Chargecrest Ltd v McLaughlin & Anor [1995] UKEAT 105_95_1112

EAT
Chargecrest Ltd v McLaughlin & Anor
[1995] UKEAT 105_95_1112 · 1995-12-11

JUDGE CLARK :

This is an appeal by Chargecrest Ltd against a unanimous decision of the Ashford Industrial Tribunal (Chairman Mr G W Davis) that both Respondents, Mr Smith and Mr McLaughlin, had been dismissed by the Appellant on 31 October 1994 and were entitled to redundancy payments and damages representing their pay in lieu of notice. Their claims for unfair dismissal were dismissed.The background is that the Appellant is and was a security company, providing security guards under contract to businesses. Under a contract made between the Appellant and Lucas Diesel Systems ("Lucas") the Appellant supplied the services of their employees, Mr Smith and Mr McLaughlin, to Lucas at their sites at Gillingham and Rochester respectively.On 26 September 1994 the Appellant wrote to both Respondents advising them, if they did not know already, that it had lost the Lucas contract to provide security services at both the Gillingham and Rochester sites. However, the letter went on to raise the prospect of the new incoming security company being interested in employing them. Otherwise, Chargecrest would investigate possible continued employment at alternative sites.Offers of alternative employment were made, but rejected by the Respondents as unsuitable. Instead they accepted employment with the new security firm, Altek Security, on terms and conditions more favourable than with Chargecrest. They appear to have continued working as before on the Lucas sites mentioned with effect from 1 November 1994.In their extended reasons dated 13 January 1995 the Tribunal found that the letter of 26 September 1994 did not constitute notice of termination of their employment. However, the Tribunal considered that the men were dismissed on 31 October 1994, the last day of the Chargecrest contract, in that they were told by the Appellant that their employment had ceased and that they no longer worked for the Appellant.The principal ground of appeal is that the contracts of employment of both Respondents were transferred to Altek by virtue of the Transfer of Undertakings (Protection of Employment) Regulations 1981 S.I. 1981/1794 (TUPE).It is apparent to us, from the Tribunal's extended reasons, that the application of TUPE to the facts of this case was not considered by the Tribunal. Accordingly the first question which arises in this appeal is whether the point was argued before the Tribunal.It is well established law that a party will not be permitted to raise a new point of law before the Appeal Tribunal, particularly where it does not go to the Tribunal's jurisdiction, when it was not, but could have been taken below. See Kumchyk v Derby County Council [1978] ICR 1116 .Neither party was legally represented below. The Respondents appeared in person; the Appellant was represented by its Operations Manager, Mr Gilkes. If the transfer point was not taken on behalf of the Appellant below then the inexperience of Mr Gilkes would not be a ground to permit fresh argument before this Tribunal. See Kumchyk at page 1123 D.We look first at the Notices of Appearance in these cases. Both are in similar form. Each denies dismissal. The grounds for resistance set out the company's case, so far as is material, in this way:
"CHARGECREST LIMITED had the security contract for Lucas Diesel Systems at Gillingham [and Rochester in the case of Mr Smith] from 31 October 1989 to 31 October 1994.
One of its ex-partners and Operations Director in the last six months of his employ, decided to leave Chargecrest to join his son-in-law's company, Altek Security Ltd, which at this time specialised only in alarms but which now has its own guarding division.He, we have subsequently established, had been approaching all of our customers with a view to undercutting our price, keeping on the same staff and supply the same service. Lucas at Gillingham were taken in by this and the contract was given to Altek Security and because of the close liaison between our operations director and the security staff at Gillingham, they knew well in advance that they would be offered the same position with the new company.... I do know however that he [and that applies to both Respondents] was offered a job by the new security contractor and is currently employed by them.Therefore, I cannot understand why he should wish to pursue this matter as there seems to be no case to answer."Next we look at the Chairman's notes of evidence. First the evidence of Mr Smith who said:
"On 31 October the new company had taken over. This was Altek. I saw one of the Managing Directors of Altek and he offered me a job that morning. I agreed to take the job. The job was the same position as I am in now. It was an Inspector at the same site at £11,000 per annum which was a little better money, and I get an extra week's holiday now."
Mr McLaughlin said:
"I worked on the Lucas site on the Esplanade at Rochester. Rochester is an isolated site but we do occasionally have visits.
I rang at midnight on 31 October 1994. I rang in at midnight. I spoke to Controller, Mr Maher. He said `Bill, I understand you're no longer working for us'. I said `It's news to me'.As I was leaving I saw the Dutch security company and I let them in. The company asked me to stay and work with them at the same rate of pay.We had no formal notice from our employer telling us about the change. There had been no notice in writing. I started working for the new company straightaway, on a monthly basis."In our view this is not a "new point" in the sense identified in Kumchyk and later cases. Here, the employer had put in issue the fact of dismissal. His Notice of Appearance plainly, in our view, raised the issue as to whether TUPE applied, even if the Regulations were not referred to. The evidence, to which we have adverted, supported a transfer argument. In these circumstances we consider that it was incumbent on the Chairman of the Tribunal to have clarified that issue in line with Rule 9(1) of the 1993 Tribunal Rules of Procedure, and for the Tribunal to have ruled upon it. Examples of this process arise in this case. Although the complaints referred only to unfair dismissal the Tribunal, appreciating that the Applicants were laymen representing themselves, identified two further possible claims - entitlement to redundancy payments and damages for wrongful dismissal, and proceeded to rule on those unpleaded claims in favour of the Applicants. We think that by the same token the Tribunal was required to identify and rule upon the TUPE issue in order to decide the question of whether or not the Respondents were dismissed on the facts of this case.It follows, in our judgement, that the Industrial Tribunal misdirected itself in failing to determine the question of whether or not a relevant transfer had taken place, and that this decision must be set aside and the case be remitted to a fresh Industrial Tribunal for reconsideration of the whole matter. That Tribunal will wish to ask itself(1) whether a relevant transfer took place, in accordance with Regulation 3 of the 1981 Regulations as amended. See Dines v Initial Healthcare Services Ltd [1995] ICR 11(2) whether the Respondents and each of them were employed in the Appellant's undertaking immediately before the transfer. See Regulation 5.(3) If so, there was no dismissal; these complaints fail and the effect will be that the Respondents are entitled to count their service with Chargecrest as being continuous with their service with Altek.(4) If not, and the Respondents were dismissed by Altek then the Tribunal must consider;(a) what was the reason for dismissal(b) if it was redundancy, are the Respondents entitled to a redundancy payment(c) was the dismissal unfair(d) are the Respondents entitled to damages for wrongful dismissal.As to this point, we should direct the Tribunal that the common law rules apply and credit must be given for monies earned during the notice period. On the facts as found by this Tribunal, it appears that the claim for damages is extinguished by the increased earnings with Altek.In these circumstances, this appeal is allowed.