Mr K Carter and others v Steadfast Security Solutions Ltd and Alpha Security: 2500065/2019 and others
JUDGMENT
There was a relevant transfer (service provision change) from the First Respondent to the Second Respondent with effect from 7 December 2018 pursuant to regulation 3(1)(b)(ii) of the Transfer of Undertakings (Protection of Employment) Regulations 2006. EMPLOYMENT TRIBUNALS Claimant:(1) Mr K Carter(2) Mr D Hopper(3) Mr S Littlemore(4) Mr W B Long(5) Mr T Todd Respondent: (1) Steadfast Security Solutions Limited (2) Alpha Security Heard at: Manorview, Newcastle-upon-Tyne On: 4 September 2019 Before:REASONS
[1]On 4 September 2019, I issued a judgment with oral reasons. I have been asked to provide written reasons for my judgment.[2]This was a public preliminary hearing to determine 5 issues that are common to each of the claimant's claims. In summary, each of the claimants were employed by the first respondent as security officers at Sunderland Football Club (the “Club”). The Club stopped using the services of the first respondent on or around 7 December 20I8 after a tendering process had taken place, in which the first respondent was unsuccessful. The second respondent claims that it was asked by the Club to escort the security staff off the site on 7 December 2018 and was asked to provide emergency cover at the Club. The first respondent claims that the claimants were transferred to the second respondent under a Service Provision Change pursuant to Transfer of Undertakings (Protection of Employment) Regulations 2006 ("TUPE") regulation 3. The second respondent denies that there was a Service Provision Change.[3]At a private preliminary hearing on 12 June 2019, Judge Arullendran identified the following issues that fell to be determined:a. Have activities by a contractor ceased which are instead carried out by a subsequent contractor on the same client's behalf?b. Are the activities fundamentally or essentially the same as the change as before?c. Was there immediately before the change an organised grouping of employees which had as its principal purpose the carrying out the activities on behalf of the client?d. Where the claimants employed by the transferor immediately before the transfer?e. Where the claimants assigned to the organised grouping of resources or for the subject to the transfer?[4]The Second Respondent did not attend the hearing and was not represented. I made enquiries as to their whereabouts. I was satisfied that they had been notified of the hearing and the change of venue to Manor View House and I proceeded with the hearing in their absence. I believed that it was in the interests of justice to do so and commensurate with the overriding objective.[5]There was a joint hearing bundle. I heard evidence from Mr Mike McGann, the first respondent's Business Development Manager and the first claimant. Both men adopted their witness statements. Mr Ferguson tendered written submissions. Both representatives made oral submissions.[6]In reaching my decision, I have considered the oral and documentary evidence, the submissions and my record of proceedings. The fact that I have not referred to every document produced in the evidence bundle should not be taken to mean that I have not considered it.[7]The claimants and the first respondent both claim that there was a Service Provision Change and they must establish this on a balance of probabilities.[8]Having considered the evidence, I make the following findings of fact:a. On 18 April 2016, the first respondent was contracted to provide security services to the Club. These services were previously provided by a different Service provider called Axis. However, Axis ceased to provide those services on a re-tendering exercise and the new contract was awarded to the first respondent. All of the claimants except Mr Todd were transferred from Axis to the first Respondent under TUPE.b. The contract become operational on 16 May 2016. All the claimants worked at the Club's premises.c. On 26 July 2018, Paul Harbord, the first respondent's Security and Group Associate Director, met Tony Davison, the Club's new managing director. He told Mr Harbord that he wanted to cut costs and he was looking at the provision of security services.d. On 18 September 2018, the Club invited the first respondent to re-tender for the security contract. It duly responded to the invitation to tender which it submitted to the Club.e. The Club did not award the new contract to the first respondent. Instead it awarded the new contract to the second respondent. The Club notified the first respondent of this on 16 October 2018.The contract between the Club and the first respondent required 3 months’ notice of termination.f. On 22 October 2018, Mr McGann wrote to Mr Davison asking when the Club would issue its 3-month termination notice so that the first respondent could start the TUPE process. Later that day the first respondent wrote to the affected employees, including the claimants, to notify them of the contract award to the second respondent.g. Mr McGann heard rumours that the Club were having second thoughts about awarding the contract to the Second Respondent. This was around 16 November 2018. He approached the Club again to discuss re-tendering for the contract, but he never received a response.h. On 3 December 2018, the third claimant e-mailed the first respondent telling it that the second respondent had initiated a meeting with the claimants on 30 November 2018 and asked them to provide them with their contracts of employment. They told the claimants that they would "take over" on 16 January 2019. The third claimant asked the first respondent to provide him with a copy of his contract of employment.i. Mr Harbord wrote to the Club on 5 December 2018 to ask for formal notice of termination of the contract as none had been provided thus far. This information was required so that the first Respondent could Start the TUPE process.j. There was an exchange of correspondence between the first respondent and the Club regarding whether notice of termination had been issued. The gist of this was that the Club thought that it had issued its notice at the meeting on 8 October 2018. The Club insisted that first respondent to vacate the site on the January 2019.k. On 6 December 2018, Mr Harbord asked the Club to provide him with contact details at the second respondent so that we could progress TUPE matters. On the same day, a Junior Director at the first respondent inadvertently copied the Club into an inappropriate e-mail.l. As a result of the inappropriate email, the Club's Finance Director wrote to the First Respondent on 7 December 2018 to terminate the security contract with immediate effect because it had lost trust and confidence in the first respondent.m. The security staff working at the Club's premises were required to vacate the site and return their keys, fobs and other Club property. The first claimant, who was supposed to be working a night shift at the Club was told not to go into work.n. On 10 December 2018, Jackie Horner, the first respondent's personnel officer, wrote to the claimants and other affected employees confirming the loss of the contract and the transfer to the second respondent.o. The first respondent instructed its solicitor to write to the second respondent to confirm the TUPE arrangements, the re-assignment of the contract and provide employee liability information. The solicitor acted on his instructions on 20 December 2018.p. Later the same day, the first respondent wrote to the affected employees, including the claimants, notifying them that TUPE applied with effect from 7 December 2018 and their employment had transferred to the second respondent.q. The second respondent did not reply to the Solicitor's letter. The Solicitor wrote again on 7 January 2019.r. The first respondent wanted to mitigate hardship suffered by the claimants in the meantime and attempted to offer shifts elsewhere after 7 December 2018.s. Eleven employees provided security services at the Club's premises including the claimants. Two members of that group, Mr Gallagher and Mr Cleary were kept on by the second respondent after 7 December 2018.t. The first respondent provided the second respondent with details of all 11 employees as part of its employee liability information.u. In his evidence, the first claimant said he knew about the award of the contract to the second respondent. He said that he did not want to transfer but did not formally object to the proposed transfer. He did not expect to be transferred because he understood that the second respondent was going to cut security cover at the Club. He accepted that the first respondent had told him that he was no longer employed by them and he should take his grievance up with the second respondent.v. The first claimant worked at Seaham, another site where the first respondent provided services, between 7 December and 21 December 2018 as all of the staff had been taken off the Club's site on 7 December 2018.w. The first claimant accepted that he received a letter notifying him that part of the business in which he worked at the Club was transferred to the second respondent on 7 December 2018 and that his employment would be transferred under TUPE. He knew this because the first respondent had written to him.[9]Regulation 3 of TUPE defines a relevant transfer. For a Service Provision Change where there was then a re- tendering exercise, as alleged in this case, the activities must cease to be carried out by a contractor on a client's behalf and are carried out instead by another person on the client's behalf. The activities must be fundamentally the same by the subsequent contractor.[10]Applying the law to the facts I find as follows:a. The provision of security services provided by the first respondent for the Club at their premises in Sunderland ceased on 7 December 2018. They were taken over by the second respondent. There is nothing to suggest that the second respondent provided fundamentally different services or that they were of short duration.b. The activities being performed by the second respondent are fundamentally or essentially the same as those provided before (i.e. manned security services) at the same premises.c. Immediately before the change, 11 of the first respondent’s employees were assigned to provide security services for the Club at their premises in Sunderland. This was their principal purpose.d. All of the claimants were employed by the first respondent on 7 December 2018 (i.e. the transfer date). The claimants were assigned to the organised grouping of resources forming the subject of the transfer. There was a Service Provision Change between the first and the second respondents.[1]The claimants other than Mr Todd were represented by Mr F Ferguson, Welfare Rights Adviser. Mr Todd appeared in person. The respondent was neither present nor represented (which I note was the position at the Preliminary Hearing held on 27 November 2019 (“the November Hearing”), nor had any communication been received from the respondent or on its behalf in respect of this hearing today. In the circumstances having considered the overriding objective I decided it was appropriate to proceed with these claims.[2]I heard evidence from each of the claimants. I had the benefit of witness statements from Mr Carter and Mr Hopper and took oral evidence from the other two claimants. I had before me a small bundle of documents prepared by Mr Ferguson. The history of these claims[3]The history of these claims is set out in paragraph 1 of the Case Management Summary arising from the November Hearing.[4]A matter of importance to me is that it had been determined at a Preliminary Hearing on 4 September 2019 that the employment of the claimants had transferred to the respondent. In that regard I record that at that time the name of the respondent was Alpha Security Group Limited but, according to a search undertaken at Companies House, that name changed to BM Logistics Management Limited (Company Number 10327055) on 12 August 2019. As such, it is that name that is given above for the respondent in these cases.[5]While other claims had been and have been made arising from the circumstances of the claims before me, at this hearing those that appeared to be outstanding for my determination are set out at paragraph 5 of the Case Management Summary of the November Hearing. In short, all four claimants claimed redundancy pay and notice pay. The claimants other than Mr Littlemore claimed unfair dismissal. Mr Littlemore had claimed unfair dismissal but, as is recorded in paragraph 1 of that Case Management Summary, at a Preliminary Hearing held on 3 September 2019 Mr Littlemore’s claim of unfair dismissal had been found to be out of time.[6]Although the above summary is what is recorded in that paragraph 5, that record is not accurate in respect of Mr Littlemore in two material respects as follows:6.1 Redundancy pay At the outset of the hearing I invited Mr Ferguson to clarify the complaints that were being pursued by each of the claimants. In so doing he stated, amongst other things, that Mr Littlemore was claiming a redundancy payment. That accorded with what I had noted in paragraph 5 of the Case Management Summary of the November Hearing that the outstanding claims of Mr Littlemore were “Redundancy payment; notice pay” and, there being nothing apparent on the case file to suggest to the contrary, I accepted that at face value. I subsequently found, however, that by letter of 18 October 2019 Mr Ferguson had withdrawn Mr Littlemore’s claims against the respondent albeit then known as Alpha Security Group. I also identified that on 4 December 2019 Mr Ferguson had applied to amend Mr Littlemore’s claim so as to claim an entitlement to a redundancy payment. At the direction of Employment Judge Sweeney, on 18 December 2019 the Tribunal responded to that application to the effect that the withdrawal of Mr Littlemore’s claim had been sent to the Tribunal on 18 October 2019 and as his claims were therefore at an end, Mr Littlemore’s claim could not be amended; as such the application was refused. In these circumstances, despite the reference in paragraph 5 of the Case Management Summary at the November Hearing to Mr Littlemore claiming a redundancy payment, it is now apparent that when these cases came before me there was not an outstanding claim by Mr Littlemore in respect of entitlement to a redundancy payment which I was required or had jurisdiction to determine. On the contrary, pursuant to Rule 51 of the Employment Tribunals Rules of Procedure 2013 Mr Littlemore’s claim to be entitled to a redundancy payment came to an end when it was withdrawn on 18 October 2019. Hence, my Judgment recorded above that Mr Littlemore had withdrawn his claim to be entitled to receive a redundancy payment and, that being so, pursuant to Rule 52 of the above Rules, that claim is dismissed.6.2 Notice pay At the hearing, Mr Ferguson rightly identified that as Mr Littlemore’s claim of unfair dismissal had previously been found to be out the time, it followed that his claim for notice pay (which he had made at the same time) was also probably out of time. Article 7 of the Employment Tribunals Extension of Jurisdiction (England and Wales) Order 1994 provides that an employment tribunal shall not entertain a complaint in respect of an employee’s contract claim unless it is presented within the period of three months beginning with the effective date of termination of the contract giving rise to the claim. There are provisos that can be applicable to that provision but it is apparent that at the Preliminary Hearing of 3 September 2019 it was found that none of those provisos were applicable. At the hearing before me, Mr Ferguson did not seek to argue to the contrary. Hence I agree with Mr Ferguson that (again notwithstanding the reference in paragraph 5 of the Case Management Summary at the November Hearing to Mr Littlemore claiming notice pay) Mr Littlemore’s contract claim in respect of notice pay was presented out of time and, as such, this Tribunal has no jurisdiction to entertain it. In any event, as explained above, Mr Littlemore’s claims had been withdrawn on 18 October 2019 and, therefore, once more by reference to Rules 51 and 52 respectively, Mr Littlemore’s contract claim against the respondent came to an end on that withdrawal and is dismissed.[7]I acknowledge that in each of the above two respects the above was not the position I took at the hearing before me but I was led astray by the fact that in the above paragraph 5 of the Case Management Summary at the November Hearing it is clearly stated that Mr Littlemore is pursuing claims in respect of both redundancy pay and notice pay. That notwithstanding, as both the withdrawal of Mr Littlemore’s claims against the respondent and the three-month time limit in respect of a contract claim are matters of jurisdiction they are not something in respect of which I have any discretion, as such, I am precluded from considering these two claims of Mr Littlemore.[8]For completeness I record that there is also in that paragraph 5 a reference to Mr Long claiming notice pay but all the claims of Mr Long were against Steadfast Security Solutions Limited (“Steadfast”), which had been the first respondent to these proceedings at an earlier stage, and those claims of Mr Long were withdrawn in a letter from Mr Ferguson to the Tribunal dated 4 December 2019.The issues
[9]The issues for my determination are set out in paragraphs 7 to 9 of the Case Management Summary from the November Hearing to which I shall return below.Findings of fact
[10]Having taken into consideration all the relevant evidence before me (documentary and oral), the submissions made by Mr Todd and on behalf of the other claimants at the hearing and the relevant statutory and case law (notwithstanding the fact that, in the pursuit of some conciseness, every aspect might not be specifically mentioned below), I find the following facts that are relevant to the above claims and issues. All claimants10.1 Prior to 7 December 2018 all four claimants were employed by Steadfast and they each had continuity of employment before that, which had been preserved from previous employments by the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”).10.2 On that date of 7 December 2018 their employments transferred to the respondent, albeit then known as Alpha Security Limited (“Alpha”). Also on that date Mr Bob Hackworth of Steadfast telephoned at least Mr Carter and Mr Todd to say that the contract Steadfast had at Sunderland Football Club had been lost.10.3 In the response (ET3) submitted on behalf of the respondent it is explained, amongst other things, that the respondent has continued to provide a security service to that Football Club “on a much-reduced capacity of three manned guards” and that the number of manned guards provided is set to be reduced even further.10.4 On 20 December 2018 Steadfast wrote to the claimants to the effect that they were no longer employed by Steadfast and that their employments had transferred to Alpha. The claimants heard nothing formal from Alpha despite writing to that Company requesting information regarding their employments. That said Mr Carter did receive a telephone call from Alpha on 21 December stating that he was not employed by that Company. Alpha never provided any work or pay to the claimants.10.5 As noted above, Alpha was the previous name of the respondent. Mr Carter10.6 The effective date of termination (“EDT”) of Mr Carter’s employment was 7 December 2018. He had been continuously employed since 8 June 2006. At his EDT he was aged 57 years, his gross pay was £519 per week and his net pay was £418. He secured equally remunerative employment on 6 November 2019. He only seeks compensation for unfair dismissal calculated up to 6 March 2019, that being the end date to be used in the calculation of his payment in lieu of notice.10.7 On 21 December 2018 Mr Carter submitted a formal grievance to the HR Department of Steadfast who replied on 8 January 2019 stating that his grievance should be taken up with Alpha. Mr Hopper10.8 Mr Hopper’s EDT was 7 December 2018. He had been continuously employed since 2 January 2003. At his EDT he was aged 54 years, his gross pay was £378 per week and his net pay was £322 per week. He secured alternative equally remunerated employment on 10 January 2019. Mr Todd10.9 Mr Todd’s EDT was 7 December 2018. He had been continuously employed since 2 August 2013. At his EDT he was aged 57 years, his gross pay was £220 and his net pay was £200. He secured alternative, better remunerated employment on 30 May 2019. Consideration and decision[11]For the reasons set out above, there are no outstanding claims by Mr Littlemore before me for determination. In this section of these Reasons, therefore, references to “the claimants” are references to Mr Carter, Mr Hopper and Mr Todd alone to the exclusion of Mr Littlemore.[12]Referring to the issues contained in paragraphs 7 to 9 inclusive of the Case Management Summary at the November Hearing my findings are as follows: Unfair dismissal[13]The claimants were dismissed by the respondent.[14]The claimants were dismissed by the respondent before or after a relevant transfer as is referred to in Regulation 7(1) TUPE. Given what is set out above as taken from the response submitted on behalf of the respondent and the evidence of the claimants, I am satisfied that the sole or principal reason for the dismissals of each of the claimants was an economic, technical or organisational reason entailing changes in the workforce of the respondent in accordance with Regulation 7(2) of TUPE.[15]The reason for the dismissals was that the claimants were redundant in accordance with Section 98(2)(c) of the Employment Rights Act 1996 with reference to Section 139 of that Act.[16]Thus the dismissals were not automatically unfair. By reference to the considerations contained in Section 98(4) of that Act (including that I find that the respondent acted unreasonably in treating redundancy as a sufficient reason for dismissing the claimants), however, each of the dismissals was unfair. Thus each of the claimants was unfairly dismissed by the respondent.[17]Each of the claimants is entitled to a redundancy payment in accordance with Section 139 of the Act. Notice pay[18]Each of the claimants was dismissed without notice. Mr Carter and Mr Hopper were each entitled to the minimum statutory period of twelve weeks’ notice. Mr Todd was entitled to the minimum statutory period of five weeks’ notice.[19]The respondent neither gave to those claimants any notice nor made any payment to them in lieu of the notice to which they were respectively entitled. Awards[20]In light of the above findings and decisions, the awards payable to the claimants are as set out below. I first make a preliminary point, however, that in the Schedules of Loss that Mr Ferguson had prepared on behalf of the claimants whom he represented he had claimed a 25% increase in the compensatory awards for unfair dismissal that he had calculated in respect of Mr Carter and Mr Hopper on account of the respondent’s failure to follow the Acas Code of Practice due to what he described as being its wilful refusal to carry out any grievance procedure. Although I accept that I did not make this point at the hearing, it is expressly stated in the Acas Code of Practice on Disciplinary and Grievance Procedures (2015) that it only applies in two sets of circumstances: first, to disciplinary situations and not where, as in these cases, the reason for the dismissal is redundancy; secondly, to grievance situations. Only Mr Carter gave evidence that he had submitted a formal grievance. None of the other claimants stated that he had similarly raised a grievance. The difficulty with the grievance raised by Mr Carter, however is that he had submitted it to Steadfast on 21 December 2018. As the transfer of the undertaking between Steadfast and Alpha occurred on 7 December 2018, Steadfast was no longer his employer when he submitted the grievance and although his evidence was that Steadfast had replied on 8 January 2019 stating that his grievance should be taken up with Alpha it appears that he did not do that. As such, even Mr Carter did not raise a grievance with his employer. The combination of these various factors that none of the claimants other than Mr Carter raised a grievance and he did not raise a grievance with his employer is that I am unable to apply an increase to any of the awards that I have made pursuant to Section 207A of the Trade Union and Labour Relations (Consolidation) Act 1992.[21]The awards to the claimants are as follows:[22]Mr Carter: Mr Carter is entitled to a redundancy payment of £9,144 Mr Hopper: Mr Hopper is entitled to a redundancy payment of £6,600 Mr Todd: Mr Todd is entitled to a redundancy payment of £1,650 Compensation for wrongful dismissal – notice pay[23]Mr Carter: The compensatory payment due to Mr Carter is £6,270. Mr Hopper: The compensatory payment due to Mr Hopper is £1,955. Mr Todd: The compensatory payment due to Mr Todd is £1,250. Compensation for unfair dismissal[24]The basic award to which each of the claimants would have been entitled has been subsumed within the redundancy payment referred to above.[25]As to the compensatory award:25.1 Neither Mr Carter nor Mr Hopper made any claim for loss of earnings but did claim a payment in respect of loss of statutory rights in respect of which I award £300. The compensatory award in their cases is therefore £300.25.2 Mr Todd is entitled to a compensatory award comprising compensation for loss of income of £4,000 (that being calculated by reference to the period of 20 weeks commencing with the expiry of his notional notice period of 11 January 2019 until he secured alternative, better remunerated employment on 30 May 2019) to which is added £300 for loss of statutory rights. Thus a total compensatory award of £4,300. Recoupment Regulations[26]The Recoupment Regulations do not apply to the award made to Mr Carter referred to above. Those Regulations do apply, however, to the awards made to Mr Hopper and Mr Todd. At the hearing I explained the operation of the Regulations the details of which are set out in the Annexure to this Judgment.[27]Mr Hopper received Universal Credit/Jobseekers Allowance (that is what he thought the award was called) for a period of one month. In respect of Mr Hopper, therefore, the required particulars are as follows: Monetary award: £300 Prescribed element: nil Period to which prescribed element relates: 7 December 2018 to 6 March 2020 Excess of monetary award over prescribed element: £300[28]Mr Todd received Jobseekers Allowance. In his case he claimed in January 2019 and received Jobseekers Allowance in February 2019. In respect of Mr Todd, therefore, the required particulars are as follows: Monetary award: £4,300 Prescribed element: £4,000 Period to which prescribed element relates: 7 December 2018 to 6 March 2020 Excess of monetary award over prescribed element: £300 EMPLOYMENT JUDGE MORRIS