United Kingdom Employment Appeal Tribunal

BAILII case number: [1995] UKEAT 932_94_0602

Appeal No. EAT/932/94

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 6th February 1995

Before

THE HONOURABLE MR JUSTICE MUMMERY (PRESIDENT)

MRS E HART

MR J C RAMSAY

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SOUTH DURHAM HEALTH AUTHORITY          APPELLANT

UNISON          RESPONDENTS

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellant MR J BOWERS

(of Counsel)

Mesrs Eversheds

Milburn House

Dean Street

Newcastle-upon-Tyne

NE1 1NP

For the Respondents MISS S MOOR

(of Counsel)

Messrs Brian Thompson & Partners

Percy House, Percy Street

Newcastle-upon-Tyne

NE2 4QW


 


MR JUSTICE MUMMERY (PRESIDENT) Prematurity may constitute a legitimate objection to the issue of legal proceedings or the taking of other steps in a legal dispute. Unless an alleged infringement of rights has already been committed or unless there is evidence of a real and present threat or intention to commit an infringement of rights in the future, there is no cause of action and courts and tribunals will, in general, decline jurisdiction as it is their function to resolve actual disputes. If the position is that there may be a dispute dependent on the occurrence of a future event which may never happen, it is unnecessary and inappropriate to trouble a tribunal. Assumption of jurisdiction would serve no useful purpose. It would waste valuable time better spent in cutting the queue of cases involving contentious issues and real disputes. Those in the queue would find it hard to understand why a court should entertain, prematurely, complaints by litigants about things that may never happen. Hypothetical and academic questions are generally treated as non-justiciable issues, more apt for the attentions of advisers (and writers) than for adjudicators.

There are cases of a more specific objection to premature proceedings. There may be a contractual time-table agreed between the parties which must be adhered to and completed before either party has a right to make a complaint in proceedings. There may be a statutory time-table in primary legislation or, more frequently, in delegated rules and regulations which must be observed before a person is entitled to institute legal proceedings. In most cases there will be no completed cause of action to justify the commencement of legal proceedings until there has been compliance with the requisite steps in the prescriptive time-table.

These general observations are intended to place in context the novel point on premature proceedings taken on behalf of the South Durham Health Authority by way of preliminary objection to the jurisdiction of the Industrial Tribunal to entertain the complaint by UNISON that the Health Authority is in breach of the duty to inform and consult under Regulation 10 of the Transfer of Undertakings (Protection of Employment) Regulations 1981 ("the 1981 Regulations") and under Article 6 of the Acquired Rights Directive EC/77/187. The objection is all the more unusual since, in the employment field, the most common jurisdictional objection taken on time is that the application has been presented too late, not too soon.

The Factual Background

Few cases have as few facts as this case.

UNISON is a recognised independent Trade Union for the purposes of Regulation 10 of the 1981 Regulations and is an employee representative for the purposes of Article 6 of the Directive. It was proposed, pursuant to the White Paper "Working for Patients", that the Health Authority would create a NHS Trust at the Darlington Memorial Hospital with effect from 1st April 1994. The Health Authority wrote to the shop-stewards at Darlington Memorial Hospital on 7th February 1994 providing certain information in respect of matters relevant to the transfer. On 24th February 1994 UNISON answered the letter of 7th February with a request for the provision of specified information as a matter of urgency, reminding the Health Authority of its

"statutory obligation to comply with providing this information and consultation to enable a smooth transfer over to the Trust for 1st April 1994."

The letter concluded with the request that the information be provided

... as a matter of urgency as I do not believe that the timetable, as it stands at the moment, ie your letter dated 7th February 1994 complies with the adequate consultation arrangements under Regulation 10. Once I have this information I think it would be appropriate that a meeting is set up to go through the issues."

On 11th March 1994 the Health Authority replied to that letter supplying UNISON with certain information and suggesting the arrangement of a meeting in the near future to discuss "any remaining issues you may have concerning the transfer of staff to Darlington Memorial Hospital NHS Trust."

On 16th March 1994 UNISON presented an Originating Application to the Industrial Tribunal complaining of breach of Regulation 10 of the 1981 Regulations and of Article 6 of the Directive. The complaint specified that, as at 14th March 1994,

"The transferor has failed sufficiently or at all to inform and/or consult with us as required in good time and/or long enough before the transfer to enable consultations to take place."

By Notice of Appearance dated 22nd April 1994 the Health Authority denied that it had failed to comply with its obligations and referred to the letters of 7th and 24th February and 11th March 1994. It was also contended that, if the Health Authority had failed to inform or consult, it was not just and equitable to award any compensation in respect of any such failure.

Jurisdictional Objection

About two weeks before the hearing at the Industrial Tribunal in August 1994 the Notice of Appearance was amended to raise an objection to jurisdiction under Regulation 11 of the 1981 Regulations. The amendment refers mistakenly to Regulation 11(5), which entitles an employee to present a complaint to an Industrial Tribunal in relation to failure to inform or consult. The relevant provisions of Regulation 11 are as follows:-

"(1) A complaint that an employer has failed to inform or consult a representative of a trade union in accordance with Regulation 10 above may be presented to an Industrial Tribunal by that union

...

(8) An Industrial Tribunal shall not consider a complaint under paragraph (1) or (5) above unless it is presented to the Tribunal before the end of the period of three months beginning with -

(a) the date on which the relevant transfer is completed, in the case of a complaint under paragraph (1);

(b) ...

or within such further period as the Tribunal considers reasonable in a case where it is satisfied that it was not reasonably practicable for the complaint to be presented before the end of the period of three months."

In the amendment to the Notice of Appearance the point taken was that, on a proper construction of Regulation 11,

"The earliest upon which an originating application may be presented under that Regulation is the date the relevant transfer takes place. The originating application was presented on 16th March 1994. The date the relevant transfer took place was 1st April 1994."

Decision of Industrial Tribunal

The Industrial Tribunal held at Newcastle upon Tyne on 18th August 1994 decided, through the Chairman sitting alone, that it had jurisdiction to hear the Originating Application. The Tribunal referred to Regulation 10(2) of the 1981 Regulations which provides -

"Long enough before a relevant transfer to enable consultations to take place between the employer of any affected employees of a description in respect of which an independent trade union is recognised by him and that union's representative, the employer shall inform those representatives of -

(a) the fact that the relevant transfer is to take place, when, approximately it is to take place, and the reasons for it; and

(b) the legal, economic and social implications of the transfer for the affected employees; and

(c) the measures which he envisages he will, in connection with the transfer, take in relation to those employee or, if he envisages that no measures will be so taken, that fact; and

(d) if the employer is the transferor, the measures which the transferee envisages he will, in connection with the transfer, take place in relation to such as those employees as, by virtue of Regulation 5 above, become employees of the transferee after the transfer or, if he envisages that no will be so taken, that fact."

After summarising the rival submissions of counsel for the Health Authority and for UNISON, the Tribunal came to the following conclusions in support of the decision that it had jurisdiction to hear the complaint. Those reasons were notified to the parties on 5th September 1994.

(1) Regulation 10(2) of the 1981 Regulations gives importance to consultations taking place "long enough before a relevant transfer". That important duty arose not or around the time of the transfer, but well before the proposed transfer.

(2) On the Health Authority's construction of Regulation 11, there would be no remedy in the case of an employer who completely flouted his obligation to consult or elongated the period between the proposed transfer and a transfer to such an extent that meaningful consultations were not practicable.

(3) Regulation 11 was not intended to be interpreted literally to have such an effect. The Tribunal rejected the application to the construction of Regulation 11 of decisions of the Employment Appeal Tribunal reached on the similarly worded provisions relating to time limits in S.67(2) of the Employment Protection (Consolidation) Act 1978. The context and the remedies afforded under the 1978 Act and under the Regulations were significantly different.

(4) The Tribunal was impressed by the comments of Popplewell J. in Banking Insurance & Finance Union v. Barclays Bank Plc [1987] ICR 495 to the effect that "It would be quite contrary to the whole spirit of the legislation and to the Directive if there were to be no sanction for failure to consult in relation to a proposed transfer which happened not to take place. ... The Regulations say nothing as to when the complaint can be presented and industrial common sense dictates that an actual transfer is not an essential part of the bringing of a complaint." (p.505)

The Health Authority appealed by a Notice of Appeal served on 20th September 1994, contending that the Chairman of the Tribunal had erred in law in the construction of Regulation 11(8) in such a way as to permit the presentation of an originating application before the completion of the relevant transfer.

The Health Authority's Submissions

On behalf of the Health Authority Mr Bowers made the following submissions.

(1) Properly construed, Regulation 11(8) of the 1981 Regulations only permits the presentation of an originating application on or after a relevant transfer. The first date upon which a complaint may be presented to the Industrial Tribunal is, in the words of Regulation 11(8)(a) "the date on which the relevant transfer is completed". There is no completed cause of action until the transfer has taken place.

(2) The Tribunal erred in law in failing to place on Regulation 11(8) an interpretation consistent with the interpretation placed by earlier decisions on similarly worded provisions concerned with premature applications for statutory redundancy payments. Mr Bowers referred to P J Watts v. Rubery Owen Conveyancer Ltd [1977] IRLR 112 and Pritchard-Rhodes Ltd v. Boon [1979] IRLR 19. The decision in both cases was that applications to the Industrial Tribunal for redundancy payments were ineffective because they did not comply with the statutory requirements which, on their true construction, provided that an application could not be effectively made to an Industrial Tribunal for redundancy payment earlier than the date of termination of the contract. The applications were not made in proper time because they were made before the date of termination. As Mr Justice Kilner-Brown stated in the case of P J Watts v. Rubery Owen Conveyancer Ltd (supra), after reviewing earlier authorities, (p.113) -

"The effect of these cases is that where an application is made to an Industrial Tribunal before the act of dismissal has taken place it is a premature application and the Industrial Tribunal has no jurisdiction."

Mr Justice Slynn applied that decision in the later case of Pritchard-Rhodes Ltd v. Boon (supra).

(3) Reference was also made to the provisions of S.67(2) and (4) of the 1978 Act -

"(2) Subject to subsection (4) an Industrial Tribunal shall not consider a complaint under this section unless it is presented to the Tribunal before the end of the period of three months beginning with the effective date of termination or within such further period as the Tribunal considers reasonable in a case where it is satisfied that it was not reasonably practicable for the complaint to be presented before the end of the period of three months.

...

(4) An Industrial Tribunal shall consider a complaint under this section if, where the dismissal is with notice, the complaint is presented after the notice is given notwithstanding that it is presented before the effective date of termination ..."

(4) Mr Bowers repeated the argument advanced by him before the Industrial Tribunal that Regulation 11(8) was in the same form as S.67(2) of the 1978 Act and the addition of subsection (4) was a statutory recognition of the fact that, but for the provisions of that subsection, an Industrial Tribunal would have no jurisdiction to consider a complaint presented before the effective date of termination. Mr Bowers criticised the reasoning of the Tribunal in paragraph 7 of the decision to the effect that, although similarly worded, the provisions of S.67 of the 1978 Act afforded different remedies and that, under the Regulations, a declaration could be made in respect of any breach which might be followed by an award of compensation. He submitted that there was no difference in substance between the language of Regulation 11(8) and that of S.67. Mr Bowers also questioned the reasoning of the Industrial Tribunal for rejecting his interpretation of Regulation 11(8), that there would be no remedy in a case where the employer failed to consult and no actual transfer took place. In such a case there would be no need to consult in any event.

(5) Finally, he rightly observed that the comments quoted in the decision of the Industrial Tribunal from the judgment of Mr Justice Popplewell in the case of Banking Union v. Barclays Bank Plc (supra) were obiter and per incuriam.

Conclusion

In our judgment, this appeal should be dismissed because there is no error of law by the Chairman of the Tribunal in his construction of Regulation 11(8) of the 1981 Regulations.

Read in its ordinary and natural meaning, the Regulation only specifies an end date for the presentation of a complaint to the Tribunal ie, before the end of the period of three months beginning with the date on which the transfer is completed. The complaint by UNISON on 16th March 1994 was presented before the end of that three month period. The Regulation does not in terms specify a start date or prohibit an Industrial Tribunal from considering a complaint presented to the Tribunal before any particular date. In other words, it is a limitation provision which prohibits the Industrial Tribunal from considering complaints presented after a certain date. It is not a provision concerned with the accrual of a cause of action necessary to entitle a person to present a complaint to a Tribunal. It cannot be said that this was a premature complaint in the true sense, that is, a complaint made before there was anything to complain about. We agree with the Industrial Tribunal that it is clear from Regulation 10(2) that the duty to inform and consult trade union representatives is one that should be performed before a relevant transfer and long enough before to enable consultations to take place. This complaint was presented two weeks before the relevant transfer took place and during a period when UNISON were claiming a right to be provided with information and to consultation. That is to be distinguished from the provisions of S.67 of the 1978 Act which make it clear that there is no entitlement to present a complaint until, at the earliest, notice of dismissal has been given. There is no right of action for unfair dismissal until employment has been terminated or, at the very least, until notice of dismissal has been given. Similarly, in the case of entitlement to redundancy payments discussed in the authorities relied on by Mr Bowers there is no right of action, no entitlement to the payments, before the date of termination has arrived. An originating application for payment before a cause of action has arisen is therefore premature.

For those reasons it is unnecessary to express a view on the further submission of Miss Moor, on behalf of UNSION, that Regulation 11(8) of the 1981 Regulations should be given a purposive construction in order to implement the provisions of the Directive and that the construction advanced on behalf of the Health Authority would not provide as effectively as the Directive the right to prior information and/or consultation derived from Article 6.

For all those reasons, the appeal is dismissed.

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On behalf of the Respondents, Unison, Mr Linden made an application that the South Durham Health Authority pay the costs of this appeal. The application is made under Rule 34(1) of The Employment Appeal Tribunal Rules 1993. Under that rule it is provided:

"Where it appears to the Appeal Tribunal that any proceedings were unnecessary, improper or vexatious or that there has been unreasonable delay or other unreasonable conduct in bringing or conducting the proceedings the Tribunal may order the party at fault to pay any other party the whole or such part as it thinks fit of the costs or expenses incurred by that other party in connection with the proceedings."

Rule 34(2) provides:

"...the Appeal Tribunal may assess the sum to be paid or may direct that it be assessed by the taxing officer..."

The basis of Mr Linden's submission is that the appeal which has failed, was brought on a technical point in circumstances where no prejudice had been suffered by the Durham Health Authority as a result of the alleged defect. Mr Bowers said that there was nothing unreasonable in bringing the appeal. It was on a point that had not been decided before and there were cases from which he could argue by analogy that these proceedings were premature. He added that the case involves a lot of money and it was legitimate to take this point. Mr Linden's response to that was that it was not legitimate to take such a point in the context of proceedings before an Industrial Tribunal which are meant to be informal, non-technical and expeditious. The effect of taking the point has been to hold up the progress of the proceedings for a substantial time.

Having considered these arguments on costs which the parties have agreed should be put to Mrs Hart and myself in the absence of the third member of the Tribunal, Mr Ramsay, we have reached the conclusion that the Appellants should be ordered to pay the costs of the appeal.

The appeal, in our view, was an unreasonable one. It might have been legitimate to take the point before the Industrial Tribunal. The Tribunal heard the arguments and decided the point against the Health Authority. The reasons given by the Tribunal for the decision were clearly correct. It was unreasonable to ventilate the matter further on appeal. There was no possible prejudice to the Health Authority in the proceedings being taken out before the transfer. It was the right thing to do. The Originating Application complained of non-consultation in relation to a proposed transfer. The non-consultation complained of was current when the proceedings were issued. This is not a case where there was any objectionable prematurity. There was no prematurity at all.

We have not been given any figures on which we could assess the sum to be paid. Unless we are now given some figures, or unless the parties are able to reach some agreement between themselves about the amount of the costs, we give a direction that the costs are to be taxed by the taxing officer.