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Cite as: [1991] UKEAT 143_91_2811

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BAILII case number: [1991] UKEAT 143_91_2811

Appeal No. EAT/143/91

EMPOLYMENT APPEAL TRIBUNAL

4 ST. JAMES'S SQUARE, LONDON, SW1 4JU

At the Tribunal

On 28 November 1991

Judgment delivered 27 January 1992

Before

THE HONOURABLE MR JUSTICE WOOD MC

MR A FERRY MBE

MR J C RAMSAY

THE WORKERS' EDUCATIONAL ASSOCIATION APPELLANTS

(1) N SAUNDERS

(2) M POCOCK RESPONDENTS

Transcript of Proceedings

JUDGMENT

Revised

APPEARANCES

For the Appellants MR H PICARDA

(of Counsel)

Messrs Rooks Rider

Solicitors

Challoner House

19 Clerkenwell Close

London EC1R 0RR

For the Respondents MR J McMULLEN

(of Counsel)

Messrs Robin Thompson & Partners

Solicitors

Bainbridge House

Bainbridge Street

London WC1A 1HT

MR JUSTICE WOOD (PRESIDENT): This appeal has been dismissed. We now give our reasons for that Decision.

The Workers' Educational Association (hereinafter referred to as WEA) is a charity which is the Educational wing of the Labour movement. It came into existence at the beginning of this Century. The Tribunal found that it was not brought together by a gathering together of like-minded persons or institutions to form a free standing association.

Its work was spread downwards by devolvement ultimately through districts and branches.

Mr Pocock had been employed for many years as a WEA Tutor Organiser for a WEA Branch in Winchester and Southampton. He was born in 1943. Mr Saunders had only been employed since 1983; he was aged 38 and was employed as a WEA Tutor Organiser for West Sussex. Both the areas in which they worked fell within the Southern District of the WEA.

On the 29th October 1989 each of the applicants was given advance notice of redundancy; on the 23rd January 1990 they were both advised that their employments would end on 30th April 1990 and on that date the contracts of each were terminated.

By Originating Applications dated 27th July each of them claimed that they had been unfairly dismissed in that their selection for redundancy was unfair. Both cited the Respondents to the application as "Workers' Educational Association Southern District" and gave the address as "WEA Temple House, 9 Upper Berkeley Street, London, W1". This is the headquarters of the WEA, the national body. In each case a Notice of Appearance (IT3) was entered and the name of the Respondents was stated to be "Workers' Educational Association"; the name of the General Secretary was given, Mr Robert Lochrie, and the address as in the Originating Applications namely at Upper Berkeley Street. The redundancy was admitted and was explained in this way "the applicant was made redundant because the Southern District of WEA was being wound up and ceased trading on the 31st July 1990. All members of staff previously employed by the WEA Southern have now had their employment terminated by the District." It then continues "the WEA Thames Valley District which has taken on two of the field staff at Southern District after interview, is a wholly separate employer. There is no agreement or procedure for the transfer of staff between WEA Districts".

On the 6th December 1990 the matter came before an Industrial Tribunal sitting at Southampton under the learned Regional Chairman Mr Rich . It soon became apparent that the true identity of the employer was in issue. Mr Egan, a trade union representative and appearing on behalf of the Applicants, contended that it was WEA, whereas Mr Lochrie contended that it was Southern District. The Tribunal heard evidence. Later during the hearing the constitution of WEA was produced and it became clear that an adjournment was necessary.

The matter was adjourned until the 29th January 1991 on which date the Tribunal heard further arguments and some further evidence as shown in the Notes of Evidence produced by the learned Chairman.

The Decision reads thus:

"Both Applicants were employed by the Workers' Educational Association, and the name of the Respondent is amended accordingly."

The WEA Appeal. The summary of the reasoning of the Tribunal is to be found in paragraph 23 of its Decision which reads:

"Whilst, therefore, we find on the basis of the statement of terms of employment of employment that the Applicants were employed by the WEA Southern District, inevitably that is part and parcel of the Association. The Association was carrying on its affairs in this area under the trading title of Southern District, in the same way, perhaps, as British Gas plc carries on trade in this area as British Gas plc Southern. The correct Respondent is, therefore, the Association."

By the definition section of the Employment Protection (Consolidation) Act 1978, s.153 "employee", and "employer" are defined as follows -

"`employee' means an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment;

`employer', in relation to an employee, means the person by whom the employee is ... employed"

WEA contend that paragraph 23 of the Decision shows that the Contract of Employment was with Southern District and that therefore the Industrial Tribunal could not find that the employer was WEA. The contrary argument is that when one looks at the whole of the Decision, which is admirably set out over some 9 pages, it is quite clear that that paragraph must be understood to mean that the employer was WEA, the employment was in the Southern District and the Southern District was "part and parcel" of WEA. Hence the reference to British Gas.

Some of the earlier history is necessary for an understanding of the Decision. During 1987 problems arose in connection with Southern District. In July 1987 the National Officers in their capacity as trustees of WEA met officers from Southern District to consider the problem. The outcome was the establishment of a Joint Management Committee (JMC) under the constitution of WEA. Ultimately it was decided that the affairs of Southern District should be wound up, but that is not as yet complete. Mr Lochrie the General Secretary of WEA described the standing of the JMC as being a sub-committee of the National Executive Committee (NEC).

After being formulated, the JMC carried out a complete review and continued to provide the necessary services hitherto provided by Southern District itself. However by October 1989 it was clear, and indeed it was decided, that Southern District was not a viable entity.

Southern District was itself a registered charity and this, as the Tribunal recognised, was perhaps the strongest piece of evidence against the submission being made that District was really an integral part of WEA itself. The Tribunal also accepted that, in practice, Southern District was virtually autonomous, but not entirely so, and continue with this comment:-

"At all stages, it had to comply with the objects and aims of the Association, and it was subject to the very action which the National Executive Committee ultimately took. That Committee took that action that we have quoted above and we particularly draw attention to the fact that the Committee acting in such a way, does so under its responsibility for securing the welfare of the Association, not the welfare of the District."

Mr Picarda raised a number of points during his submission. The first was that the Tribunal had not given sufficient weight to the fact that Southern District was a separate legal entity, namely a charity, in that it was separately registered. He submitted that this was of itself of overriding importance - virtually decisive - and that the Tribunal had erred in failing to treat it in this way.

Secondly, he submitted that the Tribunal erred in law and misdirected itself in finding that the constitution showed that WEA was carrying on its activities under the name of Southern District.

Thirdly, he was critical of the reference in paragraph 23 to a "trading arm" and the analogy there used. He took the point that there was no question of trading in the sense in which it had been used.

Fourthly, he submitted that the history given by the Tribunal was not based upon evidence or, if there had been any evidence, it was so slight as not to warrant the findings of fact which had been made.

Fifthly, that the Southern District, save in the employment of the District Secretary, was fully autonomous insofar as employment of other staff was concerned and he turns to the contract itself.

His last and his main submission against which the earlier points were made, was that this case depended almost entirely on the proper construction to be given to written instruments and therefore it was not a case of mixed fact and law but it was purely a question of law.

We find ourselves unable to accept that last main submission. In our judgment this was a case where the decision rested upon a mixture of fact and law. The Tribunal heard evidence about the previous history and workings of the relationship between Southern District and WEA. It also is quite clear that when looking at the documentation and assessing it, the Tribunal were doing this against the fact that it had heard some evidence. It is possible that some of the matters raised were raised during submissions, but in an Industrial Tribunal this sometimes happens and unless there is an issue on the facts so stated, a Tribunal is entitled to accept that as evidence of fact. Reading the Decision as a whole and having read the Notes of Evidence we are satisfied that there was evidence here which was being considered by the Tribunal and from which they draw inferences and against which they looked at the two main documents. Those documents were the constitution of WEA and the Contract of Employment. To these two documents we now turn.

It will be simplest if we merely refer to those clauses in the constitution to which we were ourselves referred and upon which the submissions turned before turning to the arguments themselves.

"5. The Association shall be a voluntary, federal, national organisation, operating over the United Kingdom of Great Britain and Northern Ireland. It shall be organised locally into Branches by Districts and regionally into Districts by the National Executive Committee (NEC). The governing body of the Association shall be the National Conference as defined in clause 10 and between National Conferences the NEC. The NEC shall be also responsible for the management of the National Office and its finance and the national aspects of the Association's policy.

8.1 Districts shall be established on a geographical basis agreed by the NEC. The boundaries of Districts shall be reviewed from time to time after consultation with the Districts and Branches concerned. Districts shall act as the bodies responsible for providing adult education on behalf of the Association in their areas.

Each District shall have a written Constitution, which shall conform to this Constitution. The District Constitution, any Standing Orders, and subsequent amendments to these, shall be approved by the NEC.

8.3(iv)The District shall hold an Annual Meeting within 16 weeks of the end of the financial year. At the Annual Meeting there shall be presented the audited statement of accounts of the District in a format approved by the NEC and a report of the previous year's activities. At the Annual Meeting the Officers and Auditors of the District shall be elected for the coming year.

8.4(i)Districts shall be responsible in conjunction with the Branches where appropriate for organising the activities of the WEA within their areas, and for seeking and allocating resources effectively to this end.

(ii)Districts shall secure funds from appropriate sources including governmental sources, subject to the provisions of 8.5(ii), the collection of fee income District and Branch activities, other membership contributions, and by any other means consonant with the objects of this constitution and with the Association's charitable status.

(v)Each District shall employ a District Secretary who shall be the chief executive Officer responsible to the District for its operation, and to the National Association as determined by the NEC in ways consonant with 12.2.

(vi)Districts may appoint and employ such other staff as may be necessary. Districts shall ensure that staff are enabled to contribute to the formulation and development of the policy and administration of the District.

(viii)Districts shall contribute annually to the funds of the Association nationally. The rate shall be determined by a declared majority decision of those Districts replying within 6 weeks of notification of the rate proposed by the NEC. The ratification of the majority of Districts' views shall then be enacted by the NEC at its appropriate meeting.

(ix)In all activities Districts shall conform to the aims and objectives of the Association. They shall endeavour to work within the policies decided by National Conference and to develop programmes in accordance with these policies.

8.5(i)Districts shall cultivate close links with regional or district organisations, such as local education authorities, universities, community groups and Trade Unions, and shall represent the WEA in relation to these bodies.

(ii)Districts may approach national bodies within a framework laid down from time to time by the National Association.

9.NATIONAL EXECUTIVE COMMITTEE

9.3(xii)The NEC is responsible for securing the welfare of the Association. For this purpose, it can require from any District a detailed report by the District on its work and condition. Following the report the NEC may review the organisation, financing or staffing of that District. The NEC may subsequently convene a meeting of the members of that District and in the light of that meeting take whatever action is deemed necessary to ensure the financial viability of that District or to ensure that the aims and objects of the Association are being pursued.

12. APPOINTMENT AND EMPLOYMENT OF STAFF

12.1There shall be appointed for each District a District Secretary who shall be the chief executive officer.

12.2The District Secretary shall be responsible to the District and to the National Association within a framework to be established from time to time by the National Association.

12.4The NEC shall ratify the appointment, or dismissal, of District Secretaries.

12.6Districts shall have the power to employ such other staff as they may require, subject to any nationally agreed Terms and Conditions of Employment.

12.7(i)The NEC shall establish procedures to deal with the terms and conditions and related matters of staff employed by the Association.

(ii)The NEC shall establish a committee for these purposes and determine its terms of reference.

(iii)The Chair of this committee shall, unless a member of the NEC under clause 9.1 (a), (b), or (c) be an ex-officio member of the NEC.

(iv)The Committee shall report to the NEC.

13.FUNDS OF THE ASSOCIATION

13.1All monies raised or held in the name of the Association shall belong to the Association as defined in clause 5. This includes all assets including surpluses of income over expenditure and all reserve or special funds whether held in Branches or in Districts. All debts and liabilities reasonably and properly incurred in the name of the Association shall be the responsibility of the Association."

Mr Picarda points especially to Clauses 8.3(i), 12.6 and 13 as showing that this was an autonomous charity with a right to employ as it saw fit and to employ as an employer.

Mr McMullen for the Applicants submits that the Constitution shows that there was financial control of the Districts; secondly, that there was control in the terms and conditions under which any employee entered into employment and that there was overall control under Clause 9.3(xii) under which the NEC were responsible for financial viability. He emphasises that in fact Southern District was taken over and wound up by the JMC and that no body which was in that position could be said to be truly autonomous.

The Tribunal clearly weighed up the arguments on both sides and discussed many of the clauses which we have set out above. It reached the conclusion that WEA had very considerable control over Southern District and with this view we agree.

However, the vital document looked at against the background of all that we have dealt with so far is the Contract of Employment.

This document did not comply with Section 1 of the 1978 Act in that it did not identify the employer by name. It may be a document which is of a type frequently used, but it does not help the true identification of an employer unless it or he or she is properly identified. This document does not name the parties. It is clearly an agreement entered into between the Trade Union and WEA as to the terms and conditions of employment of the members of the Trade Union with WEA. It is clearly intended to cover all the various grades of staff, full time; part time; permanent fixed term and so on. Clause 1 in its relevant parts reads as follows:

"This statement brings together the minimum terms and conditions of employment under which Tutor Organisers, Development Officers, and any other staff whose duties and responsibilities are covered by Appendix 1 (hereinafter referred to as Field Staff) are employed; any improvements to those minimum terms and conditions that have been agreed within your WEA District; and terms and conditions personal to you..... besides this statement you should also read the WEA Employment Handbook, which you will be given in due course. Should you be satisfied at any time about the way in which any term or condition has been applied to you, you are entitled to register a grievance under the procedure at Appendix IV to this statement."

Clause 2 starts as follows:

"2.PERSONAL DETAILS

2a.Your employment with the WEA SOUTHERN District

began on 1st September 1968"

The other relevant Clauses and matters are as follows:-

"2c.Duties and Responsibilities

The potential range of duties and responsibilities of a member of the WEA's field staff are set out in Appendix I to this statement.

The agreed job description for this post is set out in Appendix IA.

Any changes shall be agreed by both parties."

It will be seen that there is a reference to WEA's field staff and secondly that both parties for any changes clearly refers to the field staff and the WEA.

Under Clause 2d salary is paid "in accordance with the WEA scale for field staff". By Clause 3 travel and other expenses are at a rate agreed at national level between WEA and the Trade Union. It also includes this phrase:

"These and all other necessary expenses incurred on WEA business will be reimbursed in accordance with the system of approval operated by the District."

Clause 6 deals with leave entitlement and contains the phrase in sub-Clause a:-

"Leave entitlement upon leaving employment with the WEA shall be calculated ..."

Under sub-Clause d. the following phrase appears:-

"After two years' employment with the WEA, application may be made for leave of absence without pay, or secondment."

Under Clause 9 dealing with sick leave appears the phrase:

"Period of Continuous Service with the WEA"

Clause 16 deals with the pension scheme and reads:

"Field staff working 16 or more hours per week may apply to join the WEA Retirement Fund; ... Further information is available in the WEA employment handbook."

Under Appendix I it is clear that field staff work under the day to day direction of Southern District. Under Appendix IV under Disputes Procedure there is a right to refer to the WEA and under the Disciplinary Problems and Disputes. In Appendix V the ultimate appeal is to a national body which includes equal members of the National Consultative Committee and the Trade Union. It is right to stress that authority to dismiss an employee is vested only in the District Committee unless otherwise specified in the District Constitution.

How then is that contract to be construed? It seems to us that against the background of the constitution of WEA (we have not seen, nor did the Tribunal see, the Constitution of Southern District) and bearing in mind that this Contract of Employment was drawn up between the Trade Union and WEA for the employment of field staff, the true understanding is that WEA employed all its staff but that the individuals were told with which district they would be working. This was relevant because the districts might have some provisions which were better than in other districts. The whole of the details of the Contract are as agreed between WEA and the Trade Union. The only contrary indication is the power in District to dismiss. This it would do as agent for WEA. If, and in so far as District had engaged the applicants, it seems to us that they engaged the applicants as agents for WEA. Great reliance was place by Mr Picarda upon Clause 2a of the Contract which reads:

"You employment with the WEA Southern District began on 1st September 1968."

We would merely comment that the expression is not your employment "by" the WEA Southern District and looked at in the context of the whole document it seems to us that the Tribunal was entirely right in weighing up the evidence and the documentation, and deciding that the true employer was WEA. The phraseology in paragraph 23 is perhaps not entirely fortunate but as we read the whole Decision it seems to us that what was being said was that District were merely agents for WEA in the same way as the District of British Gas might well enter into an agreement of employment with an individual but was only doing so as an arm of British Gas.

We are content that this is the true situation because the Industrial Members feel that unless the situation were such, enormous complications would arise in cases of redundancy where the Districts became insolvent. I agree with them and in particular we would all wish to draw attention to the answers given by Mr Lochrie to the Tribunal during the first day's Hearing, which is recorded on pages 4 and 5 of the Notes of Evidence. He said this:

"Forum - where all Districts reported. Districts have ceded to National Authority certain matters;

ieagreed salary scale

mileage allowance

terms and conditions of service

No right to employ and dismiss staff.

Can you require district to take action against employee?

Only instruct a District where there was a clear agreement.

JMC gave instructions for redundancy.

NEC had to seek transfer of areas.

Redundancy notices would have been issued anyway.

NEC agreed to it. Did not ratify it.

Financial provision for redundancies? Who meets costs?

Decision taken October in order that all costs would be met by District within financial year.

Document forecast deficit? Yes.

If deficit? NEC would have financial means of meeting deficit. Just as NEC would undertake normal liability in case of unfair dismissal.

If Southern District as part of WEA took decision which was wrong it would be wrong of WEA to wriggle out."

This passage from the Notes indicates to us that there must have been evidence, perhaps not all recorded in detail, upon which the Tribunal relied in reaching its decision.

For these reasons we are satisfied that the Tribunal did not err in law and that this appeal must be dismissed.