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You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Tabberer & Ors v. Mears Ltd & Ors (TRANSFER OF UNDERTAKINGS - Varying terms of employment ) [2018] UKEAT 0064_17_0502 (5 February 2018) URL: https://www.bailii.org/uk/cases/UKEAT/2018/0064_17_0502.html Cite as: [2018] UKEAT 64_17_502, [2018] UKEAT 0064_17_0502 |
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At the Tribunal | |
Before
HER HONOUR JUDGE EADY QC
(SITTING ALONE)
![]() (2) MR D OGORMAN (3) MR G ROBERTS (4) MR D PALSER |
APPELLANTS |
(2) MR M BISSETT (DEBARRED) (3) MR T WADMAN |
RESPONDENT |
Transcript of Proceedings
JUDGMENT
For the Appellants | MS LOUISE MANKAU (of Counsel) Instructed by: Prolegal Solicitors Ltd 6 Agar Street London WC2N 4HN |
For the First Respondent | MR JEFFREY JUPP (of Counsel) Instructed by: Mears Group plc Legal Department 26-28 Hyde Way Welwyn Garden City Hertfordshire AL7 3UQ |
For the Second Respondent | Second Respondent debarred from taking part in this appeal |
For the Third Respondent | No appearance or representation by or on behalf of the Third Respondent |
SUMMARY
TRANSFER OF UNDERTAKINGS - Varying terms of employment
The Claimants were electricians who had originally been employed by Birmingham City Council ("BCC"); their employment had been subject to a number of TUPE transfers, ultimately to the Respondent. Within BCC, electricians had enjoyed payments of Electricians Travel Time Allowance ("ETTA"), albeit that the reasons for this allowance had ceased to exist over the years. Although managers within the transferor company had questioned payment of ETTA, it was an allowance that had continued to be paid until the transfer to the Respondent in 2008. The Respondent first questioned whether there was any contractual entitlement to ETTA. After litigation before the ET and EAT, it was determined that there was (see Salt & Others v Mears Ltd). Faced with that determination, the Respondent gave notice that it was bringing this contractual entitlement to an end. The Claimants objected, arguing that the reason for this variation to their contractual terms was a relevant transfer for TUPE purposes and therefore void (see Regulation 4(4) TUPE). The ET disagreed, finding that the contractual variation was made because ETTA was an outdated and unjustified payment. It further found that, in any event, the Claimants had not met the conditions for payment of ETTA, having not submitted claims - a condition, the Claimants noted, that had not been raised by the Respondent in the Salt litigation. The Claimants appealed against both these findings by the ET.
Held: dismissing the appeal
The ET had found that the variation of the Claimants' terms of employment was due to the Respondent's conclusion that ETTA was an outdated and unjustified allowance; in the circumstances, it was entitled to find that this was a reason unrelated to the earlier transfer to the Respondent. The Salt litigation had not itself been linked to the transfer but, in any event, that was simply the context in which the Respondent made its decision, it was not the reason for it. As for the ET's finding that the Claimants had not, in any event, met the relevant conditions for claiming an entitlement to ETTA, there had been no finding on this issue in the Salt litigation and the Respondent had not been estopped from taking the point. This had, moreover, been expressly raised as an issue in the current proceedings and the Claimants had raised no objection; it was not open to them to take the point on appeal.
HER HONOUR JUDGE EADY QC
Introduction
"4. Effect of relevant transfer on contracts of employment
(4) Subject to regulation 9, in respect of a contract of employment that is, or will be, transferred by paragraph (1), any purported variation of the contract shall be void if the sole or principal reason for the variation is -
(a) the transfer itself; or
(b) a reason connected with the transfer that is not an economic, technical or organisational reason entailing changes in the workforce."
(1) In finding that the 2012 variation of contract was not for a reason connected with the transfer but was by reason of the adverse judgment in earlier proceedings involving the Respondent (see Salt & Others v Mears Ltd UKEAT/0522/11, [2012] UKEAT 0522_11_0106), the ET ignored the fact that the entire subject matter of Salt was related to the transfer and non-payment of ETTA following the transfer and thus the reason for variation was still a reason connected with the transfer; the ET thus adopted an approach that would render the protection under TUPE ineffective if it could so easily be avoided; it further failed to explain why the Claimants were not paid for the period between the transfer and the decision to vary their contracts.
(2) Further, and in the alternative, the ET erred in concluding that the submission of a claim was a prerequisite to entitlement to ETTA.
The Relevant Background and the ET's Decision and Reasoning
"31. if an electrician had to work from a depot other than his home depot this triggered the payment of ETTA subject to the submission of a form and the authorisation of that form by a line manager."
"36. by the time of the Mears Transfer each of the first second third and sixth claimants were contractually entitled to payment of ETTA at a daily rate of either one hour (the third claimant) or an hour and a half (the first second and sixth claimant[s]) subject to the submission of a form and the authorisation of that form by a line manager either because of acceptance inferred by conduct or custom and practice regularly applied over a number of years. "
"38. as a result of the then working practices of the electricians the respondent did not believe they were met [sic] what the respondent understood to be the eligibility criteria for entitlement to ETTA and decided no payments of ETTA would be made until the electricians could prove they were so entitled. "
"With the clarity provided by the ET and EAT that the scheme is outdated and having fully reviewed the needs of the business, I can confirm that a decision has been taken that not only is the allowance inappropriate, but also it fails to support our business needs going forward and it is wholly unfair on the remainder of the workforce who operate in exactly the same way as the [electricians] and who have not presented any claim to travel allowances.
Regardless of whether or not you have or are currently attempting to exercise any right under this allowance, we can confirm that irrespective of whether the entitlement is an express or implied terms [sic] in your employment, this letter is notice that we no longer intend to be bound by it and we are therefore giving you a formal notice of the removal of this allowance from your Terms and Conditions of employment.
Again, regardless as to whether or not the allowance is enforceable any entitlement to the allowance will cease on 01 September 2012 and the allowance will no longer form part of anyone's Contract of Employment.
If you have not been submitting monthly claims for travel allowances since the transfer to Mears in 2008, you will not notice any difference as a result of this decision and your terms and conditions remain largely unaffected."
"39. I infer from its contents that once a tribunal and the EAT had found against it, the respondent decided to ensure that any such contractual entitlement was brought to an abrupt end because it believed that it was outdated in the light of the (by then very longstanding) working practices of the electricians. It would not countenance having to maintain a contractual entitlement to a fixed rate daily allowance to electricians the historic rationale for which had long since disappeared; the electricians did not lose productivity bonuses because of time spent travelling to a depot other than their home depot because there were no productivity bonuses and there was only one depot. This decision (to vary the contract by stopping the contractual entitlement) was not the same decision as the earlier decision to cease making ETTA payments some four years before nor was it taken for the same reasons, albeit the respondent's view that the ETTA payment was outdated is a common thread. I conclude the operative reasons for the variation (the adverse findings of the tribunal and EAT and the respondent's belief that the ETTA payments were outdated) were not the transfer itself or a reason connected with the transfer."
The Parties' Submissions
Ground 1
The Claimants' Case
(1) This ignored the fact that the entire subject matter in Salt was the TUPE transfer on 1 April 2008 and the relevant Claimants' entitlement to payment of ETTA following the transfer; the reason for the variation was thus still connected with the transfer - there was a clear and continuing link between Salt and the transfer and the current claims.
(2) The ET had adopted an interpretation of TUPE such as would render the Regulations wholly ineffective and open to easy avoidance: any earlier adverse judgment brought under TUPE could subsequently be relied on as itself providing the reason for a later variation of contractual terms and could be used as a device by employers seeking to avoid the difficulties otherwise posed by Regulation 4(4).
(3) The ET failed to take any account of the clear harmonisation intent contained within the Respondent's letter varying the Claimants' contracts which had stated:
" not only is the allowance inappropriate, but also it fails to support our business needs going forward and it is wholly unfair on the remainder of the workforce who operate in exactly the same way as the [electricians] and who have not presented any claim to travel allowances."
(4) Yet further, the ET failed to explain why the Claimants were not paid ETTA between the day the transfer occurred on 1 April 2008 and the decision to vary their contracts with effect from 1 September 2012. That suggested there was a continuing connection between transfer and non-payment.
(1) Because it had found the same view as to the outdated nature of ETTA had been formed in 2006 (two years pre-transfer) but payment of ETTA had continued until the day of transfer (1 April 2008) (see the ET Judgment at paragraphs 7.12 and 7.14); it was not an answer to say this was due to the wish to avoid a dispute with trade unions at a sensitive time, as the ET had found that the payments had then continued because of a sense of legal obligation (see paragraph 36).
(2) The ET had further found that the Claimants' working practices had been the same since at least 2006 (see the ET at paragraphs 7.3 and 7.12). The only thing that had changed was the fact of the transfer; describing the Respondent's managers as bringing "a fresh pairs of eyes" to the issue (see the ET at paragraph 7.14) was simply connecting this to the fact of the transfer.
(3) The ET had found that the decision to stop payment of ETTA was made "at the point of the Mears transfer" (see paragraph 7.14). The reason relied on by the Respondent for ceasing to pay ETTA had remained the same, thus linking the 2012 decision back to the 2008 transfer.
The Respondent's Case
Ground 2
The Claimants' Case
The Respondent's Case
Discussion and Conclusions
Ground 1
Ground 2