· A term requiring residence will only be implied by the court where
this is essential for the employee to carry out his duties
· The Court of Appeal failed to address the question of the
significance of residence in a particular property
The legal
status of a residential occupier who is also an employee of the landlord
depends on difficult distinctions. Such an occupier can be a tenant or a
licensee in his own right, or he can, in law, occupy on behalf of his employer
so that the employer is treated as the occupier. Whether an employee is a
tenant or merely a representative occupier has consequences in a variety of
contexts. In the past, it could dictate whether or not he had the right to
vote; in more modern times it has affected liability for income tax or rates
and the question of security of tenure.
The law
recognises that security of tenure is inappropriate where the nature of an
employee’s job requires him to live in accommodation provided by the employer.
It is obvious, in principle at least, that when the employment ceases, the
accommodation should be available for the person that takes over the job.
However, the same is not true where the provision of a home is not closely
linked to the employment. It is often difficult to distinguish between a case
where the provision of a home is a mere benefit to an employee and one where
the employee cannot do the job required of him without ‘living over the shop’.
Whether the occupier has statutory protection will turn on where that line is
drawn, and it is unfortunate that the Court of Appeal has, in a recent case,
failed to provide more helpful guidance.
The Housing
Act 1985 provides that a public sector tenancy ‘is not a secure tenancy if the
tenant is an employee of the landlord or of a local authority and his contract
of employment requires him to occupy the dwelling-house for the better
performance of his duties’. Thus, the crucial question is whether the employee
is required to live in the property in order to carry out his job more
effectively; if so, he is a service occupier and can be required to leave the
property when his employment comes to an end.
The law
draws a distinction between the case where an occupier’s contract of employment
contains an express term concerning the occupation of accommodation provided by
the employer, and that where the contract is silent on the matter. In the
former instance the sole issue is the true legal nature of the contractual
provision. If it is conferring a ‘perk’, then, provided the employee has
exclusive possession, he will be a tenant and will have statutory protection.
If, however, it is requiring him to live in the accommodation so that he can
better perform his duties as an employee, then he will not be a tenant and will
not be protected.
terms
If the
contract of employment does not expressly require the employee to reside, then,
in order to establish that the employee is a service occupier rather than a
tenant, the employer must persuade the court to imply such a term. The court will
only do so where this is necessary to make the contract work. It has been
established that a term requiring residence will only be implied where this is
essential for the employee to carry out his duties; it is not enough merely to
show that residence will enable him to carry out those duties more effectively.
However, what does not appear to have been dealt with by the higher courts is
whether such a term will only be implied where it is essential for the employee
to live in the particular property.
In Surrey
County Council v Lamond [1999] 12 EG 170 the defendant was appealing
against a possession order. He argued that the trial judge ought not to have
accepted that it was essential for him to occupy the accommodation provided. He
also contended that it had to be shown that it was necessary for him to occupy
the particular property and that this had not been done.
Mr Lamond
had applied for a job as a ‘resident’ school caretaker and, following his
appointment, he moved into accommodation provided by the council. His contract
of employment made no mention of any requirement that he should live there. The
house in question was neither within the school grounds nor even immediately
adjacent to it, but was very close by and had been acquired by the education authority
as accommodation for the school caretaker. The evidence showed that Mr Lamond’s
duties (during both term times and the holidays) included responsibility for
the security of the school, carrying out minor maintenance, dealing with any
emergencies and directing any contractors working on the site. His name and
address were placed on the school gates so that he could readily be contacted
by those visiting the school out of hours.
Lord Woolf
was satisfied that the trial judge had, rightly, looked at the duties of the
employee and concluded that these could not properly be carried out without
living in the accommodation provided. Thus residence there was essential so
that a term to that effect should be implied into the contract of employment,
making the defendant a service occupier against whom possession had correctly
been ordered.
question ignored
Unfortunately, the court did not get to grips
with the appellant’s second argument: whether it has to be shown that residence
in the particular property (as opposed to living in the house next door) is
essential. There are suggestions in earlier cases that this might be a legal
requirement. In Langley v Appleby [1976] 3 All ER 391, Fox J
stated that it must be established ‘affirmatively that for the performance of
his duties [the employee] must live in that house and in no other’ and went on
to hold that it had not been established that it was essential for a member of
the police force to live in a particular police house; he could just as easily have
lived anywhere reasonably close to the police station. It is difficult not to
conclude that much the same could have been said of Mr Lamond and it is a pity
that this question was not addressed by the Court of Appeal.