Massey v Crown Life Insurance Co

[1978] 2 All ER 576

Between: Massey
And: Crown Life Insurance Co

Court of Appeal, Civil Division

Lord Denning MR
Lawton LJ
Eveleigh LJ

Subject References:
Excluded classes of employment
Employment under contract for services
Employer and manager agreeing for tax purposes that manager to be self-employed in the future
Inland Revenue accepting arrangement
Manager operating under firm name rather than own name
Manager continuing to perform same duties as before
Manager dismissed and bringing claim for unfair dismissal
Whether manager an individual who has entered into or worked under a contract of employment
Whether manager an 'employee'
Distinction between contract of service and contract for services
Declaration of parties
Intention of employer and manager to change manager's status to self-employed for the purposes
Genuine agreement with explicit terms
Whether parties' agreement conclusive in determining status of manager

Legislative References:
Trade Union and Labour Relations Act 1974 - s 30(1) Sch 1, para 4(1)

Case References:
Alexander v Rayson - [1936] 1 KB 169; [1935] All ER Rep 185; 105 LJKB 148; 154 LT 205, CA
Construction Industry Training Board v Labour Force Ltd - [1970] 3 All ER 220; 5 ITR 290, DC; Digest (Cont Vol C) 685, 226a
Davis v New England College of Arundel - [1977] ICR 6, EAT
Ferguson v John Dawson & Partners (Contractors) Ltd - [1976] 3 All ER 817; [1976] 1 WLR 1213; [1976] 2 Lloyd's Rep 669, CA
Global Plant Ltd v Secretary of State for Social Services - [1971] 3 All ER 385; [1972] 1 QB 139; [1971] 3 WLR 269; Digest (Cont Vol D) 707, 6c
Graham (Maurice) Ltd v Brunswick - (1974) 16 KIR 158, DC
Inland Revenue Comrs v Duke of Westminster - [1936] AC 1; [1935] All ER Rep 259; 104 LJKB 383; 153 LT 223; sub nom Westminster (Duke) v Inland Revenue Comrs 19 Tax Cas 490, HL; 28(1) Digest (Reissue) 507, 1845
Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance - [1968] 1 All ER 433; [1968] 2 QB 497; [1968] 2 WLR 775; Digest (Cont Vol C) 722, 6b
Stevenson Jordon and Harrison Ltd v MacDonald and Evans - [1952] 1 TLR 101; 69 RPC 10, CA; 28(2) Digest (Reissue) 1086, 906
Challinor v Taylor - [1972] ICR 129; 116 Sol Jo 141
Comrs of Customs and Excise v Pools Finance (1937) Ltd - [1952] 1 All ER 775, CA
Evenden v Guildford City Association Football Club Ltd - [1975] 3 All ER 269; [1975] QB 917, CA
Hammett v Livingstone Control Ltd - (1970) 5 ITR 136
Market Investigations Ltd v Minister of Social Security - [1968] 3 All ER 732; [1969] 2 QB 173
Morren v Swinton and Pendlebury Borough Council - [1965] 2 All ER 349; [1965] 1 WLR 576, DC
Napier v National Business Agency Ltd - [1951] 2 All ER 264; 44 R & IT 413, CA
Watling v William Bird & Son Contractors Ltd - (1976) 11 ITR 70

Hearing date: 2-4 November 1977
Judgment date: 4 November 1977

The appellant was employed as a branch manager by the respondents, an insurance company, from 1971 until 1973 under two contracts, under one of which he was treated as an employee and under the other as a general agent. Under his contract as an employee the appellant was paid wages by the respondents from which PAYE tax and contributions to the respondents' pension scheme were deducted, and he received a memorandum under the Contracts of Employment Act 1963. Under the general agency contract the appellant was a freelance agent paid on commission only and free to work for other insurance brokers. In 1973 the appellant, who wished to be taxed as a self-employed person, approached the respondents with a view to coming to a new arrangement with them. The respondents agreed and the parties entered into a new agreement whereby the appellant called himself 'John L Massey and Associates', a name which he registered under the Registration of Business Names Act 1916. Under the new agreement John L Massey and Associates were appointed manager of the appellant's branch, the appellant was repaid his contributions from the respondents' pension fund, and was thereafter paid by the respondents without tax or other deductions being made. The appellant arranged with the Inland Revenue to be treated as a self-employed person for tax purposes. Under the agreement John L Massey and Associates were allowed to employ other persons in the course of their work, but the appellant's duties vis-à-vis the respondents remained almost indentical to his previous duties. In 1975 the appellant was dismissed by the respondents with one month's notice.

The appellant made a complaint to an industrial tribunal of unfair dismissal. The tribunal considered, as a preliminary issue, whether the appellant was entitled to make a claim for unfair dismissal under the Trade Union and Labour Relations Act 1974, para 4 of Sch 1 to which extended the right not to be unfairly dismissed only to an 'employee', which by s 30(1) [F1] was defined as 'an individual who has entered into or [has worked under] a contract of employment'. A contract of employment was further defined as a 'contract of service ... whether it is express or implied and (if it is express) whether it is oral or in writing'. The tribunal held that the work which the appellant performed for the respondents was not performed under a contract of employment. The appellant appealed to the Employment Appeal Tribunal which dismissed his appeal. He appealed to the Court of Appeal contending that his relationship with the respondents had remained throughout that of employer and employee regardless of what he chose to call himself or the way in which he was assessed to tax.


The appellant could not say that for the purpose of claiming tax advantages he was not an employee and then say that for the purpose of claiming compensation for unfair dismissal he was an employee. The 1973 agreement was a genuine transaction which had been aimed to effect, and did in fact effect, a change in the appellant's status from that of an employee to that of a self-employed person, and he was not therefore an 'employee' within the meaning of s 30 of the 1974 Act and could not bring a claim for unfair dismissal under the Act. Accordingly the appeal would be dismissed (see p 580 b c and g h, p 581 a and c to e, p 582 f to j and p 583 a, post).

Ferguson v John Dawson & Partners (Contractors) Ltd [1976] 3 All ER 817 distinguished.


For the right of an employee not to be unfairly dismissed, see 16 Halsbury's Laws (4th Edn) para 615.

For the distinction between a contract of service and a contract for services, see ibid para 501.

For the Trade Union and Labour Relations Act 1974, s 30(1), Sch 1, para 4, see 44 Halsbury's Statutes (3rd Edn) 1781, 1787.


This was an appeal by John Linnell Massey against a decision of the Employment Appeal Tribunal (Kilner Brown J, Mr A C Blyghton and Mr A J Nicol) dated 30 November 1976, dismissing his appeal against a decision of an industrial tribunal (chairman C H A Lewes) whereby the tribunal determined, on a preliminary issue, that the appellant could not pursue a claim for unfair dismissal against the respondents, Crown Life Insurance Co, because he was not 'employed' by them at the date of his dismissal. The facts are set out in the judgment of Lord Denning MR.

Alistair Sharp for the appellant.

Anthony Boswood for the respondents.

4 November 1977. The following judgments were delivered.