MR A N HOWARD v (1) MILLRISE LIMITED T/A COLOURFLOW (IN LIQUIDATION) (2) S G PRINTERS T/A COLOURFLOW [2004] UKEAT 0658_04_0911

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2004] UKEAT 0658_04_0911Case No Appeal No. UKEAT/0658/04Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MR A N HOWARDAPPELLANT(1) MILLRISE LIMITED T/A COLOURFLOW (IN LIQUIDATION) (2) S G PRINTERS T/A COLOURFLOWRESPONDENTS
Before
Mr Justice BeanSir Alistair Graham Kbe Ms P TatlowDate 9 November 2004
[1]APPEARANCES For the Appellant MR JAMES HOLMES-MILNER (of Counsel) Instructed by: Messrs Lyonds Davidson Solicitors Bridge House 48-52 Baldwin Street Bristol BS1 1QD For the Respondents No Appearance or Representation By or on Behalf of the Respondents SUMMARY Transfer of Undertakings Issue was whether there is a duty on the employer, where a TUPE transfer is in prospect, no Trade Union is recognized and there are no employee representatives in post, to initiate an election for representatives (and then inform and consult them) or, failing that, to inform and consult individuals. We hold that there is. The point does not appear to have been decided in any reported case so far. THE HONOURABLE MR JUSTICE BEAN The Appellant, Mr Howard, was employed by Millrise Ltd as a lithographic printer at the company's premises in New Malden from 15 March 2002. On 15 April 2003 he was given one month's written notice of dismissal on the grounds of redundancy. He was told he would receive all outstanding payments due to him at the end of the month.[2]On 30 April 2003 Millrise went into liquidation and its undertaking was transferred as a going concern to the Second Respondents, S G Printers, who traded under the name Colourflow. Millrise and S G Printers had been in negotiation to transfer the business during April. Mr Howard served out his one month's notice and the effective date of termination was 14 May 2003.[3]He lodged an Originating Application with the Employment Tribunal on 25 June, at that stage naming Millrise Ltd alone as Respondents but, following a written application by the Applicant, the Tribunal on 26 August 2003 ordered that S G Printers be joined to the proceedings as second Respondent.[4]By the time the matter came before the Employment Tribunal for hearing the Applicant's claims, as amended, were that he had been unfairly dismissed, that there were wages outstanding and unpaid at the time of his dismissal which constituted an unlawful deduction from wages, and also that there had been a failure to consult him prior to his being made redundant. There had been a total of seven relevant employees of Millrise Ltd of whom the Applicant and one other lost their jobs.[5]The Tribunal hearing took place on 8 January 2004 at the London South Employment Tribunal, Ms Taylor being the Chairman. The Applicant was represented by Counsel but neither Respondent appeared and neither Respondent was represented. That indeed has been the position before us today, where Mr Holmes-Milner of Counsel has represented Mr Howard, but again the Respondent Employers have been neither present nor represented. Indeed by Order of the Registrar they were debarred from taking part in the appeal, even had they wished to do so, because of their failure to lodge an Answer.[6]The Employment Tribunal upheld the Applicant's contention that there had been unauthorized deductions from his wages in the sum of £1,776.28. They also found that he had been unfairly dismissed, the dismissal being automatically unfair under Regulation 8 of the Transfer of Undertakings (Protection of Employment) Regulations 1981 , which we shall refer to in this judgment as TUPE . The total awards made by the Tribunal were basic award of unfair dismissal - £390, loss of statutory rights - £250, compensatory award after deduction of earnings - £2,665.23, total award - £4,831.51 (taking all heads together).[7]But in one respect they rejected the Applicant's claim, namely failure to consult. The part of the Tribunal's Reasons dealing with this consists of a single paragraph, 20, as follows: 20. Although invited to do so, the Applicant did not expand upon why he believed he was entitled to an award under the collective information and consultation provisions of TUPE. These provisions appear to apply only to appropriate representatives, as defined by the regulations. Therefore, the Tribunal was not satisfied that the Applicant (who did not allege that he was 'an appropriate representative') was entitled to the benefit of an award of compensation under regulation 10.[8]Regulation 10 (as amended) is indeed "Duty to inform and consult representatives". Regulation 10(2) provides as follows " (2) Long enough before a relevant transfer to enable the employer of any affected employees to consult all the persons who are appropriate representatives of any of those affected employees, the employer shall inform those representatives of [various matters relating to the possible transfer]." Regulation 10(2A) provides:
" (2A) For the purposes of this Regulation the appropriate representatives of any employees are- (a) if the employees are of a description in respect of which an independent trade union is recognized by their employer, representatives of the trade union, or (b) in any other case, whichever of the following employee representatives the employer chooses- (i) employee representatives appointed or elected by the affected employees otherwise than for the purposes of this Regulation, who (having regard to the purposes for and the method by which they were appointed or elected) have authority from those employees to receive information and to be consulted about [the transfer] on their behalf; (ii) employee representatives elected by them, for the purposes of this Regulation, in an election satisfying the requirements: of Regulation l0A(l)"
Regulation 10(7) provides a defence of reasonable practicability for a complaint of failure to carry out the duties imposed by, among other provisions, Regulation 10(2). Regulation 10(8) provides:
" (8) Where– (a) the employer has invited any of the affected employees to elect employee representatives, and (b) the invitation was issued long enough before the time when the employer is required to give information under paragraph (2) above to allow them to elect representatives by that time, the employer shall be treated as complying with the requirements of this Regulation in relation to those employees if he complies with those requirements as soon as is reasonably practicable after the election of the representatives. (8A) If, after the employer has invited affected employees to elect representatives, they fail to do so within a reasonable time, he shall give to each affected employee the information set out in paragraph (2)."
[9]Regulation 10A makes detailed provision for the election of employee representatives. It begins "The requirements for the election of employee representatives under Regulation l0(2A) are…" and goes on to specify in no less than nine subparagraphs matters such as ensuring the fairness of the election; ensuring, so far as reasonably practicable, that voting is in secret; that the count is accurate; that no eligible employee is unreasonably excluded; and so forth. The details of the subparagraphs are not relevant for present purposes.[10]Regulation 11(1) provides as follows:
" 11(1) Where an employer has failed to comply with a requirement of Regulation10 or Regulation l0A, a complaint may be presented to an employment tribunal on that ground- (a) in the case of a failure relating to the election of employee representatives, by any of his employees who are affected employees; (b) in the case of any other failure relating to employee representatives, by any of the employee representatives to whom the failure related, (c) in the case of failure relating to representatives of a trade union, by the trade union, and (d) in any other case, by any of his employees who are affected employees."
Regulation 11(2) provides a defence of reasonable practicability, the onus being on the employer, to a complaint under Regulation 11(1). Regulation 11(4) provides:
" (4) Where the tribunal finds a complaint under paragraph (1) above well-founded it shall make a declaration to that effect and may- (a) order the employer to pay appropriate compensation to such descriptions of affected employees as may be specified in the award…" [subparagraph (b) is irrelevant for present purposes] Finally, Regulation 11(11) defines "appropriate compensation" as "such sum not exceeding 13 weeks' pay for the employee in question as the tribunal considers just and equitable having regard to the seriousness of the failure of the employer to comply with his duty."
[11]A similar provision relating to protective awards for failure to comply with the obligation to consult in advance of redundancies was considered by the Court of Appeal in Susie Radin Ltd v GMB [2004] ICR 893 but it does not throw light on the question we have to consider in the present case.[12]Mr Holmes-Milner puts his case as follows. He says that under Regulation 10(2) there is (and there plainly is) a duty to inform representatives of affected employees of certain matters in order to enable meaningful consultation to take place. "Appropriate representatives" are defined by Regulation 10(2A) but, Mr Holmes-Milner argues, 10(2A) constitutes not only a definition but a duty. If there is a trade union recognized by the employer and the affected employees are of a description in respect of which the independent trade union is recognized, there is no difficulty: the appropriate representatives are representatives of the trade union.[13]But where, as here, there are no such representatives of a recognized trade union the argument moves on to Regulation 10(2A)(b).

(b) (ii))

[14]The next stage of Mr Holmes-Milner's argument is that under Regulation 10(8) the employer is, by implication, obliged to invite employees to elect representatives since otherwise Regulation 10(8A) would be futile. That Regulation plainly on its face requires the employer, if he has invited affected employees to elect representatives and they fail to do so within a reasonable time, to give to each individual affected employee the information required by Regulation 10(2). That provision would be rendered pointless if the employer were not obliged to set the ball rolling by inviting affected employees (assuming there were no recognized trade union representatives or other elected or appointed representatives already in place) to elect representatives for the purposes of TUPE .[15]We accept Mr Holmes-Milner's argument in relation to Regulation 10(8A). Once one has got past this stage in the argument the remaining steps are relatively straightforward: the election, when it takes place, must comply with Regulation 10A; and if there has been a failure to comply with a requirement of Regulation 10 or Regulation 10A, a complaint may be presented under Regulation 11(1), subject to the defence of reasonable practicability which is available to an employer but which the employers in the present case did not advance before the Tribunal.[16]It is unnecessary for present purposes to decide whether what occurred in the present case can be analysed as a series of failures to comply with individual provisions of the Regulations or a single course of conduct embracing one or more failures. It is likewise unnecessary to decide whether the complaint in this case properly lies under Regulation 11(1)(a), 11(1)(b) or 11(1)(d). Whichever it is the failure to take any steps to invite the election of representatives, the failure to give information to such representatives or, in default of election, to give information to Mr Howard himself, or all of these things, there was in our judgment a failure to comply with the Regulations and the Decision of the Tribunal, under paragraph 20 of its Reasons, to reject the complaint of failure to inform and consult must be set aside.[17]Mr Holmes-Milner accepts that we do not have sufficient information before us to make an award of compensation ourselves. We therefore allow the appeal, declare that that the Applicant's complaint under Regulation 11(1) was well-founded and remit the case to the Employment Tribunal to determine what is appropriate compensation to be paid to Mr Howard.[18]We would add this by way of footnote. We regret that we have had no argument presented on behalf of the employers to us and that the Tribunal below were labouring under the same difficulty. Mr Holmes-Milner has been extremely helpful in taking us carefully through the Regulations to assist us in deciding this point which, so far as his research or our own knowledge have revealed, has not previously been the subject of any reported Decision.