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HMRC internal manual

Employment Status Manual

Case Law: Airfix Footwear Ltd v Cope

[1978] ICR 1210

Point at issueWhether Mrs Cope was engaged under a “contract of employment” and therefore entitled to claim unfair dismissal under the Trade Union and Labour Relations Act 1974.

FactsThis case concerns a company that supplied parts of shoes, glue and other materials to outworkers for them to make up at home as well as instruction and training. Mrs Cope was one such worker engaged to assemble shoe parts by gluing the various materials together.

Although there was no specific agreement as to where the work was to be done, in practice she worked at home and the patterns and materials were brought to her house at about 4 o’clock each afternoon. Mrs Cope worked each day, five days a week generally, until 12 o’clock and if she had not finished she completed the work the next morning.

She had been doing this work for seven years, generally five days a week, with occasional breaks when demand was low. The work had previously been done in the factory itself, but by agreement or arrangement had been sent to outworkers for this purpose. The Industrial Tribunal originally hearing the appeal found that the volume of work varied from time to time according to seasonal demand.

Payment was on a weekly basis. Mrs Cope was given what were called “wages” and, at the end of the year, a statement referring to the wages she had earned doing outwork.

The company told her not only how to do the work, but also

that the glues were highly inflammable; and

that she must ensure that there was adequate ventilation.

She had no entitlement to holiday pay or sick benefit and there were no provisions as to notice of termination of employment.

DecisionThe Industrial Tribunal found that Mrs Cope worked under a continuing contract of service because of the continuing relationship that had built up over the years. The EAT, in dismissing the company’s appeal, decided that the Industrial Tribunal was entitled to come to that conclusion.

CommentaryIn arriving at its decision the Industrial Tribunal considered that it was necessary to look at all the factors present and decide whether overall they supported a contract of service. It was irrelevant in this particular case whether the individual daily contracts were separate employments or not.

Mr Justice Slynn said

“…….it may well be that if the arrangements between a company and a person are such that …. the company may provide or not, as it chooses and the other person may accept or not, as he pleases, it may well be that this is not properly categorised as a contract of employment. If in such a situation the company only delivers work sporadically from time to time, and from time to time the worker chooses to do it, so that there is a pattern of an occasional week done a few times a year, then it might well be that there comes into existence on each of these occasions a separate contract of service, or contract for services, but that the overriding arrangement is not itself a contract of employment, either of service or for services. But these matters must depend upon the facts of each particular case. “This case confirms the view that an “umbrella” contract can exist if a practice of dealing has built up over the years with expectations and obligations on each side. It was only in respect of the overall contract that the question of mutuality of obligation came into effect, and in this particular case it was considered that this obligation was so overpowering that it meant that no individual contracts had existed.

However, it is often difficult to establish the necessary ongoing mutuality of obligation to change a series of short-term contracts into a single “umbrella” contract. By contrast see the case of Carmichael v National Power plc (see ESM7200).