United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR T LINDEN (of Counsel) Messrs Pattinson & Brewer Solicitors 30 Great James Street London WC1N 3HA
For the Respondent	MR S DEVONSHIRE (of Counsel) Messrs Field Overell Solicitors 42 Warwick Street Leamington Spa CV32 4AG


 


JUDGE PETER CLARK: This is an appeal by the Applicants before the Ashford Industrial Tribunal, chairman Miss V G Wallis, sitting on 26 September 1997, against that Tribunal's decision consisting of a declaration that in the lead case of Mr Stafford he had been continuously employed by Hays Contract Personnel from and since 16 November 1992. We deal first with the chronology.

The Respondent, Gefco UK Limited (Gefco) distributed Citroen Peugeot vehicles from its Sheerness depot around the United Kingdom. It operated across six zones. Three of those zones were at one time contracted out to Richard Lawson Motor Company (Lawson). On about 9 April 1996 the work subcontracted to Lawson was taken back in-house by Gefco.

Mr Stafford and others were employed as drivers by Lawson. Prior to 9 April 1996 they signed a document dated 19 March 1996 issued by Hays Contract Personnel (Hays). It referred to a "POSITION AS SHEERNESS TRANSPORTER DRIVER" and employment by Hays under the direction of Gefco's Operations Manager at Sheerness. The Tribunal found that that document was a contract of employment made between the Applicants and Hays.

On 20 June 1996 the Applicants issued proceedings in the Industrial Tribunal against Gefco, alleging that a relevant transfer had taken place from Lawson to Gefco in April 1996 and claiming against Gefco unfair dismissal and unlawful deductions from wages on the basis that less favourable terms and conditions of employment had been imposed on them. Lawson were then added as Second Respondent.

By their notice of appearance Gefco took a number of points in the alternative, some on the basis that Gefco was the employer, others on the basis that Hays was the employer.

Those proceedings (the first Industrial Tribunal proceedings) were compromised in an agreement reached between the Applicants and Gefco only (the compromise agreement) dated 13 January 1997.

Prior to the date of the compromise agreement, Gefco had written to the Applicants on 11 December 1996 informing them of a salary increase with effect from 1 January 1997.

On 28 April 1997 Hays issued a new document to the Applicants purporting to offer each a position as driver on the terms set out. The document refers to Gefco as "our customer" and attached a "Statement of terms and conditions for employment for GEFCO TPPA", which referred to Hays as the "Payroll Administrator".

The Applicants refused to sign that document and commenced a second set of Industrial Tribunal proceedings against Gefco in June 1997, raising two issues; one, the identity of their employer, second, their period of continuous employment with that employer.

Gefco entered notices of appearance on 21 July 1997, attaching documents from Hays, without, in terms, pleading that Hays was the employer of the Applicants.

On 28 July 1997 the Industrial Tribunal wrote to the Applicants' trade union representative a letter which we have not seen. In his reply dated 21 August 1997, Mr Lambe, that representative, asserted on their behalf that Hays was not and never had been their employer.

Neither party applied to join Hays as second Respondent in the second proceedings, nor did the Industrial Tribunal of its own motion under Rule 17 of the Industrial Tribunal Rules of Procedure direct that Hays should be joined either before or at the Industrial Tribunal hearing which was held on 26 September 1997. Accordingly, at that hearing only the Applicants and Gefco appeared.

In their extended reasons dated 5 November 1997 the Industrial Tribunal in the second proceedings expressed their conclusions, leading to the declaration to which we have referred, at paragraph 16 in this way:

"We noted that there were anomalies in this case, for example, the contents of the COT3 settlement form, and the contents of the Notice of Appearance made no reference to Hays Contract Personnel as a relevant body. However, there was clear written evidence before us that Mr Stafford had entered into a contract with Hays Contract Personnel when he signed his acceptance of the terms and conditions contained in the letter of 19 March 1996. As he had not signed the subsequent contract, we concluded that it was this earlier contract that was still in force between him and his employer, Hays Contract Personnel. We accept that he works at the Gefco depot, and we accept his other evidence in that regard, but, in our view, this does not change the identity of his employer, with whom he signed his contract of employment."

We should add for completeness that only Mr Stafford gave evidence before the Industrial Tribunal; no oral evidence was called on behalf of Gefco.

In this appeal Mr Linden submits on behalf of the Applicants that the Industrial Tribunal erred in its analysis of the identity of the Applicants' employer at law by failing to take into account the effect of the compromise agreement, which he argues was couched in such terms that it could only amount to an agreement between the parties that from that date at least, whatever may have been the position before, Gefco was the Applicants' employer. The benefits conferred on the Applicants by Gefco under that Agreement, including continuity of service and remuneration, could only be conferred by their employer.

Alternatively, he submits that the Tribunal failed to take into account the compromise agreement when considering the factual matrix in which the identity of the employer came to be considered. In these circumstances, the decision should be set aside and the matter remitted for a rehearing before a fresh Tribunal.

For Gefco, Mr Devonshire takes four points. First, that the point now taken by Mr Linden was not taken below. We think that is incorrect; although not taken in the same way as Mr Linden has focused on it before us the material was before the Industrial Tribunal and it was argued on behalf of the Applicants that Gefco was the employer. Secondly, he submits that Mr Linden's argument only succeeds if there has been a novation of the original March 1996 contract made between the Applicants and Hays. He submits that since Hays were not a party to the compromise agreement the legal requirements for a novation have not been made out. However, we think that overlooks a possible finding by the fact-finding Tribunal that Hays, as the payroll administrator, impliedly consented to the novation as alleged, by authorizing its customer, Gefco, to enter into the compromise agreement. We emphasize that that point was not considered or raised below and requires factual findings by an Industrial Tribunal. Thirdly, mirroring Mr Linden's first position, he submits that the compromise agreement plainly does not have the effect contended for by the Applicants; Gefco agreed to secure certain benefits for the Applicants via Hays. Finally, his fall-back position is the same as that of Mr Linden; namely, that if the appeal is allowed, the matter should be remitted to a fresh Industrial Tribunal for rehearing rather than this Appeal Tribunal substituting a finding that Gefco is the employer.

In our judgment the Industrial Tribunal fell into error, probably as a result of the lack of focus on the issue below, in failing to consider the effect of the compromise agreement on the contractual employment relationship between the Applicants and first Hays and, possibly, subsequently Gefco. Secondly, it ought not to have made a declaration against Hays, which was not itself a party to the proceedings and had never been served with notice of the proceedings. Thirdly, we consider that the identity of the employer at the date of the second originating application requires a further factual investigation outside the scope of our jurisdiction.

In these circumstances, we shall allow the appeal, remit the matter to a fresh Industrial Tribunal for rehearing with a direction that Hays be joined at second Respondent. It will then be a matter for Hays as to what, if any, part it chooses to play in the proceedings.