Judgment - Kelly v. Northern Ireland Housing Executive
Loughran v. Northern Ireland Housing Executive (Northern Ireland) (Conjoined Appeals)

(back to preceding text)

      I cannot, however, agree that the Interpretation Act 1978 should be applied to achieve the same result. It seems to me that the language of the statute is aimed at giving protection to individuals and not to companies or unincorporated corporations. The protection is afforded to those who enter into a contract of service or apprenticeship; these are clearly references to individuals; it is extended to those who contract personally to execute work or labour, which I read again as referring to individuals. It would be a wholly unnatural use of language to say a company or corporation had personally agreed to carry out work. Furthermore I foresee that the most formidable difficulties in the practical application of the Act would be likely to arise if Tribunals were called upon to decide on the religious beliefs or political opinions of companies or corporations. I am satisfied that the context in which the phrase "contract personally to execute any work or labour" appears in the Act precludes the application of section 5 and Schedule 1 to the Interpretation Act 1978.


My Lords,

      I do not repeat the facts which are set out in the speech of my noble and learned friend, Lord Slynn. The first question is whether the applicants have brought themselves within the terms of section 17 of the Fair Employment (Northern Ireland) Act 1976. The Fair Employment Tribunal have answered this question in favour of the Northern Ireland Housing Executive, for reasons set out fully and clearly in their unanimous decision dated 18 April 1996.

      There is an appeal from a decision of the tribunal to the Court of Appeal on a question of law. The Court of Appeal upheld the decision of the tribunal in the case of Mrs. Kelly, but reversed the tribunal's decision in the case of Mr. Loughran. Unfortunately the judgment does not spell out the error of law which the Court of Appeal must have identified. But it would seem likely that the Court of Appeal disagreed with the tribunal in its application of the law to the facts in Mr. Loughran's case, on the ground that he was a sole practitioner, and would have been the designated solicitor if his firm had been appointed to the panel.

      For my part I can find no error of law in the tribunal's reasoning, nor in its application of the law to the facts of these cases. I would therefore restore the decision of the tribunal.

      The tribunal started with section 17 itself, and pointed out, correctly in my view, that the Northern Ireland Housing Executive could only be guilty of unlawful discrimination if the Executive is an "employer," and the two applicants were "employees," that is to say, persons seeking employment within the meaning of section 57(1)(a) of the Act. It is the person entering into the contract of employment who is entitled to be protected under section 17 of the Act. This is obvious in relation to contracts of service and contracts of apprenticeship. It is equally obvious in relation to an employee seeking employment under a contract for personal services within the extended definition of section 57.

      Similarly it is the person who is seeking employment under the contract for personal services who is contemplated as performing those services as "employee." This again is obvious in the case of a contract of service or apprenticeship. In my view it is equally obvious in the case of a contract for personal services. There is nothing in section 57 which suggests that section 17 extends to a contract made by A for the performance of personal services by B.

      So much would, I should have thought, be uncontroversial. It is well set out in the following passage from the decision of the tribunal at paragraph 4:

     "It seems to us to follow from that definition [section 57] that the person who was personally to execute the work or labour must be the person employed under the contract by which the employer was entitled to benefit. It does not suffice for the applicant to show that this contract would be performed 'personally' by someone else if that someone was not a party to the contract."

      I agree. In support of their view the tribunal quoted the following passage from the judgment of Balcombe L.J. in Mirror Group Newspapers v. Gunning [1986] 1 W.L.R. 546, 556:

     "However I do accept Mr. Irvine's alternative submission that the phrase in its context contemplates a contract whose dominant purpose is that the party contracting to provide services under the contract performs personally the work or labour which forms the subject matter of the contract."

      So the only question is whether the contracts which would have been made in these cases were made with the persons who would have performed the personal services covered by the contracts. In the case of Mrs. Kelly the answer must surely be no. The application form draws a clear distinction between the firm and the designated solicitor. It is the firm which takes overall responsibility. But it is the designated solicitor who is responsible for carrying out the work. That is why the qualifications and relevant experience of the designated solicitor are as important as the qualifications of the firm.

      The distinction between the firm and the designated solicitor is even more apparent in the covering letter dated 24 May 1994 sent to potential applicants. It provides:

      Any Northern Ireland solicitors' firm is eligible for consideration provided that:
     (1) The principal/one of the principals has been in practice on his/her own account for three years;
     (2) The solicitor(s) who would actually carry out panel work has/have at least three years post qualification experience;
     (3) The solicitor(s) would give priority to Executive work;
     (4) The firm has substantial relevant experience of acting for defendants."

      The same distinction also runs through the form of contract between the Executive and the successful applicant, from which it is clear that it is the firm which is appointed to the panel and agrees to abide by the Executive's Standard Conditions of Retainer, but it is the designated solicitor who is to give priority to panel work.

      Had Mrs. Kelly's firm been successful in the application for appointment to the panel, the contract would have been with the firm, but the actual work would have been performed by Mrs. Kelly as the designated solicitor. If one assumes for a moment that Mrs. Kelly had been an assistant solicitor, and not a partner, it seems clear enough that she could not have complained. The contract would not have been with her. Nor could the firm have complained, since a firm (as distinct from an individual) cannot agree to execute work personally.

      My noble and learned friend Lord Slynn of Hadley considers that a firm can complain, and he relies in that connection on the definition of "person" contained in section 5 and schedule 1 of the Interpretation Act 1978. But the definition makes no sense in the context of sections 17 and 57 of the Act of 1976. A company, like an individual, can undertake to execute work or perform services. But a company cannot execute work personally. Nor can a partnership, or other unincorporated body of persons. The attempt to read in the definition from the Interpretation Act gives no effect to the word "personally"; yet the inclusion of that word in the definition cannot be ignored, or given less than its full force. Thus far I find myself in complete agreement with my noble and learned friend Lord Griffiths.

      Does it then make any difference that Mrs. Kelly was not an assistant solicitor, as I have assumed, but a partner? In my view this makes no difference. I accept, of course, that in England (though not in Scotland) a firm is not a legal entity distinct from its partners, and that in the eye of the law a contract made with the firm is a contract made with the existing partners individually. But Parliament cannot have intended that section 17 should apply to some partnerships but not others, according to whether the person actually carrying out the work is a partner or not. In many cases a potential employer would not even know (unless he inquired) whether the person carrying out the work was a full partner, a salaried partner, or an employee. Moreover the status of the person carrying out the work might change. Thus if in the present case Mrs. Kelly had been an assistant solicitor at the time of the contract she could not have complained, even though she was due to become a partner within a month or a week. The liability of a potential employer for unlawful discrimination should not depend on such chances as these. In her complaint Mrs. Kelly describes herself as having applied for the job in question. But except in the most technical and refined sense this was not the case. It was the firm who applied, and not Mrs. Kelly, as indeed my noble and learned friend Lord Slynn acknowledges.

      So far as Mrs. Kelly is concerned, therefore, I agree with the Court of Appeal, and respectively disagree with the majority of your Lordships. Mrs. Kelly falls outside the protection afforded by section 17. I cannot put it better than it was put by the tribunal in the following passages:

     "We have studied the agreed facts in the case together with the documentation attached to those facts and the oral evidence adduced. In our opinion there is an irresistible inference that the dominant purpose of the contract was not that a contracting party would personally execute the work or labour but that a designated solicitor would do so. It may well be that in some cases there would be no difference between the designated solicitor and the contracting party. Indeed clearly the applicant, Oliver Loughran, would fall within that category as also would the applicant Bernadette Kelly. We see that as fortuitous rather than purposeful and unrelated to the dominant purpose of the contract. The same contract--terms and conditions--cannot have a different 'dominant purpose' because of the identity of the contracting party--at least not without some clear reference."

      The second passage is as follows at paragraph 7:

     "We have no doubt that the dominant purpose of the contracts was that one or two designated solicitors would have primary responsibility for carrying out the work. It was not the dominant purpose that this work would be carried out by principals or parties. The fact that some firms may have chosen to make principals or parties 'primarily responsible for carrying out the work' - or even indeed that some firms may not have had an alternative--is not to the point. Accordingly we unanimously believe that the applicants have not shown that the respondent was 'an employer' within the meaning of section 17 of the Fair Employment (Northern Ireland) Act 1976."

      As I have already said, I can find no error of law in the tribunal's reasons, nor in the conclusions set out in paragraphs 7(j) and (k) of the Case Stated for the Opinion of the Court.

      As for Mr. Loughran, the Court of Appeal drew a distinction between his case, and that of Mrs. Kelly on the ground that Mr. Loughran was "in substance" seeking to have himself appointed to the panel. The Court of Appeal did not regard this as a desirable distinction, and nor do I. But whereas the Court of Appeal felt constrained to reach an undesirable conclusion by the language of section 57, I do not myself feel the same constraint. Parliament cannot have intended the application of section 17 to depend on the number of partners in the firm.

      On the second question, I agree with my noble and learned friend Lord Slynn that appointment to the panel is not a "qualification" for the purposes of section 23 of the Act.

       For the reasons I have given I would dismiss the appeal in the case of Mrs. Kelly, but allow the appeal in the case of Mr. Loughran.


My Lords,

      I have had the advantage of reading in draft the speech of my noble and learned friend, Lord Slynn of Hadley. For the reasons he gives I would also make the order he proposes.


My Lords,

      These two appeals concern the proper application of section 17 of the Fair Employment (Northern Ireland) Act 1976. The purpose of that Act is serious and important, seeking as it does to check the evils of discrimination on religious or political grounds. But the language of legislation may be incapable of achieving a complete solution to a problem which perhaps can only be truly resolved by changes in personal attitudes and the development of a wider vision; and while the intention of the legislator may in its generality be clear the language should not be subjected to violence or strain in order to extend the application of the statute to cases which are beyond its scope.

      The Act sought to establish an Agency with a view to promoting among other things, to use the language of the long title, "equality of opportunity in employments and occupations in Northern Ireland between people of different religious beliefs." The provisions of the Act are directed in particular to employment and it seeks to check discrimination by employers. Thus in particular Section 17 details the acts in which in relation to employment in Northern Ireland it is unlawful for an employer to discriminate against a person. The person may be (a) seeking employment or he may be (b) employed by the employer. So the section is dealing with a potential or an actual employment and it then becomes critical to ascertain what is meant by employment.

      The word is defined in section 57. Clearly from that section employment involves a contract. The contract may be of service or it may be a contract of apprenticeship or it may be a contract "personally to execute any work or labour." Neither of the first two possibilities apply in the present appeals.

      The language used to describe the third case is language which has been used elsewhere in legislation and should presumably be taken to carry with it the interpretation which it receives in the other contexts in which it appears. In the context of the Equal Pay Act 1970 and the Sex Discrimination Act 1975 it was recognised in Quinnen v. Hovells [1984] I.C.R. 525 that "the concept of a contract for the engagement of personal work or labour lying outside the scope of the master-servant relationship is a wide and flexible one" and so extended to one who was self-employed. In Tanna v. Post Office [1981] I.C.R. 374 in the context of the Race Relations Act 1976 the work of a sub-postmaster was held not to fall within the definition of "employment", which was in the same terms as in the Act before us, because while a sub-postmaster required to provide premises and ensure that services were provided by the Post Office to the public, there was no provision requiring him to do anything personally. The appeal tribunal in its judgment said (at p. 377) of the third head in the definition:

     "It is a contract personally to execute any work or labour. That, it seems to us, quite plainly requires that the person entering into a contract shall himself be under an obligation personally to do work or labour. It may well be that some of what he undertakes to do he may delegate, but in our judgment it is essential, for there to be 'employment', that the person making the contract shall himself undertake to do, at any rate some of the work or labour."

      This critical part of the definition then relates to a contract with someone under which that person is to do at least some of the work himself. It may not be intended that he should do every bit of the work personally. But it is a contract which seeks to secure his particular individual participation as the principal and major contribution to its performance. This point has been expressed in terms of a dominant purpose. In Mirror Group Newspapers Ltd. v. Gunning [1986] 1 W.L.R. 546 it was recognised that the kind of contract which was contemplated under the Sex Discrimination Act 1975 was not only one where the sole purpose was that the party contracting to provide services under the contract would personally perform the work or labour in question but one where that was at least the dominant purpose. Thus the agency for the distribution of newspapers in the circumstances of that case fell outwith the scope of such a contract. The engagement of a portrait painter personally to paint a portrait would fall within the definition even if it was contemplated that some minor work would be carried out by an assistant in his studio. The work need not be intended to be performed exclusively by the contracting party. But an arrangement with the painter that the portrait would be painted by one of assistants would not be a contract with the painter personally to paint a portrait.

      The proposed contract in the present appeals was not such a contract. What it sought to do was to secure the appointment of a particular solicitor's business enterprise with a view to the giving of instructions in the future for the conduct of litigation in which the Executive would be involved. The Executive was also concerned to identify individual practitioners in the solicitor's business. It was not concerned to see that the party with whom it made the contract was the individual who would himself or herself predominantly do the work. As the tribunal described it, it would be fortuitous if the same person was both the contracting party and the person who was principally to do the work. The proposed appointment was not one under which the appointee was personally to execute work, but only one under which the appointee would be able to make arrangements for the personal execution of work by one of the solicitor members of the business. Under the construction which has been given to the critical phrase the offer of appointment which was made in the present case does not seem to me to fall within the scope of the definition.

      The question has arisen whether the word "person" in the definition of "employee" may include not only individual people but bodies corporate, such as limited companies and partnerships. The question does not in my view require to be determined in this case but it must depend upon a construction of the statute and in particular the terms of the definitions. I would only observe that while the employer may readily include a person which is a body corporate, it is less easy to see that a corporate body was intended to be included as an employee. Even if it could carry out employment under a contract of service it would not readily rank as an employee under a contract of apprenticeship. And so far as the third head is concerned, even if in this context "personally to execute" can be construed as meaning a corporate performance, what was proposed in the present case was not a performance by the firm which entered into the contract but mainly by a designated solicitor who might or might not be the representative of the firm who entered into the contract.

      The alternative approach which was adopted by the two applicants in the present appeals depended upon section 23 of the Act. That section relates to situations where someone has a power to confer a qualification. The word "qualification" is defined in section 57 by examples, largely reflecting the forms in which a qualification may be conferred. The qualification must be something which is needed for or facilitates a person's engagement in employment in any capacity. Plainly the section covers such matters the registration of architects or doctors, and the enrolment of solicitors. Admission into membership of a recognised authority in the field in which the person is working which carries with it the stamp of that authority's approval may also be covered, as in Department of the Environment for Northern Ireland v. Bone (unreported, 15 September 1993) to which we were referred. But the reference made by the Court in that case to the conferring of some sort of status may be dangerous as distracting one from the statutory requirement. A professional qualification within the section may give status, but the fact that status may follow upon an appointment does not necessarily mean that the appointment is one to which the section relates.

      Section 23 is concerned with the exercise or non-exercise of a power to confer a qualification such as is envisaged in the section. That is something more than a decision to demand a particular qualification before accepting someone as a recognised practitioner for the purposes of particular operations (Tattari v. Private Patients Plan Ltd. [1998] I.C.R. 106). It is also something more than selecting someone to provide for oneself the professional services which that person is already qualified to perform. The executive was not here exercising a power to grant qualifications and their selection of and retaining of particular firms to do their litigation work did not fall within the scope of section 23.

      In the circumstances I do not consider that the offers of appointment with which these two appeals are concerned fall within the scope of the Act. I would accordingly allow the appeal by the Executive in the case of Oliver Loughran and refuse the appeal by Bernadette Kelly.


Lords Parliament Commons Search Contact Us Index

© Parliamentary copyright 1998
Prepared 29 July 1998