THE HONOURABLE MR JUSTICE SINGH
Preliminary
1.
The Appellant is not represented at the hearing before this Tribunal for
reasons which are set out in a letter of today’s date, 12 March 2013, faxed
this morning. This is due first to the Appellant’s financial constraints which
have meant that it has not been possible to instruct counsel on her behalf to
represent her at the hearing of her appeal. Secondly, the solicitor with the
conduct of the matter is unwell and has to attend his doctor today.
Accordingly, there is no representation at the hearing before me on behalf of
the Appellant. Nevertheless, the same letter makes it clear that the Appellant
wishes the appeal to proceed today on the basis of the skeleton argument which
has been filed on her behalf.
2.
The Respondent has been represented by Mr O’Reilly who has also wished
the hearing to proceed and has very fairly sought to put such points as could be
advanced on behalf of the Appellant if she had been represented today.
Introduction
3.
The Appellant was employed by the First Respondent to the Employment
Tribunal proceedings from 14 August 2007 until 12 August 2011. On that date
she was dismissed summarily on grounds of gross misconduct. She lodged an
appeal. In the meantime, a transfer of the care home where she had worked for
the First Respondent took place on 30 September 2011. The Second
Respondent took over responsibility for that care home. A number of employees
who were still in place at that date were transferred to the employment of the Second
Respondent and no issue has been taken about that.
4.
On 7 December 2011 the Appellant issued her claim in the
Employment Tribunal alleging unfair dismissal and also racial discrimination.
In fact, this appears to have been slightly out of time but the claim was
accepted as being within the jurisdiction of the Tribunal and that point is not
material to the present appeal.
5.
On 23 December 2011 the Appellant applied to join the Second Respondent
as an additional Respondent and not simply as a substitute in the Employment
Tribunal proceedings.
6.
On 30 January 2012 the Employment Judge sitting alone refused
that application in the following terms which were conveyed in a letter on
behalf of the Employment Judge:
“The Judge has refused the application on behalf of the Claimant
to add Four Seasons as an additional Respondent. There is no claim that the
transfer was the reason (or principal reason) for the dismissal of the Claimant
was any pending transfer. There is no evidence to support the contention that
the employment continued after the dismissal on 12 August 2011 pending the
appeal. The Claimant would not therefore have been an affected employee within
Regulation 4(3) of the 2006 Regulations at the date of the TUPE transfer and so
any employment or liability in connection with employment would not pass to the
transferee.”
7.
The Appellant applied for a review of that decision on 13 February
2012. The decision on that review was made on 2 March 2012. The Employment
Judge confirmed her earlier decision. The reasons conveyed in a letter of 2
March were as follows:
“… I have come to the same conclusion. The principles I have
applied are as follows:
1 Where there is a TUPE transfer (as here) the employment of
employees employed immediately before the transfer is the subject of an
automatic novation to the transferee. The Claimant was not employed
immediately before the transfer.
2 That principle also covers employees who were dismissed
before the transfer but where the reason for the dismissal was the transfer.
That is not suggested to be the case here.
3 Any liability in respect of any employees who were
dismissed before the transfer but for other reasons does not transfer to the
transferee. That is the case here.
4 The fact of a pending appeal against dismissal does not
mean that the employee was still employed for the purposes of the TUPE Regulations
unless there is a contractual provision to the contrary. It is not suggested
here that there is any such contractual provision. You have stated that
‘[t]here is copious statutory and common law support’ for your contention that
the employment does continue, but you have not cited any.
5 The G4S Justice Services (UK) case is not
support for that contention. It is support for the propositions that any
obligation to consider an appeal remained with the dismissing transferor, and
that if successful then the dismissal would vanish (following Roberts v
South West Trains) and would then be the subject of the transfer to the
transferee.
6 The fact (if it be a fact) that the Claimant may be
deprived of a remedy due to the financial position of the Respondent does not
affect the legal position.”
8.
When the Appellant initially sought to appeal against that decision the
President of this Tribunal, Langstaff P, made a decision under rule 3(7) of the
Employment Tribunal Rules saying that there was no arguable basis for such an
appeal. However, as was her right, the Appellant pursued the application
further at an oral hearing and on 14 August 2012 HHJ David Richardson allowed
the appeal to proceed. Accordingly, the appeal has come before me, sitting
alone, today by way of a full hearing.
Material legislation
9.
As is well known the legal consequences of a transfer of undertakings
are addressed by the Transfer of Undertakings (Protection of Employment) Regulations
2006 (SI 2006/246) (TUPE) Regulation 4 provides so far as material:
“(1) … a relevant transfer shall not operate so as
to terminate the contract of employment of any person employed by the
transferor and assigned to the organised group of resources or employees that
are subject to the relevant transfer which would otherwise be terminated by the
transfer. But any such contract shall have effect after the transfer as if
originally made between the person so employed and the transferee.
(2) Without prejudice to paragraph (1) but subject to paragraph
(6) and Regulations 8 and 59 on the completion of a relevant transfer (a) all
the transferors rights, powers, duties and liabilities under or in connection
with any such contract shall be transferred by virtue of this Regulation to the
transferee and; (b) any act or omission before the transfer is completed of or
in relation to the transferor in respect of that contract or a person assigned
to that organised grouping of resources or employee shall be deemed to have
been an act or omission of or in relation to the transferee.
(3) Any reference in paragraph (1) to a person employed by the
transferor and assigned to the organised grouping of resources or employees
that is subject to a relevant transfer is a reference to a person so employed
immediately before the transfer or who would have been so employed if he had
not been dismissed in the circumstances described in Regulation 7(1) including
where the transfer is effective by a series of two or more transactions, a
person so employed and assigned or who would have been so employed and assigned
immediately before any of those transactions …”
10.
Regulation 7 so far as material provides:
“(1) Where either before or after a relevant
transfer any employee of the transferor or transferee is dismissed, that
employee shall be treated for the purposes of part 10 of the 1996 Act (Unfair
Dismissal) as unfairly dismissed if the sole or principle reason for his
dismissal is (a) the transfer itself or; (b) a reason connected with the
transfer but is not an economic, technical or organisational reason entailing
changes in the work force …”
11.
As is well known Regulation 7 gives effect in statutory form to the
previous law on the predecessor Regulations to be found in the decision of the
House of Lords in Litster v Forth Dry Dock & Engineering Company Ltd
[1989] ICR 341. That decision required a purposive approach to be given to the
then TUPE Regulations in this country so as to give full effect to the Acquired
Rights Directive which the Regulations were intended to implement in domestic
law.
12.
Returning to the 2006 Regulations, it is also important to refer to Regulations
11 and 12. Regulation 11 provides that the transferor shall notify to the
transferee the employee liability information of any person employed by him who
is assigned to the organised grouping of resources or employees that is the
subject of a relevant transfer in writing or by making it available in a
readily accessible form.
13.
The employee liability information means the identity and age of the
employee, the particulars of employment that an employer is obliged to give an
employee pursuant to section 1 of the 1996 Act, information of any disciplinary
procedure taken against an employee or a grievance procedure taken by that
employee within the previous two years and other relevant information.
14.
It is important to note that the remedy for failure to notify of such
information is set out in Regulation 12. That enables the transferee to
present a complaint to an Employment Tribunal that the transferor has failed to
comply with any provision of Regulation 11. The Employment Tribunal on such a
complaint has power to make a declaration and to make an award of compensation
to be paid by the transferor to the transferee.
The Appellant’s submissions
15.
Although it has not been possible for this Tribunal to hear oral
argument on behalf of the Appellant, I have taken fully into account the
succinct and well presented submissions in a skeleton argument.
16.
The mainstay of the Appellant’s submissions, which is to be expressed in
various parts of that skeleton argument, can be summarised in this way. The
Appellant submits that her employment status was preserved by the fact that she
had an appeal pending challenging her dismissal at the time of the transfer and
which had not been resolved; see for example paragraph 15 of her skeleton argument.
Similarly at paragraph 19 she submits that the Appellant’s employment was
preserved by her pending appeal when the transfer took place.
17.
At paragraph 20 in a similar vein she submits that:
“Since the Appellant had an outstanding appeal at the date of
transfer she ought to been treated for the purposes of TUPE in effect as
suspended.”
18.
The lynchpin upon which the Appellant relies to advance those
submissions is the decision of this Tribunal in G4S Justice Services (UK)
Ltd v Anstey & Ors [2006] IRLR 588, a decision of HHJ Peter Clark
sitting alone. In that case the two claimants were summarily dismissed for
alleged gross misconduct on 13 April 2005. They both lodged internal appeals
against dismissal as required within 14 days.
19.
The relevant contract in that case was terminated on 30 April 2005 and
G4S took over from GSL on 1 May 2005. At the time of transfer therefore, the claimants’
appeals had yet to be determined. Subsequently in late June/early July 2005
GSL, in other words the transferor, heard those appeals. In the result both appeals
were successful, their dismissals were overturned and their reinstatement was
directed. However, GSL no longer had any work for them as the contract had
gone. A preliminary issue came before the Tribunal as to who was the correct
employer. On the appeal before this Tribunal the question was formulated on
behalf of the appellant, that is the transferee, G4S, in the following way:
“Is an employee who has been dismissed by the transferor, but
whose appeal is yet to be heard, employed in the undertaking that is
transferred within the meaning of Regulation 5 of TUPE?”
20.
I should interpose that that of course is a reference to the predecessor
Regulations and Regulation 5 would now read Regulation 4.
21.
The answer which Judge Clark gave to that question was, “It depends”.
He then proceeded to set out his explanation by way of analysis in answering
that question. From paragraph 12 he referred to the decision of the Court of
Appeal in Sainsbury v Savage [1980] IRLR 109 in which the
decision of this Tribunal was upheld. In giving the leading Judgment
Brightman LJ, as he then was, approved the following passage from the Judgment
of the then President of this Tribunal, Slynn P, as he then was, [1978] IRLR
479 at page 481:
“In our view where notice of immediate dismissal is given the
dismissal takes immediate effect. The provisions of this contract as to the
appeal procedure continue to apply. If an appeal is entered then the dismissed
employee is to be treated as being, “suspended” without pay during the
determination of his appeal in the sense that if the appeal is successful then
he is reinstated and he will receive full back pay for the period of the
suspension. If the appeal is not successful and it is decided that the original
decision of instant dismissal is right and is affirmed, then the dismissal
takes effect on the original date. In our view, that is the date on which the
termination takes effect for the purposes of the act.”
22.
As Judge Clark observed after that passage:
“It will be recalled that the disciplinary procedure in Savage
expressly provided for the contract to be suspended pending appeal.”
23.
At paragraphs 14 and 15, Judge Clark noted that in West Midlands
Co-Operative Society Ltd v Tipton [1986] IRLR 112 in the House of
Lords, Lord Bridge of Harwich approved the reasoning in Savage.
24.
At paragraph 17 Judge Clark turned to the question which was, in fact,
the question before this Tribunal in that case:
“What if the appeal is successful, the dismissal is overturned
and the employee is reinstated?”
25.
Judge Clark drew assistance in answering that question from the case of Roberts
v West Coast Trains Ltd [2004] IRLR 788 in which the lead judgment in
the Court of Appeal was given by Mummery LJ.
26.
At paragraph 21, Judge Clark said:
“What I draw from Roberts is the concept of the
vanishing dismissal viewed retrospectively. Mr Roberts was dismissed at the
time when he presented his complaint of unfair dismissal to the Tribunal, thus
giving the Tribunal jurisdiction to hear that complaint. However, the
dismissal vanished looking back as a result of the internal appeal which he had
initiated.”
27.
At paragraph 31 of his Judgment, Judge Clark considered the question ‘does
it make a difference that their appeals were not heard before the transfer date?’
And concluded that it does not. Having said earlier in his Judgment that the
answer to the issue posed for this Tribunal was, “it depends” Judge Clark
returned to this theme in his conclusion at paragraph 35 and answered the question
in the following way:
“It depended on whether the appeals against dismissal succeeded
and reinstatement was ordered. GSL did uphold the appeals and revoked the
earlier dismissal. The Claimants under TUPE were in no worse position than
their colleague …”
28.
In other words, Judge Clark considered it to be crucial to his reasoning
that on the facts before him what had occurred was that GSL had eventually
heard the claimants’ appeals and indeed found in their favour so that the
dismissal was overturned. It did not matter that that had not yet occurred at
the date of transfer. It was in those circumstances that the Tribunal held
that the relevant employees had had their employment transferred to the
transferee. Judge Clark also considered that that conclusion was in accordance
with the purpose of the Regulations which were designed to implement the
Acquired Rights Directive, now 2001/23/EC, replacing the earlier Directive
77/187/EC.
29.
As I have said, the lynchpin for the Appellant’s submissions before me
is to be found in the decision of Judge Clark in G4S. In my
judgment that decision does not bear the weight which has been placed upon it.
The material point of distinction is that in the present case the First
Respondent had an appeal pending before it at the time of transfer but has not
to date determined that appeal, still less directed the Appellant’s
reinstatement. In those circumstances, in my judgment, the ordinary position
still applies as analysed by this Tribunal in Sainsbury v Savage
and subsequently approved by higher courts. That analysis leads to the
conclusion that if an appeal is successful it will retrospectively have the
effect that an employee is no longer to be treated as dismissed. However, if
the appeal is not successful then the dismissal takes effect on the original
date. The fundamental point is that when a notice of immediate dismissal is
given that dismissal takes immediate effect. That meant that so far as things
have stood to date, the effective date of termination in the present case was
12 August 2011, well before the date of the transfer between the two
Respondents.
30.
Since it is common ground there is no reason to suppose that the
dismissal had anything to do with the transfer, there would be no role for Regulation
7 of the TUPE Regulations to play. The ordinary analysis therefore still
applies.
31.
There is also some further support to be found for the Respondent’s
submissions before me, albeit obiter at paragraph 27 in the Judgment of Judge
Clark in G4S. In that paragraph Judge Clark summarised the
propositions of counsel who was appearing for one of the parties in that case
in the following way:
“His propositions proceed on the premise that the contractual
obligation to hear and determine the appeals lay with GSL not withstanding the
transfer.”
32.
At paragraph 28 of his Judgment, Judge Clark accepted counsel’s analysis
including that proposition as I understand it. In any event, as it seems to
me, that proposition by counsel was undoubtedly correct. Similarly, in the present
case, in my view, the obligation to hear and determine any appeal rested with
the First Respondent. If there has been or the Appellant considers that there
is any breach of that obligation that, as it seems to me, is a matter between
the Appellant and the First Respondent. It does not have the effect of
bringing into play the TUPE Regulations and somehow deeming the Second
Respondent to have become the Appellant’s employer, still less, as it seems to
me, does it impose an obligation on the Second Respondent to hear, conduct and
determine any such appeal. It was not the Appellant’s employer on any view at
the time of the initial dismissal. As Mr O’Reilly has submitted to me, there
would be practical difficulties for such a respondent to be able to know, for
example, the full facts of what lay behind the transferor’s decision to dismiss
an employee summarily on grounds of misconduct.
33.
I have given anxious consideration to whether the approach which the
Respondent has advanced thus far before me accords with the purposive approach
which undoubtedly has to be taken in this context, in particular having regard
to article 3 of the Acquired Rights Directive, which so far as material
provides:
“The transferor’s rights and obligations arising from a contract
of employment or from an employment relationship existing on the date of a
transfer shall by reason of such transfer to be transferred to the transferee.”
34.
In my judgment that is given full effect by the TUPE Regulations. It
does not require any further strong interpretation or the insertion of words,
for example, into Regulation 7 to arrive at a result different from the one
which I have already indicated. Regulation 7 already gives effect in a
purposive way to article 3 and refers in terms to dismissal. As I have already
indicated, the dismissal in this case had nothing to do with the transfer. In
those circumstances, as it seems to me, Regulation 7 has no role to play for
the reasons I have already given. Furthermore, I accept the submission that Mr
O’Reilly made to me as to what the underlying Directive requires; in particular
he referred me to a passage in the speech of Lord Oliver of Aylmerton in Litster
at page 637 where Lord Oliver cited an earlier decision of the European Court
of Justice in case 101/87 P.Bork International A/S v Foreningen af
Arbejdslederre I Danmark [1989] IRLR 41. At page 44 of that Judgment,
the Court of Justice said:
“The only workers who may invoke [the] Directive … are those who
have current employment relations or a contract of employment at the date of
transfer. The question whether or not a contract of employment or employment
relationship exists at that date must be assessed under national law subject
however to the observance of the mandatory rules of the Directive concerning
the protection of workers against dismissal by reason of the transfer …”
35.
The words which I have emphasised in that quotation make it clear, as
indeed the House of Lords held in Litster, that the ordinary
analysis under national law will have to be modified so as to protect a worker
against dismissal by reason of the transfer. That is now given effect by Regulation
7. In the absence of such a situation however, the question whether or not a
contract of employment or employment relationship exists at the relevant date
must be assessed under national law. The analysis which applies under national
law is the one which I have already sought to set out.
36.
Accordingly, in my judgment there is no incompatibility between domestic
legislation as construed by the courts and Tribunals of this country to date
and the requirements of the Acquired Rights Directive. For that reason no
strained interpretation of domestic law is required.
37.
Finally, I have had regard to the Appellant’s submission based upon Regulation
11 of the TUPE Regulations. In my judgment, reliance upon Regulation 11 does
not take the analysis further and does not support the Appellant’s submissions.
Regulation 11 is concerned with the relationship between the transferor and the
transferee. In particular, it imposes an obligation to provide relevant
employee liability information to the transferee. If there is a breach of that
obligation for any reason the remedy, as Regulation 12 makes clear, lies in the
hands of the transferee not, in the hands of any employee. Still less do Regulations
11 and 12 have any impact altering the analysis which I have so far sought to
give based, as I understand it, on earlier authority in this country. It does
not affect the analysis that as at the date of the transfer in this case the
Appellant was already dismissed. Accordingly, the transfer of rights and
liabilities effected by TUPE did not have the effect of making the second
Respondent the Appellant’s employer.
Conclusion
38.
For the reasons I have given, this appeal is dismissed.
