Northern General Hospital NHS Trust v Gale [1993] UKEAT 1_93_3003

EAT
Northern General Hospital NHS Trust v Gale
[1993] UKEAT 1_93_3003 · 1993-03-30
HIS HONOUR JUDGE PEPPITT QC This is an appeal from a decision of the Sheffield Industrial Tribunal made on 6th November 1992 and sent to the parties on 26th November 1992. The Tribunal held unanimously that the Applicant, the Respondent to this appeal, `did have two years' continuous service under the terms of the Employment Protection (Consolidation) Act 1978' and that accordingly there was jurisdiction to entertain his claim of unfair dismissal.The facts can be stated shortly as the only witness called before the Tribunal was the Respondent and his evidence was not in dispute. The substantive issue before the Tribunal and before us was the extent to which those facts justified the Tribunal's decision that there was jurisdiction to entertain the Respondent's claim.The Respondent started work as a full time student nurse on 9th November 1987 under a contract of employment dated 25th September 1987. His employers were the Sheffield Health Authority. The contract was expressed to be subject, inter alia, `to terms and conditions laid down by General Whitley Council for the Health Services and the Nurses and Midwives Whitley Council, and provided by clause 1(iv) as follows:
"Your appointment is for a course in REGISTERED GENERAL NURSE training in the Sheffield School of Nursing. You will undertake clinical experience within the Sheffield Health District or where necessary in other Health Authority's clinical areas as designated.
Your 146 weeks (Exclusive of annual leave) training course commences at 8.30 a.m. on 9th November 1987 at Northern General Hospital Nurse Education Centre".Clause 1(iv) concluded in the following terms:
"Your contract with The Sheffield School of Nursing will terminate on the first day after receipt of successful result in the State Final Examination, or the day after completion date or the day after the last day of your agreed programme, whichever is the latest."
We interpose here that notwithstanding the reference in the Respondent's contract of employment to `your contract with the Sheffield School of Nursing' it was not suggested to the Tribunal or to us that the School was at any time the Respondent's employer. There was no evidence before the Tribunal of the School's legal capacity and the hearing proceeded before the Tribunal and before us on the basis that, as the contract itself stated, the Respondent was employed by the Sheffield Health Authority.Upon his employment the Respondent underwent training at several hospitals but from July 1990 onwards he worked solely at the Northern General Hospital. As a result of sickness and other genuine absences his contract was extended to 3rd May 1991 although he passed his final examinations in January 1991.In February 1991 the Respondent applied to the Sheffield Health Authority for a permanent nursing post. He was interviewed in the same month and was recommended for employment by the Authority. His first choice of hospital was the Northern General.In the meantime the Northern General Hospital had applied for and was about to become a National Health Service Trust. An appropriate enabling order, the Northern General Hospital National Health Service Trust (Establishment) Order 1990, was made on 4th December 1990. It provided by paragraph 5(1) that the operational date for the Trust should be 1st April 1991.On 9th April 1991 the Respondent attended a second interview as a result of which he was offered employment as a full time staff nurse grade E by the Appellants which for this purpose had become a legal entity separate from the Sheffield Health Authority some eight days before. He was to start work on 3rd May 1991, and did so, although the letter confirming his appointment was not written until 14th May 1991.A formal contract of employment by the Appellants dated 2nd January 1992 followed. For the purpose of this appeal we refer only to clause 19 which reads as follows:

"Continuous Employment

For the purposes of the Conditions of Service applying to this post continuous employment dates from 3.5.91.For the purposes of Employment Protection (Consolidation) Act 1978 continuous employment dates from 1987."It was against this background that the Tribunal held that it had jurisdiction to entertain the Respondent's claim. The Respondent had been dismissed by the Appellants on 28th April 1992 for reasons which need not concern us. In arriving at its conclusion that he had been continuously employed by the Appellants `for a period of not less than two years ending with the effective date of dismissal' the Tribunal took into account the Respondent's previous employment by the Sheffield Health Authority and held:(i) that there had been a relevant transfer under Regulation 3(1) of the Transfer of Undertakings (Protection of Employment) Regulations 1981;(ii) that the Respondent's continuity of service on his employment by the Appellants was preserved by paragraph 17(3) of the 13th Schedule to the 1978 Act;(iii) that in any event having regard to Clause 19 of the Respondent's contract of employment the Appellants were estopped from contending that his service was otherwise than continuous from 1987.Before us Mr Allen on behalf of the Respondent did not seek to uphold the decision on the grounds relied upon by the Tribunal. He accepted that jurisdiction could not be conferred upon the Tribunal by estoppel [see Secretary of State for Employment v. Globe Elastic [1979] ICR 706 , but reserved the Respondent's right to take proceedings in the County Court against the Appellants for damages for breach of Clause 18 of his contract of employment. Nor did he feel able to support either of the other grounds relied upon by the Tribunal. Instead he submitted that the Tribunal's decision could and should be upheld either by the combined effects of the December 1990 Order and section 6 of the National Health Service and Community Care Act 1990 or by section 6 of that Act and paragraph 17(3) of the 13th Schedule to the 1978 Act. We note in parenthesis that an argument based on section 6 was addressed to the Tribunal but the Tribunal merely recorded the argument without, it seems, expressing any view upon it.The relevant parts of section 6 of the National Health Service and Community Care Act 1990 read as follows:
"6. (1) Subject to subsection (5) below, this section applies to any person who, immediately before an NHS trust's operational date - (a) is employed by a health authority to work solely at, or for the purposes of, a hospital or other establishment or facility which is to become the responsibility of the trust; or ...
...(3) Subject to section 7 below, the contract of employment between a person to whom this section applies and the health authority by whom he is employed shall have effect from the operational date as if originally made between him and the NHS trust.

(4) Without prejudice to subsection (3) above -

(a) all the health authority's rights, powers, duties and liabilities under or in connection with a contract to which that subsection applies shall by virtue of this section be transferred to the NHS trust on its operational date. ..."Applying these subsections Mr Allen argued that immediately before the operational date of the trust [ie 1st April 1991] the Respondent was employed by the Sheffield Health Authority to work solely at the Northern General Hospital. In support of this argument he relied upon the facts found by the Tribunal that he had worked nowhere else from July 1990 onwards and that apart from wearing epaulettes and changing from one ward to another his working conditions did not in any way change after 1st April 1991. Accordingly, said Mr Allen, with effect from 1st April 1991 the Respondent's contract of employment with the Sheffield Health Authority had effect as if originally made between him and the Appellants.Mr Allen's alternative submission incorporates paragraph 17(3) of the 13th Schedule to the Act. He submitted that if section 6 of the 1990 Act standing on its own did not provide the Respondent with the necessary continuity any shortfall was made good by this sub-paragraph which reads as follows:
"If by or under an Act of Parliament, whether public or local and whether passed upon or after this Act, a contract of employment between any body corporate and an employee is modified and some other body corporate is substituted as the employer, the employee's period of employment at the time when the modification takes effect shall count as a period of employment with the second-mentioned body corporate, and the change of employer shall not break the continuity of the period of employment."
Mr Allen argued that the 1990 Act had modified the Respondent's contract of employment with the Sheffield Health Authority by substituting the Trust as his employer with effect from 1st April 1991. Accordingly the continuity of service described in paragraph 17(3) arose without more.Mr Allen accepted that the foundation upon which his submissions were based was that the Respondent should be regarded as having been employed by the Sheffield Health Authority to work solely at the Northern General Hospital immediately before 1st April 1991.Attractively as it was put, we find this argument unacceptable. There is no doubt that the Respondent was working at the Northern General Hospital immediately before 1st April 1991 and had been working there for some considerable time. But it seems to us that he was not employed to work solely at this hospital. On the contrary his contract of employment with the Sheffield Health Authority required him to `undertake clinical experience within the Sheffield Health District or where necessary in other Health Authority's clinical areas' and he had in fact undertaken training under that contract at other hospitals in the Sheffield Area. In our judgment if Parliament had intended section 6(1) to embrace those employees of a health authority who whatever the terms of their employment were physically present and working at a hospital immediately before its transfer to trust status it could have said so very simply. We believe that the critical factor for the application of S.6(1)(a) is whether an employee's contract required him on the appropriate day to work solely at the relevant hospital. In our view the Respondent's contract did not.As the issue before us was purely one of construction, the assistance to be derived from decided cases was necessarily limited but we derive comfort from Rank Xerox Ltd v. Churchill Brothers [1988] IRLR 281 a decision of the Employment Appeal Tribunal upon the proper construction of the words: `the place where the employee was so employed' in S.81(2)(a) of the 1978 Act. The Tribunal held, following Sutcliffe v. Hawker Siddeley Aviation Ltd [1973] IRLR 304 , that the phrase was not to be construed as the place where the employee actually worked but as the place where by his contract he was required to work. Our approach was the same.Having reached this clear conclusion it is unnecessary for us to consider other arguments which Mr Bowers advanced in answer to Mr Allen's submissions. In our judgment for the reasons which we have given the Tribunal had no jurisdiction to entertain the Respondent's claim. Accordingly this appeal is allowed and a finding to this effect substituted for that reached by the Tribunal.We would not however wish to conclude this judgment without expressing our concern at what we see to be the possible effect of the 1990 Act upon the continuity of service for the purposes of unfair dismissal of nurses, and perhaps others, employed by a Regional Health Authority who transfer to trust hospitals within the area of that Authority. The Respondent was employed by the Sheffield Health Authority under a training contract which contained a mobility clause. We understand that many other nurses are employed on similar terms. If at the conclusion of his or her training a nurse is employed at a non-trust hospital within the Authority there will be continuity of service, for the employer will remain the same. But if the nurse takes employment at a trust hospital there will be no continuity of service since the 1990 Act applies only to those employed to work solely at the hospital immediately before the operative day.It seems that Parliament was aware that one effect of the 1990 Act would be to create this apparent anomaly. For in the course of a debate upon the Bill in the House of Lords the Parliamentary Under-Secretary of State for the Department of Health, Baroness Hooper, stated:"It is important to draw a distinction between statutory continuity of employment, which governs rights such as an appeal to industrial tribunals and recognition of service for purposes such as the calculation of leave entitlements. There is no statutory continuity of employment between health authorities, nor will there be between authorities and trusts . However the recognition of NHS service is laid down in Whitley Council bandbooks. If amendments to those agreements and handbooks are needed to recognise service with a trust when an employee moves back to a health authority, that will be a matter for the Whitley forum." [Hansard H.L. Vol.520, col 171]. The underlining is ours.We can merely express our unanimous view that the absence of statutory continuity of employment between authorities and trusts is unfair to those nurses who take employment in trust hospitals within the area of the authority by whom they were trained and may even operate as a significant disincentive to their taking such employment. We hope that the position will be reconsidered.