Service provider – Utilities – Respondent providing industrial training for construction industry – Levy imposed based upon employers’ activities – Appellant rehabilitating water mains in water distribution network – Whether water mains constituting pipeline for purposes of levy – Whether employment tribunal erring in approach to construction – Appeal dismissed
The appellant was a service provider to the utilities industry whose main activity was the rehabilitation of the water or distribution mains that comprised the water distribution network. Water was transported from source to end user through a system of pipes and a network of water or distribution mains. These were small-diameter pipes that formed a reticulation system upon which the appellant carried out the relevant work.
The respondent board provided training for the construction industry, which it funded by imposing a levy on employers. The appellant appealed against a decision of an employment tribunal that had dismissed its challenge to the respondent’s issuing of a levy assessment notice. The short issue raised was whether the tribunal had erred in law in concluding that the appellant was liable to pay the levy since the water distribution network comprising water or distribution mains, upon which the appellant carried out most of its activities at the time relevant to the notice, was a pipeline for the purposes of para 1(a)(iii) of Schedule 1 to the Industrial Training (Construction Board) Order 1964 (Amendment) Order 1992 (SI 1992/3048).
The appellant contended, inter alia, that: (i) “pipeline” in Schedule 1 to the order should be understood to exclude a network of pipes, with numerous branch connections, distributing water through a reticulation system to multiple end users; and (ii) the tribunal had erred in adopting the broad Oxford English Dictionary definition of “pipeline” as “a continuous line of pipes, a conduit of iron pipes for conveying petroleum from oil well to market or refinery, or supplying water to a town or district”. The meaning of “pipeline” in the order gave rise to doubt and ambiguity, and the tribunal had erred in law in not recognising the putative ambiguity and in not adopting a more restricted meaning that would have advantaged the appellant.
Held: The appeal was dismissed.
The tribunal had adopted the correct legal approach to the issue before it and had reached a conclusion as to the meaning of “pipeline” in Schedule 1 that was legally flawless and entirely correct.
The levy was in the nature of a tax and should not be imposed unless that was the clear and unequivocal effect of the statutory provision, and any ambiguity had to be resolved in favour of the company upon which the levy was imposed: Gibbon Equipment Hire Ltd v Construction Industry Training Board [2001} EWHC 954 (Admin) and Ingram v Inland Revenue Commissioners [1997] 4 All ER 395 applied.
However, the appellant’s construction would be inconsistent with the ordinary understanding of “pipeline” and would require a substantial gloss on the unqualified expression in Schedule 1, for which there would be no justification in the plain language or layout of para 1(a)(iii) or any relevant legislative policy.
In trying to interpret an order such as the present, the processes of strict analysis were seldom conclusive and might lead to confusion. The answer depended more upon the cultivated and experienced impression of an industrial tribunal in the first instance and respect had to be paid to the findings of that body. In the present case, an experienced and expert tribunal had considered trade definitions and literature and heard evidence over three days, and had reached a conclusion that it was entitled to reach: Engineering Industry Training Board v Foster Wheelers John Brown Boilers [1970] 1 WLR 881 applied.
Daniel Tatton Brown (instructed by Halliwells LLP, of Manchester) appeared for the appellant; Ivan Hare (instructed by Construction Industry Training Board) appeared for the respondent.
Eileen O’Grady, barrister
