THE INDUSTRIAL TRIBUNALS
CASE REF: 324/05
CLAIMANT: Woodburn Engineering Ltd
RESPONDENT: Construction Industry Training Board
DECISION
The unanimous decision of the tribunal is that the appeal should be upheld and that Woodburn Engineering Ltd is not liable to pay a levy to the Construction Industry Training Board.
Constitution of Tribunal:
Chairman: Mr Kelly
Members: Mr Wilkinson
Mrs Ley
Appearances:
The claimant was represented by Mr Michael Kelly, Barrister-at-Law, instructed by McLaughlin & Co., Solicitors.
The respondent was represented by Mr J. Coyle, Barrister-at-Law, instructed by Babington & Croasdaile, Solicitors.
RELEVANT FACTS
- The claimant company, at the time the levy was assessed, was engaged primarily in two types of contract. Firstly, it manufactured and installed motorway sign gantries and secondly it manufactured and installed stairs, walkways and platforms for Water Treatment Works. It also had a minor contract with Ballylumford Power Station which was a maintenance contract relating to minor building works including plumbing, repairing pumps, gear boxes, valves etc. That latter contract was not continuous. It involved two individuals who were called to perform maintenance or repairs as and when required and the tribunal has concluded that this was minimal in the context of the claimant's overall operations.
- In relation to the motorway gantry work, 3,000 man hours were required for the manufacture in the claimant's factory of each gantry. Each gantry was then installed by the claimant company on plinths prepared by the DOE or by DOE contractors. The claimant company also connected the electronic message boards to the electronic network which runs along the side of each motorway. The installation of each gantry took approximately 60 man hours. Therefore, the manufacture of the gantry within the factory environment comprised 92% approximately of the relevant man hours and the installation only 8% of the relevant man hours. In relation to the stairs, walkways and platforms which were provided for the Water Treatment Works, 75% of the relevant man hours were spent in the fabrication of the equipment in the factory environment and 25% in the actual installation.
RELEVANT LAW
- The Industrial Training (Construction Board) Order (Northern Ireland) 1964 established the Construction Industry Training Board (the Board) and paragraph 1 of Schedule 1 to that Order set out the activities which were to be regarded as the activities of the construction industry as they were carried out in Northern Ireland. Orders were made annually to fix the appropriate level and scope of training levies which were to be imposed by the Board under this legislation. The relevant Order to which we were referred is the Industrial Training Levy (Construction Industry) Order (Northern Ireland) 2003. That Order at Article 2(2) requires the Board to assess the levy separately in respect of each construction establishment of an employer except where the agreement of the employer has been obtained. No such agreement has been obtained in the present case. The term "construction establishment" is defined in Article 1(2) as "an establishment in Northern Ireland engaged wholly and mainly in the construction industry etc".
- In a decision entitled "In the Matter of an Application by HSS Hire Service Group PLC for judicial review" in July 2001 Kerr J stated at page 5:-
"A construction establishment is therefore one where one or more of the specified activities carried on for most of the time".
Those specified activities are set out in Schedule 1 to the 1964 Order.
DECISION
- The tribunal has concluded that the operations conducted by the claimant company by and large, fall outside the definition of the construction industry as set out in Schedule 1. Those parts of the claimant's operations which can properly be held to fall within Schedule 1, fall within paragraph 1(a)(i) which refers to the repair of a building (the Ballylumford contract) and paragraph 1(a)(viii) ie., the erection of structures made wholly or mainly of steel or other metal. That refers to the actual installation of the motorway gantries and the installation of the structures prefabricated in their factory on behalf of the Water Treatment Plants. The actual fabrication of these structures within the claimant company's factory in our view falls outside the scope of Schedule 1.
- Mr Coyle, Barrister-at-Law, on behalf of the Board, argued that the provisions of sub paragraph (g) and (h) of paragraph 1 of Schedule 1 were sufficiently wide to enable all activities in relation to design, transport, warehousing and all activities in relation to a garage to be taken into account in relation to the installation work which properly fell within paragraph (a). However, the tribunal has concluded that it cannot be properly said that such work was carried out in association with or in conjunction with the installation work which comprised particularly in a case of the motorway gantries, a tiny part of the overall activities of the claimant company. It would be stretching the wording of the legislation too far in the tribunal's view to convert what appears to be essentially an engineering company into a construction company by the use of sub paragraph (g) and (h). The tribunal notes in particular that up until the Engineering Training Board was abolished, the claimant company was assessed by that Board for a training levy and indeed paid such a training levy.
- In short, the tribunal concludes that those portions of the claimant company's activities which can properly be held to fall within Schedule 1 fall far short of a level that would enable the tribunal to conclude that the construction establishment was engaged wholly or mainly in activities within the scope of that Schedule.
Chairman:
Date and place of hearing: 16 March 2006, Belfast
Date decision recorded in register and issued to parties:
