Appeal No. UKEAT/0313/06/CEA 

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 27 October 2006

Before
THE HONOURABLE MR JUSTIC BURTON
(SITTING ALONE)

_______________________________________________________________________________

TRANSPORT & GENERAL WORKERS UNION	APPELLANT

BRAUER COLEY LTD (in Administration)	RESPONDENT
_______________________________________________________________________________

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MISS K NEWTON
(of Counsel)
Instructed by:
Messrs Thompsons Solicitors
The McLaren Building
35 Dale End
Birmingham
B4 7LF	
For the Respondent	No appearance or representation by or on behalf of the Respondent	

SUMMARY SHEET
The Trade Union successfully obtained a Protective Award against a company (now in administration) for breach of the obligation to consult it in relation to employees in respect of whom the Union was recognised. ET decision upheld that the protective award does not enure to the benefit of other employees in respect of whom the Trade Union is not recognised, whose representatives are also said not to have been consulted.

THE HONOURABLE MR JUSTICE BURTON

1.	This has been the hearing of an appeal by the Transport and General Workers Union (TGWU) against the decision of an Employment Tribunal, held at Birmingham after a hearing on 24 January 2006, in a judgment sent to the parties on 5 April 2006.  By that decision, the Tribunal indicated its judgment as follows:

“The Tribunal declares that the complaint that the Respondent failed to comply with a requirement of section of 118 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) is well founded and makes a protective award in respect of shop floor engineering section employees of the respondent at its premises at Radway Road, Shirley, West Midlands who were dismissed as redundant on or after 7 July 2005 and orders the respondent to pay to those employees remuneration for the protected period of 90 days beginning on 7 July 2005.”

2.	The mechanism for a claim for a protective award is set out in Chapter II of TULRCA, and the Trade Union here made its claim in these circumstances, namely under s188, which specifies the duty of the employer to consult in cases of proposed redundancy.  By section 188(1B)(a) of the Act it is provided that: 

“188	Duty of an employer to consult … representatives
(1B) For the purposes of that section the appropriate representatives of any affected employees are—
(a) if the employees are of a description in respect of which an independent trade union is recognised by their employer, representatives of the trade union…”

The duty is then to consult those appropriate representatives who, in that case, are the Trade Union, and by s189(1)(c):

“189 	Complaint … and protective award
(1)	Where an employer has failed to comply with a requirement of section 188 or section 188A, a complaint may be presented to an employment tribunal on that ground—
…
(c)	in the case of failure relating to representatives of a trade union, by the trade union…”

The Trade Union can then establish the appropriate circumstances for the grant of a protective award, and by s189(2):

“If the tribunal finds the complaint well-founded it shall make a declaration to that effect and may also make a protective award.”

By s189(3):
“A protective award is an award in respect of one or more descriptions of employees—
(a)	who have been dismissed as redundant, or whom it is proposed to dismiss as redundant, and
(b)	in respect of whose dismissal or proposed dismissal the employer has failed to comply with a requirement of section 188,”

By s190(1) the circumstances for enforcement of that protective award are set out:

“190	Entitlement under protective award
(1)	Where an [employment tribunal] has made a protective award, every employee of a description to which the award relates is entitled … to be paid remuneration by his employer for the protected period.”

How is that done?  That is provided by s192(1):

“192 	Complaint by employee to [employment tribunal]
(1)	An employee may present a complaint to an [employment tribunal] on the ground that he is an employee of a description to which a protective award relates and that his employer has failed, wholly or in part, to pay him remuneration under the award.”

3.	Thus in respect of a claim for a protective award made by a Trade Union in the circumstances specified in the Act, the award is obtained by the Union, but it is left to the individual employee - who may or may not be a member of the Trade Union, but would be required to be an employee of a description in respect of which the Trade Union is recognised by the employer (see s188(1B)(a)) – then to make an individual claim to the employment tribunal, effectively to cash in his entitlement pursuant to the protective award, if the employer has not paid up voluntarily.  

4.	In this case, the Respondent Company, Brauer Coley Ltd, was in administration prior to the hearing at the Employment Tribunal, and did not appear at the Tribunal, so that the claim was made effectively by way of a hearing with one side putting forward the case and no-one there on the other side to oppose.  Subsequent to the Employment Tribunal hearing and this appeal, the nature of which I shall describe, the joint administrators have obtained their release, and are taking no further action in relation to the Company, which one is left to assume is wholly insolvent.  The payment falls to be made, in the event of insolvency by an employer where a protective award has been made, by the Secretary of State, who for this purpose would be the Secretary of State for Trade and Industry.  

5.	So far so good, in the sense that the Claimant, the TGWU, on the face of it, obtained all to which it was entitled, namely a finding that there was indeed a breach by way of a failure to consult representatives of a Trade Union in respect of employees in respect of which that trade union was recognised.  But the trade union representative (Mr Kataria, who is a solicitor) at the Tribunal sought to persuade the Tribunal to make an order, not simply in respect of the shop floor engineering section employees of the Respondent (in respect of which the TGWU was the recognised union), but in respect of all employees who were dismissed as redundant at the same time, and who were not a part of that section in respect of which the TGWU was recognised. The Tribunal was not prepared to do so, and having made, at paragraph 14 of its judgment, a declaration that the Respondent failed to comply with the requirements of s188 of TULRCA, it went on as follows:

“15	The respondent suggested that we can make a protective award in respect of all the employees made redundant, not just the shop floor engineering section employees, and relied, in making this submission, on section 189(3) of TULR[C]A [that sub-section I have already set out].  However, we do not consider this to be the case and rely on section 189(1)(c) and 188(1B)(a) of TULR[C]A [again, I have cited those sections].  In relying on those provisions, we consider the claimant can only bring a claim in respect of the description of employees in respect of which it was recognised by the respondent, that is the shop floor engineering section employees.”

The protective award was made in those circumstances only in respect of the shop floor engineering section employees.

6.	Ms Newton, of Counsel, has appeared today, not having appeared below, and argued the appeal forcefully and persuasively before me, that the Tribunal erred in concluding that it was limited in the respect described.  Her general arguments were, first, that the vehicle for bringing a claim before the Tribunal is most conveniently the Trade Union, which avoids a large number of different individual employees being before a Tribunal, and secondly (at least in such cases as she has drawn to my attention, namely Leicestershire County Council v UNISON [2005] IRLR 920 and Smith and another v Cherry Lewis Ltd [2005] IRLR 86) that the distinction made by the Tribunal did not appear to be appreciated.  

7.	She submits that it is generally thought that a Union can bring a claim for a protective award and succeed in it in respect not only of employees whom it represented, or in respect of whom it was recognised, but also in respect of other employees who were dismissed on the same day: not, she submits, because strictly the Union can make, such a claim but because the effect of a protective award, once obtained by the Union, can then be accessed by those who have not been before the Tribunal in the proceedings.  The concession, which must be right in the light of the express statutory provisions which I have read, is that the Trade Union can only make a claim in respect of a breach of the consultation obligations owed to it.  

8.	This is an important starting point for the decision that I have to make, because she concedes that a straightforward claim that there has been a breach of section 188(1B)(a) and 189(1)(c), cannot lead, standing alone, to a protective award on some wider basis.  But what she submits is that once the matter is before the Tribunal, the Tribunal is then entitled to make findings of fact, and if those findings of fact include, or lead to, a situation in which the protective award is then made, it can be cashed in by others who were not before the Tribunal.  

9.	Of course, it is a starting point here that the Respondent did not attend, but whether or not the Respondent attends, it is always important in legal proceedings that a Claimant should be obliged to set out the case it makes and that a Respondent should know in advance the case it has to meet.  And so I start with the ET1 in this case, the originating application made by the TGWU.  It sets out in paragraph 1 that the Claimant is an independent trade union:

“which was recognized by the Respondent in respect of employees employed in their undertaking at Radway Road…”

That, strictly, of course is not inaccurate, but it does not specifically say that which is the requirement to found the claim, namely that it was recognised, not in respect of all employees, but in respect of the engineering shop floor employees.   At paragraph 2 it states:

“2	Without any prior warning to employees or to the Claimant, the Respondent dismissed as redundant all employees at the said establishment, including members of the Claimant.”

It should be immediately stated, of course, that those employees in respect of which the Trade Union is recognised, namely the engineering shop floor employees, do not all have to be members of the Union.  I have no information as to whether they were, or were not, all members of the Union in this case, but the Union is entitled to represent them if they are employees in respect of which the Union is recognised.  
“The employees were dismissed in groups at meetings held between the 7th July 2005 and 29th July 2005.”

10.	Then there is the central allegation of the pleading:
“3.	The Respondent failed to comply with the provisions of s188 of [TULRCA] in the following respects:
(a)	There were no consultations with the Claimant;
(b)	No information was given by the Respondents to the Claimant as required by statute;
(c)	The Respondent failed to consider any representations made by the representatives of the Claimant.”
All those allegations are allegations of breach of statutory duty, breach of requirements in relation to the Claimant Union, i.e. they are particulars of breaches by reference to s189(1)(c).  There are no allegations of any other breach of the statute, and indeed, it falls to be added, nor could the Claimant Union have made any claim of breaches in relation to other sections of the statute, to which I shall refer.  The pleading concludes:

“By virtue of the above the Claimant claims:
(a)	A declaration that the Respondent failed to comply with the requirements of s188 of the Trade Union and Labour Relations (Consolidation) Act 1992;
(b)	A protective award in respect of the employees dismissed by the Respondent.”

11.	Ms Newton points out that the protective award that is sought is said to be in respect of the employees dismissed by the Respondent, not simply the engineering shop floor workers in respect of which the Claimant Union is recognised who were dismissed by the Respondent.  On the other hand, it is quite clear that the beginning of the prayer recites that the Claimant claims relief “by virtue of the above”, and “the above” is the breaches set out in paragraph 3, all of which are breaches by reference to s189(1)(c).

12.	Before I consider the facts of the case and the judgment further, I should indicate the relevant sections of Chapter II of TULRCA which relate to employees who are dismissed by way of redundancy, and the obligations owed towards them, who are not employees of a description in respect of which an independent trade union is recognised by their employer within s188(1B)(a).  By s188(1B)(b) there is provision as to who the appropriate representatives of such employees are: 

“188 	Duty of employer to consult … representatives
(1B)	For the purposes of this section the appropriate representatives of any affected employees are—
…
(b)	in any other case, whichever of the following employee representatives the employer chooses:—
(i)	employee representatives appointed or elected by the affected employees otherwise than for the purposes of this section, who (having regard to the purposes for and the method by which they were appointed or elected) have authority from those employees to receive information and to be consulted about the proposed dismissals on their behalf;
(ii)	employee representatives elected by the affected employees, for the purposes of this section, in an election satisfying the requirements of section 188A(1).”
(I do not propose to set out the provisions of s188A(1) because they are detailed.)

13.	Those are the representatives who must be consulted, and to whom information must be given, in respect of employees who are not represented by a recognised Trade Union.  The obligation is similar to that which is owed in respect of Trade Union represented employees, but the mechanism is obviously different.  It should be added that there may well be Trade Union members in such a group, but their Trade Union has not been recognised in respect of that section of employees, and so there must be employee representatives elected or appointed to look after their interests.

14.	By s189(1) the provision in relation to these employees is set out as follows:

“Where an employer has failed to comply with a requirement of section 188 or section 188A, a complaint may be presented to an employment tribunal on that ground—
(a)	in the case of a failure relating to the election of employee representatives, by any of the affected employees or by any of the employees who have been dismissed as redundant;
(b) 	in the case of any other failure relating to employee representatives, by any of the employee representatives to whom the failure related;”

It is plain, and conceded by Ms Newton, that a Trade Union, who can make a complaint expressly under s189(1)(c), is not one of those who can make a claim under s189(1)(a) or 189(1)(b); nor did this Trade Union on its face make such a claim by virtue of the express breaches that are alleged in paragraph 3 of the ET1, naturally being breaches referable to s189(1)(c) and s189(1)(a) and (b). 

15.	Against that background, I turn to the judgment of the Tribunal.  The facts were recited in paragraph 4 of the judgment. Having referred in paragraph 3 to the fact that Mr Graham Mant, a shop steward previously at the Respondent Company, had given evidence on behalf of the Claimant (that is, the Trade Union), paragraph 4 reads as follows:

“4	We find the following as primary facts.
4.1	The respondent dismissed as redundant 37 to 40 employees at its premises at Radway Road, Shirley between the dates 7 July and 29 July 2005.
4.2	An independent trade union, the claimant, represented the shop floor engineering section employees.  All the shop floor engineering section employees were dismissed between 7 July and 22 July 2005.”

There is no reference to any employees who were not shop floor engineering section employees and thus represented, whether they be Trade Union members or not, by the Claimant Trade Union.  Paragraph 4 continues:

“4.3	The only meeting held between the respondent and the claimant regarding the dismissals occurred on Monday 11 July 2005.  It took place between the claimant and the respondent’s receivers.  For the claimant, two shop stewards and a full time union representative were present.  The receivers informed the claimant that ‘it was out of their hands’.  There was no consultation.  The respondent did not provide any information to the claimant.  There was no other consultation.”

16.	Ms Newton has latched on to that last sentence, which says “There was no other consultation.”  She submitted that by that sentence there was a finding not only that there was no consultation with the Claimant, but that there was no consultation with other employees or employee representatives.  I am satisfied that that was not in the mind of the Tribunal.  The witness statement of Mr Mant, which I have been provided with by Ms Newton and have read, deals with the circumstances as seen by Mr Mant, the shop steward.  He completes his statement as follows:

“6.	I later learnt that the remaining workers were made redundant a fortnight later.  In total between 37 -40 workers were made redundant.
7.	I believe that the employees who were made redundant are entitled to a protective award because the employer did not consult or provide any information in connection with the redundancies that were made.”

Ms Newton submits that in the light of that evidence, the Tribunal was entitled to find not only that there was no consultation with the Trade Union (the Claimant) but that there was no consultation with anyone else either.  I am satisfied that there was not intended by the Tribunal to be a finding in relation to other employees than those represented by the Trade Union.  This is apparent to me, in the light of the nature of the claim before it, as framed in the ET1, not only because no reference is made, for example, as to whether there was election or appointment of employee representatives with whom such consultation did not take place, but also because of the Tribunal’s conclusory paragraph - the important part of the judgment - headed up as “Conclusions”.  

17.	In paragraph 12 the Tribunal states that the Respondent “should have consulted with appropriate representatives of any of the employees affected in good time and, in any event, at least 30 days before the first dismissal took effect.”  Then at paragraph 13, centrally:

“13.	In respect of the shop floor engineering section, where there was a collective bargaining agreement in place with the claimant, the appropriate representatives were representatives of the claimant.  The respondent did not consult at all with representatives of the claimant.  The respondent did not mitigate its failure to consult in any respect.”

This only emphasises to me that, when there was reference in paragraph 4.3 to there being “no other consultation”, what the Tribunal meant was no other consultation with the Claimant, given that there was only the one meeting, which the Tribunal concluded did not amount to sufficient or any consultation.  

18.	However, Ms Newton submits to me that there was evidence before the Tribunal, upon which the Tribunal could have found that there was no other consultation, and thus the words in paragraph 4.3 should be so interpreted or, alternatively, if not so interpreted then at the very least the matter could be sent back so that, without fresh evidence being adduced, the Tribunal could make a finding to the same effect.   

19.	I clearly am unable to be satisfied, simply because of the hearsay words of Mr Mant that, for example in this case, there were no employee representatives elected in respect of employees with regard to whom this Trade Union was not recognised and/or that, if such employees were elected or appointed, there was or was not consultation with them.  But this question raised by Ms Newton goes much wider than the particular facts of this case, and if it were simply a question of remitting the matter to the Tribunal below to make findings of fact more clearly than it has done at the moment, then that could and would be done.  

20.	The fundamental question which underlies this appeal, is in the light of the fact that the Trade Union cannot make a claim otherwise than in respect of a breach of a duty with regard to consultation of a Trade Union and in respect of those employees whom the Trade Union represents, can other employees take advantage of a finding to which on the face of it they are not a party, because they have made no claim?  There could have been on these facts a claim by the Trade Union in respect of the engineering shop floor representatives and by the individuals, of whom I understand there to be some five, who were also dismissed, but who were not represented by - albeit they may have been members of - the TGWU, in their own names.    

21.	What Ms Newton submits is that it is not necessary for the protective award to be limited to those who were Claimants for the protective award.  Once a protective award is made then it should be available to anyone who can benefit from it; and on the face of it that makes good sense, not least for the reason of tidiness.  And, as I earlier indicated, having one vehicle for seeking the protective award, leaving it to individuals then to pursue their separate claims whether directly under the Union, or collaterally to it, does have the advantage of simplicity.  

22.	If that is right, then in a case where the Trade Union brings a claim and seeks a protective award, a Respondent may conclude that only those employees who were dismissed who were represented by the Trade Union are thus making the claim (and may not resist such a claim, whether or not due to insolvency) but not appreciate that the consequence would then be that the Respondent will find itself liable to employees who, on the face of it, were not party to the claim and were not represented by the Union at the material time or at all.  

23.	It might even be the situation in which - unknown perhaps to the Union, acting no doubt in good faith - employee representatives had been elected and/or even consulted in respect of those employees not represented by the Union, and the employer might have wanted to have raised that fact, if the employer had appreciated that a protective award would have the consequence of being available not only to those represented by the Union but also to those employees who were not.  

24.	Ms Newton submits that this very case can make it clear in future to employers that that is the case, and that no favour should be shown to employers who do not bother to take part in the action or, as in this case, who are insolvent. 

25.	I cannot decide this matter by way of convenience alone, and whichever way this matter goes, the position will now be clear for the future:  either that an employer is faced with a claim, once a protective award is made, by employees for whom the Trade Union was not entitled to bring the claim or, alternatively, it will be clear that not only can a Trade Union only bring a claim in respect of those employees it represents, but that the protective award which results inures only for the benefit of those whom the Trade Union represents, and for no other employees (who must make their own claim).  

26.	I am satisfied that where a claim is made, as it is here, by the Trade Union, that claim must be based upon a breach of the obligation owed to the Trade Union exactly, as it was here, i.e. a breach by reference to s189(1)(c).  There was no allegation of a breach by reference to s189(1)(a) or (b).  Indeed, there could not have been, because this Trade Union could not have made that claim.  The protective award was, in my judgment, plainly made only on the basis of a complaint under s189(1)(c).  Even if the Tribunal had gone beyond its remit, and had made – as I am satisfied they did not – a finding of fact that there had also been no consultation in respect of employees not represented by the Trade Union, in my judgment it would not have been a protective award cashable by the latter group of employees.  S189(1) specifies the various complaints that can be made: on the one hand s189(1)(c) by a Trade Union in respect of failures relating to representatives of the Trade Union, and on the other s189(1)(a) and (b) complaints in respect of failures with regard to non-union recognised employees.  Section 189(1A) provides:

“189	Complaint … and protective award
(1A)	If on a complaint under subsection (1) a question arises as to whether or not any employee representative was an appropriate representative for the purposes of section 188, it shall be for the employer to show that the employee representative had the authority to represent the affected employees.”

That is a provision which  applies only to s189(1)(a) and (b) cases.  The same can be said for s189(1B).  Then there is s189(2):

“If the tribunal finds the [my italics] complaint well-founded it shall make a declaration to that effect and may also make a protective award.”

The declaration that is thus made is of a finding in favour of a particular complaint.  In this case that was a complaint under s189(1)(c), as there was no complaint under s189(1)(a) and (b).

27.	By s189(3) a protective award is defined.  I have already read this section but I read it again at this stage:
“A protective award is an award in respect of one or more descriptions of employees-”  
(a reference plainly back to the provisions of s188)

(a)	who have been dismissed as redundant, or whom it is proposed to dismiss as redundant…”
(and of course in this case there were those who were dismissed who were not union-recognised) and:
(b)	in respect of whose dismissal or proposed dismissal the employer has failed to comply with a requirement of section 188,”

It is quite plain that the protective award can only be made in favour of those employees who have been dismissed as redundant and in respect of whom a complaint has been proved under s189(1).  There was no breach alleged and no breach proved in this case, nor, in my judgment, could it have been, in respect of s189(1)(a) and (b). The only complaint related to s189(1)(c).  In those circumstances, the Tribunal was correct in making the limited order that it did.  

28.	If this point has not arisen before, then it is time now for the position to be made clear.  There is no difficulty in a claim being made simultaneously by a Trade Union and individual employees.  In this case that would certainly have been no problem because, as I understand it, all the five employees in question are members of the TGWU so that, although named as individual employees, they could have been represented by the same solicitors as the Trade Union itself.  I am satisfied therefore that there are no reasons of practicality to argue against what is, in my view, the clear construction of the statute, which requires that a protective award can only be made in favour of those in respect of whom a complaint of breach has been proved, and the breach in question – if it is a non-Union breach – can only be claimed, and the protection only sought, by the employees themselves.  

29.	So far as the facts of this case are concerned, I am hopeful that it will be accepted by the Department – which will stand in the shoes of the Respondent, and to which the EAT gave the opportunity to appear today to argue the matter, though they decided not to take up that invitation – that they will pay out the other five employees, on the same basis as those for whom the TGWU are plainly representatives.  Otherwise, those five will be driven to bring proceedings out of time in circumstances where it is quite plain that legal advice and/or legal uncertainty might well have created considerable difficulties for them.  Certainly, it was hoped and believed before the Tribunal that the otherwise sensible course of picking up their claim through the mechanism of their own Union was an appropriate course, provided that no prejudice was thus caused, as I hope it will not be, to those five.  I have no doubt whatever however, hearing the points of these 5 aside, that by setting out the position in full in this judgment I have introduced and enabled certainty for the future.

AFTER DISCUSSION

I shall give permission to appeal, as this is previously undecided point, but extend time for the Notice in the hope that it will be considered unnecessary in any event if the Department were to pay the five Claimants. 
If the appeal proceeds, it is plainly necessary that the Department should intervene to argue the point so that the position is fully argued.