had deliberately entered into "...a particular transaction of a particular type for a particular purpose." Hypothetical Contract The EAT went on to consider an issue which the Industrial Tribunal had dealt with, the hypothetical contract. The Industrial Tribunal had considered "...in a hypothetical manner, what would have been the position if, contrary to the case, Mr Winter had been in contractual relationships with Westward and if, as it were, it had been right to substitute him for Samian." The EAT stated that they did not propose to follow the Industrial Tribunal in that path "...it is an almost impossible path to tread because it involves making a hypothesis which is an invalid one to make." The reason it was invalid, according to the EAT, was because if Mr Winter had entered into terms with Westward it would have been on different terms from the contract entered into by Samian. "It is really quite unreal, hypothetically to consider what the situation would have been had Mr Winter contracted in identical terms to those in which Samian in fact did." Philips J. Judgment Accordingly, the EAT agreed with the conclusions of the Industrial Tribunal that Mr Winter was not an employee. |
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