MR P CARTER v 1) QATAR AIRWAYS LTD 2) AIR CARGO PARTNERS LTD [2003] UKEAT 0960_02_0306

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2003] UKEAT 0960_02_0306Case No Appeal No. EAT/0960/02Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MR P CARTERAPPELLANT1) QATAR AIRWAYS LTD 2) AIR CARGO PARTNERS LTDRESPONDENTS
Before
His Honour Judge Peter Clark Mr C Edwards Mr R N StrakerDate 3 June 2003
[1]APPEARANCES For the Appellant MR M O SETHI (Of Counsel) Instructed by: Messrs Mackrell Turner Garrett Solicitors Ibex House 61-65 Baker Street Weybridge Surrey KT13 8AH For the 1st Respondent MR COLIN HENSON Consultant Professional Personnel Consultants Ltd Enterprise House Great North Road, Little Paxton Cambridgeshire PE19 6BP For the 2nd Respondent MR COLIN PERKINS Personnel Manager Personnel Services & Management Bank House, 81 St Judes Road Englefield Green Egam Surrey TW20 0DF JUDGE PETER CLARK This is an appeal by Mr Carter, the Applicant before an Employment Tribunal sitting at Watford, under the chairmanship of Mr P Willans, against that Employment Tribunal's decision, promulgated with Extended Reasons on 17 July 2002, dismissing his complaints brought against(1) Qatar Airways Ltd (the transferor) and(2) Air Cargo Partners Ltd (the transferee). The case raises questions as to the proper application of the Transfer of Undertakings Protection of Employment Regulations 1981 (TUPE) to its particular facts. The Facts[2]The Appellant commenced employment with the Transferor on 2 November 1998. At all relevant times he held the post of acting cargo manager on the Terms and Conditions of employment contained in a written contract signed by the parties and dated 26 February 2000. By early 2001 the transferor, an airline, employed 2 men, the Appellant and Mr David Miah, in their cargo handling department, other staff in that department having left without being replaced.[3]On 11 April 2001 the Appellant and Mr Miah were informed at a meeting with Mr Selihi, the Regional Manager and Mr Bunn, cargo manager that the cargo department was to be closed and that a general service agent would take over that function. At that meeting the transferee was identified and it was indicated to both men that they could expect alternative employment with the transferee.[4]Pausing there, the Employment Tribunal found as a fact indeed it was accepted all round (reasons paragraph 15(iv)) that in April 2001 none of the parties, the Appellant, Transferor or Transferee, were aware of TUPE or its effect. However, before the Employment Tribunal it was common ground that a relevant transfer of part of the business of the Transferor was transferred to the Transferee on 1 May 2001 and that the Appellant was employed or assigned to that part of the business. In total ignorance of their legal rights and obligations the parties proceeded as follows. On 17 April Mr Bunn wrote to the Appellant, confirming that the cargo handling department would be taken over by the Transferee and that one of the consequential effects of this decision would be his redundancy. However, that letter was said not to be notice of termination of his employment; notice would only be given if suitable alternative employment was not identified within the consultation period, due to expire on 30 April.[5]On 18 April Mr Entwistle, a director of the Transferee and Mr Howard, its Chief Executive met with the Appellant and Mr Miah. The purpose was to inform them of positions with the Transferee as close as possible to their current roles. We repeat, due to their collective ignorance of TUPE none of the parties appreciated that the Appellant was entitled as a matter of law to continue his employment with the Transferee on the same terms which he enjoyed with the Transferor.[6]Nevertheless, the Appellant rejected an offer by the Transferee of a post of sales executive, insisting that his current role with the Transferor was as acting manager and he would only accept a similar function and job title within the Transferee. Pausing there, we interpose that such was his right under the TUPE provisions.[7]The Transferee made efforts to accommodate the Appellant, without acknowledging his right to continue in employment on the same terms as before. Some of the new terms offered were more favourable than those which he enjoyed with the Transferor. But he declined; instead turning his attention to the possibility of alternative employment with the Transferor.[8]Whilst pursuing other possibilities within the Transferor Company the Appellant received a further letter from Mr Bunn dated 24 April. That letter contained the following passage:
"This is to reconfirm that you will not be required to work one month's notice and therefore your last day of work with Qatar Airways will be 30 th April 2001. In view of the fact that you will not be required to work your notice period you will receive payment in lieu of notice. I trust this now clarifies this matter and I look forward to meeting with you on 30 th April at Heathrow."
[9]With that letter, we see from the Bundle before us (page 84(a)) was a memorandum to the Appellant from Mr Bunn headed 'Leaving entitlement' in which his various termination payments, including outstanding leave and lieu day entitlements and 1 month's pay in lieu of notice, were calculated.[10]On 30 April the Appellant met with Messrs Bunn, Selihi and Elkhidir. He expressed interest in the post of airport manager with the Transferor. The Employment Tribunal found as fact that at that meeting the Appellant understood from Mr Selihi that his employment with the Transferor would be extended for one week so that he could be interviewed for that position. On the same day he faxed Mr Akbar Al Baker, the Transferor's Chief Executive, in Dohar, stating that it was his last day of employment with the Transferor, indicating his desire to continue working for the Transferor and asking for Mr Baker's assistance in securing an alternative position with the Company, if necessary in Dohar.[11]On 7 May the Appellant flew to Dohar to be interviewed for the post of airport manager. He was never told of the outcome of that interview, instead he was offered employment in the cargo department based in Dohar. That offer came with a draft contract of employment.[12]Thereafter it was agreed by Mr Selihi that if the Appellant accepted the new post in Dohar he would receive his redundancy payment, pay in lieu of notice and outstanding holiday and other pay.[13]On 13 May the Appellant flew to Dohar and on 15 May signed a new contract, having received a letter from Mr Molloy, the Group Human Resources Manager dated 14 May, which confirmed agreement as to the following:
" 1. You (the Appellant) can resign from London effective 31 May 2001 2. You can join Qatar Airways in Dohar on 1 st June 2001 3. Your job will be superintendent – cargo operations."
[14]In the event the Appellant did not take up the post in Dohar. He commenced the present proceedings by an Originating Application dated 27 July 2001, in which he gave his dates of employment as 2 November 1998 to 30 April 2001. The Issues[15]At an earlier directions hearing before a chairman, Mr Pettigrew, sitting alone on 11 January 2002, the following claims by the Appellant were identified:(i) Unfair dismissal;(ii) Wrongful dismissal in that insufficient notice had been given to terminate the contract;(iii) Breach of contract and failure to pay for accrued holiday not taken and breach of the Working Time Regulations in the similar manner;(iv) Unauthorised deductions from wages. The issues were identified as follows: (i) Unauthorised deduction from wages - what was the Applicant entitled to and what did he receive? (ii) Pay for holidays: (a) what payment for holidays not taken was the Applicant entitled to under his contract and what did he receive; (b) under the Working Time Regulations what holidays was the Applicant entitled to, what had he taken and what had he been paid for. Wrongful dismissal – what notice was the Applicant entitled to and what did he receive? Unfair dismissal. (a) Was there a relevant transfer under the Transfer of Undertaking (Protection of Employment) Regulations 1981. The Respondent agreed that the Applicant was employed in the part of the undertaking transferred (cargo handling and management function including cargo sales). (b) Was the Applicant dismissed? (i) If so, was it by reason of the transfer or a reason connected to it. (ii) if not, what the reason and particularly did the Respondent show a potentially fair reason. If they show potentially fair reason did they act reasonably or unreasonably in all the circumstances in treating their reason for dismissal as a sufficient reason for dismissing the Applicant. (c) Did the Applicant object within paragraph 4(a) of the Transfer of the Undertaking Regulations? (d) Did he resign in circumstances in which a substantial changes made to his working conditions to his detriment. [sic][16]The Employment Tribunal decision(1) The Employment Tribunal decided, reasons paragraph 30, that no argument was advanced in relation to the unlawful deductions and holiday pay claims and so they were dismissed.(2) They found that there was no dismissal of the Appellant. The letters of 17 and 24 April did not amount to termination of his employment by the Transferor, or, if they did, any notice of termination given was withdrawn with the Appellant's consent in the form of his acquiescence and agreement to the extension of the consultation period, initially for the first week in May and then, as Mr Malloy had confirmed in writing, to the end of May 2001.(3) In the absence of a dismissal the claims for both unfair dismissal and wrongful dismissal failed and were also dismissed. The Appeal[17]We can divide the appeal into what we shall call the major issue and the minor issue. The major issue[18]Here the question is whether the Employment Tribunal was wrong in law to find that thee was no dismissal so as to found the Appellant's complaint of unfair dismissal and wrongful dismissal.[19]Mr Sethi takes a number of points on this part of the case. However, having heard him on 2 particular arguments we then looked to Mr Henson and Mr Perkins for their response. Having done so we have concluded that Mr Sethi is correct in submitting:(1) that the Transferor's letter of 24 April, read with the earlier letter of 17 April, was a notice of dismissal to take effect on 30 April. It was a dismissal within the meaning of S95(1)(a) of the Employment Rights Act 1996. Mr Henson accepts that analysis: Mr Perkins advanced no cogent argument to the contrary.(2) that, in the absence of any economic, technical or organisational reason for dismissal being advanced by either Respondents below, the dismissal was connected with the transfer and consequently the Appellant was employed in the part of the undertaking transferred immediately before the transfer for the purposes of regulation 5(3) TUPE. See Lister v Forth Dry Dock and Engineering Co Ltd [1989] IRLR 161 .(3) the dismissal was automatically unfair under regulation 8(1). The dismissal was not rendered a nullity by the operation of TUPE; rather the liabilities arising from the unfair dismissal passed to the Transferee. Wilson v St Helens Borough Council [1998] IRLR 706 per Lord Slynn of Hadley, paragraphs 44, 49, 71 and 73.(4) insofar as the Appellant did not receive his contractual notice or pay in lieu of notice the dismissal was unlawful at common law.(5) the offer of alternative employment by the Transferee before the transfer date did not avoid the effect of TUPE, it not having been accepted by the Appellant. He was entitled to continue his employment with the Transferee after the transfer date on the same terms and conditions as before but, as Mr Perkins put, it that job was no longer available.(6) the Appellant did not object to his being transferred to the employment of the Tranferee within the meaning of regulation 5(4)(a) as Mr Perkins contends; first, because the Employment Tribunal found as a fact (reasons paragraph 15(xl) that the Appellant at no time advised the Transferee that he did not wish to take up employment with them; secondly, because the objection here was not to the identity of the new employer, but to the new Terms and Conditions of employment proposed to him. We do not understand the European Court of Justice decision in Katsikas v Konstantinidis [1993] IRLR 179, on which Mr Perkins relies, to deal other than with the case of objection to the identity of the new employer where the old Terms and Conditions of employment would otherwise continue.[20]It follows, in our judgment that the Employment Tribunal failed to apply the law, to be found in TUPE, correctly to the facts as found. The minor issue[21]This relates to the Employment Tribunal's finding at paragraph 30 of their reasons that no argument was advanced in relation to the unlawful deductions and holiday pay claims raised in the Originating Application and the schedule thereto. We have considered the Court of Appeal decision in Mensah v East Hertfordshire NHS Trust [1998] IRLR 531 , but we are satisfied that in the present case unlike that of Mrs Mensah, evidence was led in support of those claims. It can be found at paragraphs 73 - 75 of the Appellant's witness statement, which stood as his evidence in chief below and in answers to questions before the Employment Tribunal as appears in 2 places in the Chairman's notes of evidence by reference to Mr Bunn's calculation of the Appellant's leaving entitlement in his memorandum of 24 April 2001. The total outstanding claim has been calculated at £788.29. In these circumstances we can appreciate why Counsel then appearing for the Appellant, not Mr Sethi, made no submissions on this minor part of the case when invited to do so by the Chairman, as Mr Perkins told us occurred. That did not in our view amount to an abandonment of that part of the claim. In our view the claim remained live and the Employment Tribunal was wrong to treat it as no longer up for adjudication. Conclusion[22]It follows in our judgment that this appeal must be allowed. We shall substitute a finding that the Appellant was dismissed by the 1st Respondent; that that dismissal was automatically unfair under regulation 8(1) TUPE; that he was also dismissed for the purposes of the wrongful dismissal claim; that liability for all losses properly recoverable by the Appellant including the miscellaneous claims totalling £788.29 if established, pass to the Transferee and that the case will be remitted to a freshly constituted Employment Tribunal for assessment of compensation due to the Appellant from the Transferee. The Transferor is dismissed from the action.