Appeal No. EAT/469/94

	EMPLOYMENT APPEAL TRIBUNAL
	58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

		At the Tribunal
		On 29 November 1994
	Judgment delivered on 21 December 1994

	Before

	THE HONOURABLE MR JUSTICE HOLLAND

	MR K M HACK JP

	MR R TODD

(1) MR R BEDFORD	APPELLANTS
(2) MR S DILLON
(3) MR B FINNIMORE
(4) MR S DRAPER
(5) MR I HELLARY
(6) MR W HORSLEY

FURNITURE TIMBER & ALLIED TRADES UNION	RESPONDENTS

	Transcript of Proceedings

	JUDGMENT

Revised

	APPEARANCES

For the Appellants	MR CHARLES BEAR
(Of Counsel)
Messrs Hewitson Becke & Shaw
Shakespeare House
42 Newmarket Road
Cambridge
CB5 8EP

For the Respondents	MR ANDREW HOGARTH
(Of Counsel)
Messrs O H Parsons & Partners
3rd Floor
Sovereign House
212-224 Shaftesbury Avenue
London
WC2H 8PR

	MR JUSTICE HOLLAND:	The circumstances giving rise to this relatively unusual case and the probably unique preliminary issue stem from the relevant statutory provisions and the chronology.  First, then the statutory provisions:-

	Trade Union and Labour Relations (Consolidation) Act 1992:
		Section 64.
		(1)  An individual who is or has been a member of a trade union has the right not to be unjustifiably disciplined by the union.

		(2)  For this purpose an individual is "disciplined" by a trade union if a determination is made, or purportedly made, under the rules of the union or by an official of the union or a number of persons including an official that - 

			(a)  he should be expelled from the union or a branch or section of the union ..... 
		and whether an individual is 'unjustifiably disciplined' shall be determined in accordance with section 65.

		Section 65.
	
		(1)  An individual is unjustifiably disciplined by a trade union if the actual or supposed conduct which constitutes the reason ..... for disciplining is - 

			(a)  conduct to which this section applies, or
			(b)  something which is believed by the union to amount to such conduct .....

		(2)  This section applies to conduct which consists in -  

			(a) failing to participate in or support a strike or other industrial action (whether by members of the union or others), or indicating opposition to or a lack of support for such action .....

	Section 66

		(1)  An individual who claims that he has been unjustifiably disciplined by a trade union may present a complaint against the union to an industrial tribunal.

		(3)  Where the Tribunal finds the complaint well-founded, it shall make a declaration to that effect.

	Section 67

		(1)  An individual whose complaint under Section 66 has been declared to be well founded may make an application for .....

			(a)  an award of compensation to be paid to him by the union .....

		(2)  An application under this section shall be made to the Employment Appeal Tribunal if, when it is made - 

			(a)  the determination infringing the Applicant's right not to be unjustifiably disciplined has not been revoked, or 
			(b)  the union has failed to take all the steps necessary for securing the reversal of anything done for the purpose of giving effect to the determination;  and in any other case it shall be made to an industrial tribunal.

	Section 97

		(2)  A trade union may transfer its engagements to another trade union which undertakes to fulfil those engagements .....

		(3)  An amalgamation or transfer of engagements does not prejudice any right of any creditor of any trade union party to the amalgamation or transfer.

	Section 98

		(1)  The instrument of ..... transfer must be approved by the Certification Officer

	Section 105

		(1)  Where an instrument of ..... transfer takes effect, the property held - 

			(b)  for the benefit of the transfer trade union.

		shall ..... vest ..... in the appropriate trustees

		(3) ..... the appropriate trustees means the trustees of the ..... transferee union.

	We then turn to the chronology:-

	September and October 1993.  The six Applicants are respectively expelled from the Furniture Timber and Allied Trades Union ("FTATU") in circumstances which were undoubtedly unlawful.  The circumstances relating to one Applicant, Mr Horsley, differ from those relating to the others, but not materially for the purposes of this issue.

	12th November 1993.  All six present complaints to the Industrial Tribunal, each alleging unjustifiable disciplining by the Union as provided for by Section 66(1) Trades Union and Labour Relations (Consolidation) Act 1992 ("the 1992 Act").

	1st January 1994.  FTATU ceases to exist, which development has been foreshadowed by an Instrument of Transfer providing for the transfer of the engagement of FTATU to the General, Municipal and Boilermakers Union ("GMB") as at that date.  We shall refer later to this document but suffice it now to note that by it the GMB undertakes, inter alia, to establish 'FTAT' branches' corresponding to the branches of FTATU as at 31st December 1993.

	24th January.  O.H. Parsons & Partners, solicitors, ("Parsons") file a Respondent's Statement the full terms of which read:-

		"The Respondent Trade Union, FTATU, became part of the GMB on 1st January 1994.

		The GMB accepts that the expulsion or attempted expulsion of the Applicants in this case was unlawful under the Trade Union and Labour Relations Act 1992.  The action was taken by the FTATU Branch in question without the benefit of legal advice.

		The Rules of the GMB contain no provision for expulsion of a member by his or her Branch and the GMB would give full consideration to renewed membership applications by the Tribunal Applicants in this case."

	The accompanying letter to the Regional Office of Industrial Tribunals reads:-

		"I have (been) instructed by the Respondents in each of the
		above cases, the Furniture Timber & Allied Trades Union.

		FTATU ceased to exist as of 31st December 1993, becoming part of the GMB as of 1st January 1994.

		On the instructions of the GMB I enclose a statement which is to serve as the Notice of Appearance in this case, please.  It is accepted that the applicants are entitled to a Declaration."  

	23rd February.  Copleys, solicitors for the Applicants write to Parsons asking whether their clients would confirm in writing that the disciplinary decisions had been revoked so that the Applicants might be restored to membership of the union.

	24th February.  An Industrial Tribunal sitting at Bury St. Edmonds decides that "pursuant to the provisions of Section 66(3) of the Trade Union and Labour Relations (Consolidation) Act 1992 each of the Applicants had been unjustifiably disciplined by the Respondent".  The reasons merit citation in full:-

		"1.	Each of the applicants was a member of the respondent trade union.

		2.	On 13 September each received notice to attend a meeting convened for the purposes of hearing an appeal against an earlier decision which had been taken at a branch meeting to expel them from the union.  None attended the meeting and each subsequently received notice confirming the dismissal and that they were expelled from the Union.

		3.	The reason given for the expulsion from the Union was that each of the applicants had failed to participate in or support industrial action.

		4.	The Respondent admits that the purported expulsion was unlawful and asserts in the appearance that its rules contain no provision for expulsion of a member by his or her branch.

		5.	Overlooking the possibility, which has not been canvassed in the documents, that the expulsion is in any event unlawful as being outside the powers of those who took the decision nevertheless on the admission of the Respondent in the appearance I conclude that the action was an act of unjustifiable discipline within the meaning of section 65(1) and 65(2) of the Trade Union and Labour Relations (Consolidation) Act 1992 and that accordingly the applicants are each entitled to a declaration to that effect contained in this decision pursuant to the provisions of section 66(3) of the same Act."

	11th April.  Parsons, seemingly forewarned of the Applicants' intention to claim compensation write as follows:-

		"I note that your clients now wish to apply for compensation.

		I do not understand the importance of your clients seeking revocation of the FTATU decision which purported to expel your clients from membership.  As you know, FTATU no longer exists and the GMB's position is as set out in the statement submitted to the Tribunal dated 24th January, 1994.

		The actions of FTATU could not possibly have been made under the GMB's rules and so far as renewed Trade Union membership is concerned for your clients, the position is that they have not paid subscriptions to the GMB since the date of the FTATU merger, 1st. January, 1994.

		My instructions from the GMB are that the Union would be quite content to accept your clients into the Union as with the other former FTATU members at Horatio Myer & Co. Ltd.  However, before GMB membership can be confirmed, your clients will need to pay the arrears of contributions due, £1.45 per week from 1st. January which, to 15th. April, 1994, involves fifteen weeks or £21.75 per member.

		Your clients should approach Mr. Steven Ryan at Myers with payment if in fact they wish to become GMB members and would you please confirm as soon as possible whether it is their intention to do so.

		Would please also explain why your clients feel that a compensation payment is appropriate given that no objection was raised to your request for a declaration and given that the GMB is prepared to accept your clients into membership, subject of course to financial compliance."

	12th April.  Each of the six Applicants make a claim to this Tribunal for compensation.  Further, Copleys write to Parsons:-

		Is it your contention that the liability of FTATU for its conduct ceased as at the 31st December 1993 and that GMB of which FTATU now forms part, does not take over any of the pre-existing rights and obligations of FTATU?"

	14th April.  Parsons reply:-

		"It is accepted that GMB assumes rights and liabilities for FTATU as of the date of transfer, but that is not to say that events since 1st January 1994 are not relevant to the issue of compensation - and indeed if your clients seek a compensation order against GMB then surely, with FTATU extinct, the important question must be the GMB's approach to the case and to the issue of your clients' membership of the Union". 

	7th June.  The Respondent's Answer of this date is merely formal.  The Respondent is identified as the GMB.

	19th July.  
	Following a further exchange of correspondence, Copleys write:-

		"Our clients position concerning this matter is simply this, that the Union has done nothing whatever apart from admit that our clients were unjustifiably disciplined.  They have taken no steps to cancel or revoke the disciplinary procedures and have not restored our clients to union membership.  Had they done that we doubt that our clients, apart from Mr Horsley would have had a right of action."

	3rd August.  Parsons write:-

		It appears from the correspondence that your clients do not wish to be members of the GMB Union.  Would you please confirm whether this is in fact the case.

		On the instructions of the Regional Secretary, I enclose 6 membership application forms with stamped addressed envelopes and your clients' applications for membership are invited once again.

		Your clients are free either to have membership of the GMB treated as continuous with their membership of FTATU or, if they prefer, they can apply for membership as new members, which would save the cost of backdated subscriptions.  Obviously if membership is to be treated as continuous then subscriptions must be backdated to 1st January 1994."

	29th November.  The applications of the 12th April come before this Tribunal.

	We are now in a position to turn from the law and the chronology to the issue that we were asked to resolve.  On behalf of the Respondent GMB, Mr Hogarth took a point that thus far had not been taken.  His submissions amounted to the following:-

	1.	The "trade union" for the purpose of the complaints of the 12th November 1993 was FTATU, then in existence.

	2.	FTATU ceased to exist as at 31st December 1993 and could not itself continue to respond to the complaints.

	3.	Granted that there had been a Transfer of Engagements between FTATU and GMB during the existence of the former, such did not serve to substitute the GMB for the FTATU for the purposes of these complaints so that none of the Applicants could have redress from the GMB pursuant to Section 67.

	4.	Granted that the Respondent's Notice of the 24th January 1994 was, by reference to the foregoing, wrong, the error was one of law and thus the GMB are not estopped from reneging on it.

	On behalf of the Applicants Mr Bear argued in effect that for all purposes connected with these complainants the GMB are FTATU, that being the effect of the Transfer of Engagements.  He draws attention to Section 97(3) and submits that his clients are, or cannot be worse off than creditors of FTATU.  Finally, he submits that the conduct of the GMB since the beginning of the year has estopped that union from taking this point.

	For our part, approaching this issue as a Tribunal of original not appellate jurisdiction, we immediately focus upon the Instrument of Transfer made between FTATU and GMB.  This is undated but was seemingly made in 1993, certainly before November.  The following passages merit citation for present purpose.  With the 1st January 1994 as "the effective date" it reads, so far as material:-

	1.	Upon the effective date the members of the transferor Union will become members of the transferee Union and be subject to that Union's rules.

	2.	All arrears of contributions of existing members due to the transferor Union at the effective date shall be carried forward and such arrears, when collected, shall be paid into the funds of the transferee Union.

	8.	In determining entitlement to the benefits of the transferee Union, continuous past membership with the transferor Union will, from the effective date, be treated as past membership of the transferee Union.

	12.	Any disciplinary action pending, and any appeals which have not been heard, as of the day before the effective date, in respect of any member or any official of the transferor Union, shall proceed in accordance with the Rules of the transferee Union." 

	This Tribunal finds as follows in the light of the foregoing:-

	1.	As at October 1993 all six Applicants had been unjustifiably disciplined by FTATU so as to suffer expulsion.  So much was found by the Industrial Tribunal;  so much has not been in dispute before us.

	2.	In the result each was prima facie then entitled as a matter of law:

		a.	to present a complaint to an Industrial Tribunal that he had been unjustifiably disciplined (Section 66(1));

		b.	to have a declaration by the Tribunal to such effect (Section 66(3)); and 

		c.	thereafter to have an award of compensation against FTATU assessed by the Employment Appeal Tribunal or the Industrial Tribunal (Section 67(1)).

	3.	Again, as at that date, FTATU had in law the power to curtail its liability to compensate.  If it revoked the decision to expel or took all steps necessary to secure such revocation the assessment of compensation would be reserved to the Industrial Tribunal and not the Employment Appeal Tribunal (Section 67(2)).  An award of compensation by the latter has to equal or exceed a mandatory minimum award, that by the Industrial Tribunal is not so controlled (Section 67(8)).

	4.	In the event, as at the 31st December 1993, the Applicants were still expelled, still awaiting a declaration by the Industrial Tribunal, and still awaiting a compensation award with its size in part speculative that is, dependent upon the Union's reaction to the merits of the expulsion, whether in anticipation of, or in reaction to the declaration.

	5.	We are entirely satisfied (viewing the problem as a mixed question of fact and law) that as at transfer FTATU had an 'engagement' to each Applicant.  As to this, an outstanding obligation to pay compensation, (with such subject to some control by revocation of the decision to expel or by taking all steps necessary to secure such revocation) has all the hall marks of an 'engagement', very similar to an obligation to process any outstanding appeal from a disciplinary action such as is caught by Clause 12 of the Instrument. This latter obligation (which necessarily includes giving effect to the adjudication) is a plain 'engagement.  It would indeed be astonishing if the outstanding obligation to each Applicant were not a like 'engagement'.

	6.	We are similarly satisfied, again as a mixed question of fact and law, that by the Instrument these engagements were transferred to the GMB so that for the purpose of honouring them that Union 'stands in the shoes' of FTATU.  True, the GMB's scope for response is controlled by its own rules but such cannot surely be drafted so as to inhibit it from honouring, as transferee, FTATU's engagements, say, by resolving that a determination by FTATU that infringed an Applicant's rights should be revoked - or, perhaps, be deemed to stand revoked - so that in either event that Applicant was in continuous membership of FTATU up to, and at the effective date and so that, further, advantage is taken of Section 67(2).  Again, if FTATU had a prospective obligation to pay compensation was not that obligation similarly transferred?  What in law prevents GMB honouring that engagement?  In taking this view as to the effect of the Instrument we have been influenced by two other considerations that merit mention.

		a.  We are satisfied that this Instrument was drafted to be all embracing and that it should be so construed.  Since hearing argument, we have perused The Trade Unions and Employers' Associations (Amalgamations etc) Regulations 1975, Schedule 2, paragraph 3:-

			"The instrument shall specify any property held for the benefit of the transferor organisation ..... which is not to be vested in the appropriate trustees ..... and shall state the proposed disposition of any such property."

		Should not engagements that were not to have been transferred have been similarly identified so as to escape the otherwise all embracing terms of the Instrument?

		b.  Section 98(1) stipulates approval of the Certification Officer for the Instrument and indeed that seemingly was forthcoming - it is difficult to envisage approval if the Instrument left engagements outside the transfer without identifying the alternative disposition.

	7.	Averting to the estoppel argument, we accept Mr Hogarth's submission that the conduct of the GMB acting by Parsons cannot exclude an argument that the position in law is other than that represented.  But we remind ourselves that the question as to whether the Instrument served to transfer 'engagements' to each of the six Applicants is a mixed question of fact and law.  Whether we need to become involved in the niceties of 'estoppel', we are surely entitled to infer from the conduct of Parsons that as a matter of fact GMB listed amongst the engagements that it was believed had transferred from FTATU to the GMB, the engagements to the six Applicants.

	8.	We agree with Mr Bear that it would be surprising if the Applicants were in a position worse than that of a creditor of FTATU as at the effective date, such having the protection provided by Section 97(3).  As appears from the foregoing, we do not regard them as so disadvantaged.

	In summary, we reject the submission of Mr Hogarth on this preliminary point and we hold that the GMB are the proper Respondents to these applications so as to be liable to the Applicants as may be found by this Tribunal.

	Before we proceed to the next stage of this hearing we would like to avert to an initial matter of concern.  Well before this Tribunal proceeds to assess compensation, a full proof of his evidence must be forthcoming from each Applicant and copies made available to the Respondent and to each member of this Tribunal.  As will have been apparent we were dismayed and indeed astonished to learn that just two proofs were available at the outset of the hearing and neither had been copied for the benefit of the Respondent.  Mr Bear's submission that this elementary step should await an order for simultaneous mutual exchange of witness statements is roundly rejected.  It is for the Applicants to make out their respective cases and the sooner they reveal such in full the better.  If the Respondent is minded to adduce evidence then we anticipate that a similar courtesy will be extended by provision of a copy proof or copy proofs to the Applicants and to this Tribunal.  The latter is assisted by an opportunity for prior reflection, by the expedition that arises from acceptance by the parties of all or part of a disclosed proof as the evidence and by submissions that reflect considered preparation on the basis of disclosed evidence.  This Tribunal is not assisted by the formal rigour of mutual exchange, however appropriate such may be in the 'arms length' stances inevitable in commercial litigation.