MR C SMALL & OTHERS v 1) THE BOOTS CO PLC 2) BOOTS UK LTD [2009] UKEAT 0248_08_2301

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2009] UKEAT 0248_08_2301Case No Appeal No. UKEAT/0248/08Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MR C SMALL & OTHERSAPPELLANT1) THE BOOTS CO PLC 2) BOOTS UK LTDRESPONDENT
Before
Mrs Justice SladeDate 23 January 2009
[1]APPEARANCES For the Appellant MR JEREMY LEWIS MS KATHERINE APPS (of Counsel) Instructed by: Messrs Actons, Solicitors 16 & 20 Regent Street Nottingham NG1 5BQ For the Respondent MR DANIEL BARNETT (of Counsel) Instructed by: Alliance Boots (Group Legal Services) 1 Thane Road West Nottingham NG90 1BS SUMMARY CONTRACT OF EMPLOYMENT: Written particulars UNLAWFUL DEDUCTION FROM WAGES In determining claims under a discretionary bonus scheme the Employment Judge erred in failing to decide whether the scheme had any contractual content and, if so, what. ( Horkulak v Cantor Fitzgerald [2005] ICR 402 .) A claim for a bonus under a 'substantially equivalent' scheme on a TUPE transfer is for an unquantified amount and cannot be brought under the Employment Relations Act 1996 Section 23, unless Article 3(c) of the Employment Tribunals Extension of Jurisdiction (England and Wales) Order 1994 applies. THE HONOURABLE MRS JUSTICE SLADE This is an appeal by Mr Small and other warehousemen ('the claimants') employed by the Boots UK Ltd ('Boots') from the dismissal by an Employment Judge on 1 May 2008 of their claims for unlawful deduction from wages and from his rejection of their applications for declarations of entitlement to bonus payments. Unless otherwise indicated, references below to paragraph numbers are to paragraphs in the judgment of the Employment Judge.[2]The claimants had been in receipt of performance related bonuses until the warehouse operations in which they are employed were transferred from Boots to Unipart. Claimants employed in one warehouse transferred to Unipart in August 2003 and those employed in another transferred in April 2004. In April 2007 the warehouse undertakings were transferred back to Boots. Whilst employed by Unipart the claimants received no bonus for 2005, 2006 and 2007. Apart from 2005, warehousemen who continued to be employed by Boots received a performance related bonus.[3]The transfers to Unipart were governed by the Transfer of Undertakings (Protection of Employment) Regulations 1981 and the transfer back to Boots by the Transfer of Undertakings (Protection of Employment) Regulations 2006 . There is no material difference in the relevant parts of the two sets of the Regulations as they apply to the issues in this appeal and, except where otherwise indicated, I shall refer to them without distinction as 'TUPE'.[4]Jeremy Lewis and Katherine Apps on behalf of the claimants contended that the Employment Judge erred in holding that the claimants did not have a contractual entitlement to a performance related bonus when employed by Boots, on transfer to Unipart and on retransfer to Boots. It was said in respect of both transfers and the claimants' employment by Boots and Unipart that the Employment Judge erred in holding that their original contracts with Boots conferred no contractual entitlement to a bonus. Alternatively it was contended on behalf of the claimants that, in respect of their employment by Unipart and retransfer to Boots, the Employment Judge erred in holding that Unipart did not enter into a contractual commitment to pay them a performance related bonus. Daniel Barnett for Boots resisted the appeal and cross -appealed challenging the failure of the Employment Judge to decide whether he had jurisdiction to determine the claims in this case which are said to be for an unquantified sum and therefore beyond the reach of Part II of the Employment Rights Act 1996 ('ERA').[5]The issues on this appeal are: (i) Did the Employment Judge err in determining the question of whether the claimants' contracts with Boots conferred on them an entitlement to a performance related bonus by deciding that:
'The great weight of documentation prior to the first transfer of undertaking is couched in language of discretion rather than obligation.'(para 22) (ii) Did the employment Judge err by failing to consider whether Boots'
'course of dealing over an extended period' was relevant to whether the provision relating to performance related bonus in the Statement of Particulars of Employment, was intended to have some contractual content; (iii) Did the Employment Judge fail to give adequate reasons for or come to a perverse conclusion in holding that the assurances in respect of bonus payments by Unipart to the claimants in consultations regarding the August 2003 and the April 2004 transfers were 'warm words' and not a contractual commitment to make such payments to the claimants. (para 32). (iv) Did the Employment Judge err in holding that the claimants had no entitlement to a bonus under the Boots scheme for 2006/7. (para 42). The cross-appeal raises the following issue: (v) Did the Employment Judge err in failing to decide whether he had jurisdiction to determine the claim for deduction from wages. Relevant legislation[6]The Employment Rights Act 1996 ('ERA') Section 1 provides:
"(1) Where an employee begins employment with an employer, the employer shall give to the employee a written statement of particulars of employment. (4) The statement shall also contain particulars, as at a specified date not more than seven days before the statement (or the instalment containing them) is given, of- (a) the scale or rate of remuneration, or the method of calculating remuneration"
Section 11(1) provides:
"Where an employer does not give an employee a statement as required by section 1, 4 or 8 (either because he gives him no statement or because the statement he gives does not comply with what is required), the employee may require a reference to be made to an employment tribunal to determine what particulars ought to have been included or referred to in a statement so as to comply with the requirements of the section concerned."
Section 12(1) provides:
"Where, on a reference under section 11(1), an employment tribunal determines particulars as being those which ought to have been included or referred to in a statement given under section 1 or 4, the employer shall be deemed to have given to the employee a statement in which those particulars were included, or referred to, as specified in the decision of the tribunal."
[7]As for a claim for deduction from wages, ERA Section 27(1) provides:
"(1) In this Part 'wages', in relation to a worker, means any sums payable to the worker in connection with his employment, including- (a) Any fee, bonus, commission, holiday pay or other emolument referable to his employment, whether payable under his contract or otherwise,"
Section 13(3) provides:
"Where the total amount of wages paid on any occasion by an employer to a worker employed by him is less than the total amount of the wages properly payable by him to the worker on that occasion (after deductions), the amount of the deficiency shall be treated for the purposes of this Part as a deduction made by the employer from the worker's wages on that occasion. "
By Section 23(1) a worker may present a complaint to an employment tribunal that his employer has made a deduction from his wages in contravention of Section 13. Tribunals do not have jurisdiction to determine claims for damages which do not arise or are not outstanding on the termination of the employee's employment. ( Employment Tribunals (Extension of Jurisdiction) Order 1994 Article 3(c)).[8]TUPE 2006 regulation 4 provides:
"4. Effect of relevant transfer on contracts of employment 1. Except where objection is made under paragraph (7), a relevant transfer shall not operate so as to terminate the contract of employment of any person employed by the transferor and assigned to the organised grouping of resources or employees that is subject to the relevant transfer, which would otherwise be terminated by the transfer, but any such contract shall have effect after the transfer as if originally made between the person so employed and the transferee. 2. Without prejudice to paragraph (1), but subject to paragraph (6), and regulations 8 and 15(9), on the completion of a relevant transfer- a) all the transferor's rights, powers, duties and liabilities under or in connection with any such contract shall be transferred by virtue of this regulation to the transferee;"
Was the Boots bonus scheme contractual?[9]In paragraph 21 the Employment

Judge held:

"My conclusion in relation to the contractual position prior to the first transfer of undertaking is that the documentation does not disclose a contractual obligation to operate a bonus scheme. The most telling of the documents comprises the Statement of Particulars of Employment."
He based his finding that the Boots bonus scheme had no contractual effect on his observation in paragraph 22 that:
"The great weight of documentation prior to the transfer of undertaking is couched in language of discretion rather than obligation."
[10]Mr Lewis contended that the Employment Judge erred in regarding the use by Boots of the word 'discretionary' in its documentation relating to the bonus scheme as determinative of the question of whether the claimants had a contractual entitlement to a bonus. He contended that in accordance with the judgment of the House of Lords in Investors Compensation Scheme Ltd v West Bromwich Building Society [1988] 1 WLR 896 the term 'discretionary' should be construed in context and that this is so whether or not its meaning is ambiguous.[11]Mr Barnett very properly and realistically accepted that the word 'discretionary' used by Boots in its documentation to describe its performance related bonus scheme was ambiguous. Discussion[12]The Employment Judge relied upon the documentation referred to in paragraphs 12 to 19 of his judgment in reaching his conclusion that the claimants had no contractual entitlement to a bonus.[13]The Employment

Judge made the following findings in relation to the relevant documentation:

"12. Prefaced by the caveat that further details of '…these and other terms and conditions' could be found in the Staff Handbook, the Particulars of employment for use from February 1994 state that 'After a qualifying period of service, there are additional discretionary benefits, such as bonuses… However, they are not intended to be contractual.' The particulars countersigned by the employee under a rubric which reads ' Please sign below to acknowledge and accept the terms described in the above particulars of employment.' 13. The 1998 Staff Handbook states that 'everything included in it is important. Along with your Statement of Particulars Employment, it forms part of your contract.' However, the Introduction appears to distinguish between sections which are contractual and other sections which, inferentially, appear not to be [Italics removed]. Hence, it states that 'Section 3 gives information about the benefits of working for the Company', whilst asserting that 'Section 4 is of particular importance as it includes contractual terms and conditions of employment.' 14. Curiously, an employee's pension entitlement is contained within Section 3 and not within Section 4. Bonus arrangements, with which I am concerned, also appear within Section 3, and are described in very general terms, including the statement that they are discretionary. 15. A document issued in 2003 entitled 'Boots and Me' also refers both to pension and bonus arrangements available to employees of Boots. It is a document which is also broken down into sections. Pension and bonuses form part of Section 2. In relation to which the booklet states 'The company reserves the right at its absolute discretion to withdraw or modify any part of section 1 or 2.' Section [3] is said to relate to terms and conditions of employment and was not said to be discretionary nor capable of unilateral withdrawal by the company."
[14]In Horkulak v Cantor Fitzgerald [2005] ICR 402 the Court of Appeal considered an employer's appeal against an award of damages in respect of a discretionary bonus. Amongst other grounds of appeal, the employers contended that the trial judge should have applied the principle in Laverack v Woods of Colchester Ltd [1967] 1QB 278 , awarding no damages in respect of unpaid discretionary bonus. Mr Horkulak's contract made provision for payment of a discretionary bonus as follows:
"In addition [CFI] may in its discretion, pay you an annual discretionary bonus which will be paid within 90 days of the financial year-end (30 September) the amount of which shall be mutually agreed by yourself., the chief executive of the company and the president of Cantor Fitzgerald Ltd Partnership, however the final decision shall be in the sole discretion of the president of Cantor Fitzgerald Ltd Partnership… It is a condition precedent to any payment hereunder that you shall at all relevant times exercise best endeavours to maximise the commission revenue of the global interest rate derivatives business and that you shall still be working for and not have given notice to or attempted to procure your release from this agreement nor have given notice to or attempted to procure your release from this agreement nor have given notice to the company in accordance with clause 11(h) on the date such bonus is due to be paid."
[15]Potter LJ accepted that the contractual discretion in the clause was drafted in wider terms than those employed in earlier cases and attached a discretion to the obligation to pay a bonus at all rather than to the assessment of the amount payable as in Clark v BET plc [1997] IRLR 348. It laid down no specific criterion of 'individual performance as in Clark v Nomur a [2000] IRLR 766 and no prima facie formula for calculation as in Mallone v BPB Industries Ltd [2002] IRLR 766. He took into account relevant circumstances in determining whether the wide discretion whether to make a payment of a bonus at all had some contractual content. At paragraph 46 he observed:
"None the less, the clause is one contained in a contract of employment in a high-earning and competitive activity in which the payment of discretionary bonuses is part of the remuneration structure of employers. In this case, the objective purpose of the bonus clause on the evidence (supported by the evidence of Mr Amaitis in para 8 of his third (confidential) witness statement) was plainly to motivate and reward the employee in respect of his endeavours to 'maximise the commission revenue of the global interest rate derivatives business' of CFI. Further, the condition precedent that the employee should still be working for CFI and should not have given notice or attempted to procure his release, demonstrates that the bonus was to be paid in anticipation of future loyalty. In such a case, as it seems to me, the provision is necessarily to be read as intended to have some contractual content, i.e. it is to be read as a contractual benefit to the employee, as opposed to being a mere declaration of the employer's right to pay a bonus if he wishes, a right which he enjoys regardless of contract."
Having regard to the circumstances, Potter LJ held that Mr Horkulak had contractual rights in relation to the exercise of the discretion. He distinguished such an entitlement from a mere declaration of the employer's right to pay a bonus if it wishes, a right which any employer enjoys regardless of contract[16]The observation in Horkulak regarding the employer's right to pay a bonus if he wishes as a right which he enjoys regardless of contract is an observation which could be made about the Employment Judge's references in paragraphs 24, 25 and 27 to Boots' power to make such payment which he considered would transfer to Unipart.[17]Mr Barnett was correct in stating that the use of the word 'discretionary' in the documentation in this case is ambiguous.[18]In my judgment, the extent of an employer's discretion in relation to a bonus scheme is relevant to the determination of the question of whether and, if so, to what extent the scheme has contractual content. The Employment Judge erred in failing to determine the meaning of the term 'discretionary' in the documentation on which he relied.[19]As is illustrated by the observations of Potter LJ in Horkulak , the use of the term discretionary in a bonus scheme may be attached to the decision whether to pay a bonus at all, its calculation or its amount. No doubt there are other factors to which discretion may be attached. In determining whether the reference to a discretionary bonus conferred any contractual entitlement, the Employment Judge should have decided to what aspect of the scheme the term discretionary was attached. In the context of this case, the possible interpretations include discretion attached to the provision of an overarching bonus scheme, to a decision each year to operate a bonus scheme, to the method of calculation of bonus or to the threshold which triggers a bonus or to whether and if so what percentage of salary will be paid.[20]In contrasting discretion with obligation in paragraph 22 of his judgment, the first conferring no contractual entitlements and the second conferring such rights, the Employment Judge did not engage with the question of whether Boots' discretion in relation to the performance related bonus had any contractual content and, if so what. In my judgment the Employment Judge erred in law by determining the question of whether the claimants had any contractual entitlement to a bonus by regarding the use by Boots of the word 'discretionary' in relation to the bonus scheme as determinative. Relevance of practice in making bonus payments[21]The Employment

Judge held at paragraph 23:

" …… I do not think that Boots' course of dealing with its fluctuating workforce over an extended period of time has turned this scheme into a contractual scheme."
The Judge must have had in mind his observation in paragraph 16 that the claimants said that a bonus had been paid for some forty years. This does not appear to have been disputed by Boots[22]Mr Lewis contended that the Employment Judge erred in failing to take into account the long standing practice of paying bonuses in deciding whether the claimants' contracts of employment gave them an entitlement to such payments. In reliance on Albion Automotive v Walker [2002] Civ 946, Mr Lewis contended that the Employment Judge erred in not looking in the round at the question of whether the discretionary bonus scheme had some contractual content.[23]In this regard Mr Lewis contended that the documents referred to by the Employment Judge should be construed in the light of the payment of a performance related bonus every year since 1967 save for two occasions when performance targets were not met. Mr Lewis accepted that in principle a history indicating contractual entitlement can be superseded but submitted that in this case this did not happen. There was no agreement to remove the entitlement to a bonus.[24]In addition to the long standing practice of Boots paying performance related bonuses to its warehouse staff, Mr Lewis relied on the absence of communication to staff at the beginning of the year that a bonus would be paid that year. Boots accepted that the expectation was that there would be a bonus scheme in place each year and that if there was not to be a scheme in place as a matter of practice it would brief employees to that effect. He also drew attention to the reference by Boots to a performance bonus in advertisements for warehouse staff.[25]Mr Barnett distinguished Albion on the basis that it is a case dealing with a different point, namely whether a 'policy' has contractual status in circumstances where the answer cannot be found by looking at the contractual documentation. He contended that the factors relied upon by the claimants were in the Employment Judge's mind when he considered whether scheme which he had decided on the basis of the documentation was non-contractual had become contractual. He rightly recognised that if it is held that the Employment Judge erred in adopting this two stage approach then the appeal will succeed.[26]Mr Lewis agreed that in accordance with Reda v Fla g [2002] IRLR 747 relied upon by Mr Barnett, custom and practice cannot override an express term. However, custom and practice can regulate the way in which a term is construed and is to be exercised. He made reference in this regard to paragraph 49 of the judgment of the Court of Appeal in Horkulak v Cantor Fitzgerald International [2005] ICR 402 , in which Reda was distinguished. Discussion[27]Whilst agreeing with Mr Barnett that Albion , in which there was no contractual documentation, is to be distinguished from this case, in my judgment the Employment Judge erred in treating Boots' course of dealing as relevant only to whether a bonus scheme which he had held to be discretionary had been varied to acquire contractual effect.[28]I have already held that the Employment Judge erred in treating the use of the term 'discretionary' in the documentation as determinative against the bonus scheme having contractual effect. Further, in my judgment, the Employment Judge erred in failing to take into account all relevant circumstances including the invariable practice of making payments over many years in deciding whether the discretion in the documentation is to be construed as having contractual content.[29]The ground of appeal which challenges the approach of the Employment Judge in this regard succeeds. Fetters on discretion[30]Mr Lewis contended that, properly construed, there were fetters on the way in which the discretion referred to by Boots in the documentation could be exercised. These fetters applied to Boots and, after transfer, to Unipart.[31]Mr Barnett contended that a fetter on discretion with regard to payment of a bonus is a new argument which was not raised on behalf of the claimants before the Employment Judge and should not be permitted to be raised on appeal. He said that the Employment Judge raised the possibility of such a fetter with him during closing submissions but the Judge did not raise the point with Miss Apps. He recognised that the judgment of the Employment Judge does not deal with this point at all. However I am satisfied that the contractual obligation on an employer to exercise a discretion rationally and in good faith was raised by the claimants before the Employment Judge as can be seen from paragraph 42 of their skeleton argument for the hearing before him.[32]Mr Barnett accepted that if obliged to exercise a discretion in respect of the payment of a bonus, the implied duty of trust and confidence would require Boots and Unipart to exercise the discretion rationally. If the Employment Judge erred in failing to consider whether there was a fetter on Boots' discretion to pay a bonus, that question would have to be remitted to the Employment Judge for determination. Discussion[33]It is clear that from well established authority that if Boots and Unipart were obliged to exercise a discretion in relation to the provision of a bonus, that discretion must be exercised rationally and in good faith. ( Horkulak para 46, see also at para 40 citing from the judgment of Burton J in Clark v Nomura International Plc [2000] IRLR 766).[34]The question of reasonable exercise of discretion will be for the Employment Judge who determines whether the discretion in relation to the bonus had some contractual content. The nature of the bonus scheme after the TUPE transfer to Unipart[35]The claimants contended that on a transfer of the warehousing undertakings to Unipart, the Boots bonus scheme would continue to apply and they were entitled to bonuses calculated according to the scheme applied in the year in question. Their default position was that if the Boots scheme were impossible to apply to their employment with Unipart and that to attempt to do so would give rise to absurdity and injustice, then, applying MITIE Management Services Ltd v French [2002] ICR 1395 , they were entitled to a substantially equivalent scheme.[36]However this argument is one for determination by the Employment Judge to whom the case will be remitted. Commitments by Unipart to pay a bonus[37]The Employment Judge made the following findings regarding consultations and information given to employees about payment of a bonus by Unipart:
"29. There was a series of consultation meetings at which the implications of the forthcoming transfer were discussed. The bonus scheme was one of those topics about which information and consultation was undertaken. It is probably fair to summarise the position as follows. The issue was registered, and a series of non-committal statements were issued which, no doubt, may have allayed some anxieties. 30. The evidence in relation to the second transfer is slightly different. The second transfer from Boots to Unipart took place on 1 st August 2004. In February 2004, employees were informed, by means of a Transfer Update document that Unipart was 'committed to providing a scheme for staff'. By mid-March, the update included a confirmation that there would be a scheme that would apply to employees operating on the Unipart contract. The update also stated that the detail of the scheme was being developed. 31. However, it would seem that the position did not crystallise: a letter dated 13 th July 2004 from Boots to its out-going employees made this point, and stated that Unipart would consult with the employees on any ongoing bonus scheme."
At paragraph 32 the Employment

Judge held:

"Despite what might be described as warm words from Unipart in the course of each of the transfers, there was no commitment given. What does not appear from the contemporaneous documents is a clear acceptance by Unipart that it was inheriting an obligation. More significantly, it is worth stressing that, if the bonus were to have been in the nature of a contractual right, there would have been no need for the union to seek any assurance. If it had been contractual in its nature as part of the Boots employment package, the bonus would have been a non-issue, save perhaps as to the issue of substantial equivalence."
In paragraph 33 he observed:
"I do not think that Unipart made a promise to run a scheme so as to turn the beneficence of Boots into a Unipart obligation."
[38]Mr Lewis contended that the finding that Unipart did not enter into a contractual commitment, independent of any transferred obligation, to make bonus payments to the transferred employees was perverse in the light of its findings of fact in paragraphs 30 to 32.[39]Further, Mr Lewis pointed out that the Employment Judge incorrectly referred to the second transfer as having taken place in August 2004 when it took place in April of that year. Further the Tribunal Judge referred to a letter dated 13 July 2004 from Boots to its out-going employees in which it stated that Unipart would consult with the employees on any ongoing bonus scheme. Mr Lewis said that there was no such letter before the Employment Judge nor would there have been as 13 t July was some three months after the April 2004 transfer.[40]On behalf of the claimants it was also contended that their representatives accepted in the consultation process that all matters regarding the transfer had been resolved. It was said that this amounted to an acceptance of an offer by Unipart and consideration for a contract regarding bonus.[41]Mr Barnett contended that the statements made by Unipart have to be viewed in their context of a TUPE transfer. These were statements to inform the employees of the measures which the transferee envisages he will take in relation to the transferring employees under TUPE Regulation 10(2). There is also an obligation to consult with the appropriate representatives with a view to seeking their agreement to measures to be taken under TUPE Regulation 10(5). Thus any statements made by Unipart amounted to no more than what it envisaged would happen in relation to bonuses on the transfer. Referring to the wording of the Transfer updates and the Employee Information Pack he said that the documentation in relation to the April 2003 and August 2004 transfers fell far short of a contractual promise.[42]Mr Barnett also contended that there was no offer from Unipart which was sufficiently precise to be accepted, it was not accepted and there was no consideration for an agreement in respect of bonus. Discussion[43]The evidence relied upon by the claimants in support of their contention that Unipart entered into an independent contractual commitment to pay a bonus was information given in connection with the transfer. In my judgment the acceptance by employee representatives that all matters regarding the transfer had been resolved could not be said to be an acceptance of an offer by Unipart and consideration for a contract regarding bonus as is contended on behalf of the claimants.[44]Mr Barnett was correct in his submission that statements to employees and their representatives about bonus must be considered in their context. The statements were made in the course of information and consultation required and given in connection with the TUPE transfer from Boots to Unipart. Although it is unfortunate that the Employment Judge appears to have made a slip as to the date of the second transfer and mistaken reference to a July letter, in my judgment he did not reach a perverse conclusion on the facts found by him that Unipart had not entered into a contractual commitment to pay a bonus irrespective of any obligations they had under TUPE.[45]The appeal against the finding of the Employment Judge that irrespective of any obligation it may have been under to honour existing entitlements under TUPE, Unipart did not enter into a contractual commitment that it would operate a bonus scheme for the claimants, is dismissed. The 2007 bonus[46]The claimants became employed again by Boots on 1 April 2007 as a result of a TUPE transfer from Unipart. They claim a bonus under the Boots scheme in operation for 2006/7. The Employment

Judge held at paragraph 42:

"[The scheme] had been announced in 2006, and ran through to 31 st March 2007. However, in order to be eligible for receipt of a bonus under this scheme, it was necessary to have joined Boots prior to 1 st January 2007. None of the claimants was eligible because the transfer only took place on 1 st April 2007."
[47]Mr Lewis contended that the Employment Judge erred in failing to have regard to the fact that by virtue of TUPE Regulation 4(1) the claimants are deemed to have been employed by Boots prior to 1 January 2007, therefore qualify for a bonus. He relied on paragraph 26 of the judgment of the Employment Appeal Tribunal in Perry's Motor Sales Ltd v Lindle y EAT/0616/07.[48]Mr Barnett contended that the claimants have no entitlement to bonus in 2007 as they were not employed for any part of the bonus year 2006/7. Further, the judgment of the Court of Appeal in Jackson v Computershare Investor Services [2008] IRLR 70 is indistinguishable. In that case Mummery LJ held at paragraph 31 that:
"… the true effect of the deeming provision in reg. 4(1), on which the ET relied, is not to give a transferred employee access to employment benefits other than those to which the employee was entitled before the transfer of the undertaking."
At paragraph 33 he held:
" …. I totally reject the attempt to make artificial use of TUPE in a contextual fashion for the purpose of interpreting CIS's contract for enhanced severance pay terms in a way which displaces [the] ET's undoubtedly correct finding of fact that Mrs Jackson joined CIS after 1 March 2002 and miraculously transforms her from being a post 2002 new entrant into a pre-2002 joiner."
Discussion[49]Mummery LJ in Jackson pointed out that TUPE enables the length of the employee's service with the transferor to be used in determining certain rights including the length of qualifying service. This and the fact that acts of the transferor are after transfer deemed to be those of the transferee were the basis for the judgment in Perry's Motor Sales Ltd relied upon by the claimants. In my judgment Jackson is indistinguishable from the claimants' case. Their claim in respect of the 2006/7 bonus is predicated on their failure to establish an entitlement to inclusion in that scheme by virtue of the transfer of contractual obligations from Boots to Unipart. They claim the bonus by virtue of joining Boots on 1 April 2007. In making their claim they are not seeking to preserve rights they had with Unipart which they claim to retain on the TUPE transfer to Boots. They had no such rights when they were employed by Unipart. They are seeking to use the provisions of TUPE which are designed to preserve rights not to create them. Until the TUPE transfer on 1 April 2007 even on their argument, the claimants could not assert such rights. By the date of the transfer the bonus year had come to an end.[50]The appeal against the dismissal of the claimants' claim for the Boots 2006/7 bonus independent of the transfer of any existing rights fails and is dismissed. The Cross-appeal Discussion[51]The cross-appeal only arises if the appeal succeeds.[52]Boots cross-appeal from the failure by the Employment Judge to resolve the issue as to whether an unascertained bonus would fall within or outside the definition of 'wages' for the purpose of a claim under ERA Section 23. Mr Barnett contended that the claim in these cases is properly regarded as one for damages for breach of contract and as such must be brought in the ordinary courts. In this regard he relies on the judgment of the Court of Appeal in Coors Brewery v Adcock [2007] ICR 983 .[53]Mr Lewis accepted that if the claimants' claims are for bonus under a substantially equivalent scheme then they are for unquantified damages and an Employment Judge would not have jurisdiction to determine them by way of a deduction of wages claim. He contended however that a declaration could be made in relation to a substantial equivalence claim under Section 11 ERA.[54]Wall LJ in Coors referring to the judgment of Nicholls LJ in Delaney v Staples [1991] ICR 331, pointed out in paragraph 46 that in a claim for unlawful deduction from wages under ERA an Employment Tribunal can determine issues of fact raised by an employer's defence. However, the underlying premise on which the claim in respect of deduction from wages is brought is that the employee is owed a specific sum of money by way of wages which he asserts has not been paid to him. Wall LJ concluded at paragraph 53 that if the bonus scheme at issue in that case:
"… did not represent a fulfilment of Coors' obligation to create a replacement for the BEPSS, the result in jurisdictional terms is that the claimants' remedy would have suffered a loss, but the amount of that loss was unquantified."
[55]Since the claimant's employment had not terminated, the jurisdiction of an Employment Judge to determine the claims for deduction from wages depended upon whether they established that they were entitled to bonuses calculated in accordance with the Boots scheme applied in the years in issue. However, as is recognised by Mr Lewis, if the claimants were to establish an entitlement to a bonus under a substantially equivalent scheme, the amount of such entitlement would be unquantified and would not fall within the jurisdiction of the Employment Judge under ERA Section 23. Conclusions 1. The Employment Judge erred in failing to determine whether the Boots discretionary bonus scheme had any contractual effect and if so what. 2. The Employment Judge did not err in dismissing the claim that the claimants had an entitlement to a bonus pursuant to a contract with Unipart. 3. The Employment Judge did not err in dismissing the claimants' claim to a bonus in respect of the year 2006/7 by virtue of their contracts of employment transferring to Boots on 1 April 2007 by operation of TUPE. 4. The Employment Judge would not have jurisdiction to determine the claimants' claims for deduction from wages if the basis for such claims was for an unascertainable sum as would be a bonus under a scheme of substantial equivalence to the Boots scheme.[56]On the basis of these conclusions, the appeal against the dismissal of the claimants' claims for unlawful deduction from wages succeeds. The claims brought under the Employment Relations Act 1996 Section 11 and under Section 23 in respect of payment of bonus pursuant to the Boots scheme as operated after the TUPE transfers to Unipart and thereafter on retransfer to Boots are remitted for rehearing.[57]On the basis of these conclusions, the appeal against the dismissal of the claimants' claims for unlawful deduction from wages succeeds. The claims brought under the Employment Relations Act 1996 Section 11 and under Section 23 in respect of payment of bonus pursuant to the Boots scheme as operated after the TUPE transfers to Unipart and thereafter on retransfer to Boots are remitted for rehearing.[58]The parties made written and oral submissions on whether these matters should be remitted for rehearing to the same Employment Judge. Mr Barnett on behalf of Boots contended that the case be remitted to the same Employment Judge. Mr Lewis on behalf of the claimants submitted to the contrary. The issue of to whom the case was to be remitted was vigorously contested.[59]I have considered the guidance given by Burton J in Sinclair Roche & Temperly v Heard [2004] IRLR 763 , referred to with approval in Barke v SEETEC Business Technology Ltd [2005] IRLR ICR 1373, Sinclair Roche (No 2 ) UKEAT/0637/05 21 November 2005 and F & C Asset Management Ltd v Switalski UKEAT/0423/08 12 November 2008 on the issues to be taken into account in deciding whether to remit a matter to the same or a different Tribunal.[60]The hearing of evidence occupied the time of the Employment Judge for just over one day. The issues to remitted for hearing are fewer than those considered at the original hearing. Further, much of the evidence is likely to be agreed. It is most unlikely that the remitted hearing would take more than two days.[61]The remitted hearing is likely to take place more than a year after the original hearing and the Employment Judge is unlikely to have much recollection of the detail of the original hearing.[62]I have found significant errors of law in the judgment of the Employment Judge. Although he stated that he reached a conclusion adverse to the claimants with no great pleasure there may be a concern that he will be reluctant to 'eat his words' and come to a different conclusion on a remitted hearing.[63]The original part-time Employment Judge no longer sits. The parties relied respectively on observations in Sinclair Roche that the norm was to remit to the same Tribunal and on Sinclair Roche (No 2) that the norm was to remit to a different Tribunal. Although not relevant to the decision in this case, it would be useful to have statistics to establish which is the norm.[64]In exercising discretion as to whether this case should be remitted to the same or to a different Employment Judge I do not take into account the fact that the original Employment Judge no longer sits or the normal destination of remitted cases, whatever that might be. In my judgment there would be no or only marginal saving of hearing time if the matter were remitted to the original Employment Judge. This factor is outweighed by the desirability of avoiding any possibility of a bystander considering that the original Employment Judge would be reluctant to 'eat his words' in a remitted hearing and would therefore be inclined to reach the same conclusion. Accordingly this matter is to be remitted to a different Employment Judge for consideration in accordance with this judgment.[65]For the avoidance of doubt, issues 2 and 3 above on which the Employment Judge did not err in law, are not remitted for rehearing.