LANSING LINDE SEVERNSIDE LTD v MR R J SPIERS [2002] UKEAT 1490_01_2012

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2002] UKEAT 1490_01_2012Case No Appeal No. EAT/1490/01Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
LANSING LINDE SEVERNSIDE LTDAPPELLANTMR R J SPIERSRESPONDENT
Before
His Honour Judge J McMullenDate 20 December 2002
[1]APPEARANCES For the Appellant MR R A MEAD (Consultant) Robert and Susan Mead Personnel Consultancy Partnership 186 Redlands Road Penarth Vale of Glamorgan CF64 2QS For the Respondent Written Representations JUDGE J McMULLEN QC This case is about the TUPE Regulations 1981and breach of contract of employment. It arises out of proceedings conducted before Mr A C Tickle, Regional Chairman of Employment Tribunals sitting at Bristol on 17 October 2001 promulgated on 14 November 2001. The Applicant was represented by Counsel and the Respondent by Mr Mead, Employee Consultant. The Chairman decided that the Applicant was entitled to damages in the sum of £14,385 in respect of his claim for breach of contract. Against that decision the Respondent in those proceedings now appeals. I will continue to refer to the parties as Applicant and Respondent. This judgment is given pursuant to at the Employment Tribunals Act, Section 28(4) (Judge alone).[2]The Applicant worked for the Respondent and its predecessor since the mid-1970s. Under a collective agreement which was incorporated into his contract of employment on 15 May 1991, he was entitled to an enhanced redundancy payment in the event of dismissal for that reason. In 1999 a joint venture was established and the business in which the Applicant worked transferred to the Respondent on 1 June 1999. There was full consultation with trade unions. On 19 May 1999 new terms of conditions of employment were offered and the Applicant accepted these on 21 May to take effect on 1 June 1999.[3]The Applicant had a choice whether to accept the terms or not. A significant number of employees employed in the old business chose to remain on their existing terms. The majority accepted new ones. As the Chairman put it:
"In 2001, the ramifications of this struck home. The applicant was dismissed as redundant. He received a redundancy payment in accordance with the new terms and conditions of employment. The payment reflected the redundancy scheme."
[4]The outcome was that instead of being entitled to an enhancement of 87¼ weeks pay he received ordinary redundancy pay. The issue for the Chairman to determine was why the terms had changed. It had been contended by the Respondent that the Respondent wished to harmonise pay scales and wanted everybody on the same conditions. The Chairman was referred to the relevant authorities namely: Daddy's Dance Hall [1988] IRLR 315 , Rask [1993] IRLR 133 and Wilson v St Helens Borough Council [1996] IRLR 320 - a decision of the EAT which was not affected by subsequent judgments on this particular issue. Referring to what the Chairman regarded as an engaging argument on behalf of the Respondent, this case concerned an employee who was free to choose or not choose the new conditions. Regulation 5 of TUPE transposes Article 3 of the Acquired Rights Directive. According to the holding of the European Court of Justice in Daddy's Dance Hall (above), if national law permits alteration of employment contracts, even if it is unfavourable to the workers, such alteration may be permissible even if in the meantime the undertaking has been the subject of a transfer. But it should be noted that such a change would be lawful only if the transfer of the undertaking was not the reason for the alteration. If the reason for the alteration was the transfer, protection under TUPE is engaged there is no provision for an employer to waive his or her rights period.[5]As was made clear by the EAT in Wilson (above) in circumstances such as these there is to be consideration of whether or not there is a causal link between the variation of the terms and conditions and the transfer of the undertaking. If there is such causal link then the employee is entitled to be regarded as being employed on the old terms and conditions.[6]That was a correct self direction. The Chairman then went on to find that such causal link "clearly exists". He said:
"No evidence for a reason for the change in terms and conditions has been put forward. Mr Mead has suggested the harmonisation of pay scales. That in itself would not permit a change at the time of the transfer without going down a wholly different route, because that is an economic, technical and organisational reason for the change in terms, and irrelevant for the purposes of this case. The causal link between the change and the transfer is inescapbable."
[7]In saying there was no evidence of a reason for the change the Chairman was clearly aware of the reason put forward ie harmonisation but indicated that that was not a valid reason which would allow the Respondent to escape the rigour of TUPE. In my judgment his finding of a causal link is a question of fact upon which there was evidence. The Chairman was entitled to conclude:
"It is only because of the transfer that they did change."
[8]Mr Mead argued as he had before the Chairman that TUPE was not engaged. The Applicant did not appear before me but relied upon Skeleton Argument and written submissions produced by Miss Helen Gower of Counsel on his behalf. In my judgment the Chairman's acceptance of the submission made by Miss Gower at the hearing about the inability of an employer to waive rights under TUPE is correct. The principle set out in the ECJ cases cited above were applied by the Employment Appeal Tribunal in Wilson . The EAT treated the issue in that case as one of variation of terms and conditions whereas on appeal to the Court of Appeal and the House of Lords the facts were treated as involving dismissal, so the issue of variation did not directly arise. In my judgment the Chairman in the present case correctly focussed on Wilson in the EAT which held that Regulation 5(1) of TUPE precluded even a consensual variation in the terms of a contract if the transfer was the reason for the variation: See page 719 paras f - h. In my judgment the speech of Lord Slynn in Wilson [1998] IRLR 706 in the House of Lords relied on by Mr Mead does not assist him since it dealt obiter with variation. Nevertheless, such comments as he made at page 715 in paragraphs 88 and onwards were consistent with the judgment of the Employment Appeal Tribunal in relation to variation. Lord Slynn pointed out (see paragraph 90) that variation may still be due to the transfer even if it comes at a later date.[9]Further, in Credit Suisse First Boston (Europe) Ltd v Padiachy [1998] IRLR 504 and Credit Suisse Boston (Europe) v Lister [1998] IRLR 700 it was made clear that the principles laid down in the ECJ authorities cited above apply even where an employee is given a choice as to whether he or she wished to accept new terms.[10]In these circumstances I accept the contention that it is irrelevant, that the facts in this case indicate a voluntary acceptance by the Applicant of the new terms. See paragraph 34 of the Court of Appeal judgment in Credit Suisse v Lister (above).[11]Alternatively it is argued by Mr Mead that the Tribunal gave a narrow interpretation to the facts. I reject that contention. The facts are clearly set out by the Chairman and he was requiered to form the view on the essential factual issue of whether or not there was a causal connection between the transfer and the variation. He found that, absent a relevant transfer, the old employer would not have changed the conditions in 1999. In my view the proximity of the change to the transfer makes the conclusion of a causal link not only one which is open to the Chairman but one which in my view is inescapable.[12]For the above reasons I rejected both substantive grounds of appeal argued before me on 8 November 2002. The appeal is dismissed.