United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR N RANDALL (of Counsel) Messrs Hopkin & Sons Eden Court Crow Hill Drive Mansfield Nottinghamshire NG19 7AE
For the Respondents	MR N UNDERHILL QC And MR B NAPIER (of Counsel) Nabarro Nathanson 7 South Quay Victoria Quays Wharf Street Sheffield S2 5SY


 


MR JUSTICE CHARLES:

1. This case arises out of the transaction which was the subject of the Meade and Baxendale litigation which went to the House of Lords (see British Fuels v Baxendale & Another and Wilson & Others v St Helens Borough Council [1998] ICR 1141 "the Meade and Baxendale case").
2. The appellant (Mr Gregory) argues that his position is unique and different to that of the employees whose claims were the subject of the cases before the House of Lords and therefore he maintains that his claim is not covered by the decisive reasoning of the Meade and Baxendale case.
3. Although some of them are not dealt with by the Employment Tribunal the facts are not disputed. Essential background facts are as follows:

a) National Fuels Distributors Limited (NFD), a subsidiary of British Coal (BC) merged with, and its business was transferred to, British Fuels Ltd (BFL) on 1 September 1992,

b) at the time of the merger NFD and BFL were of the view that the merger did not result in a TUPE transfer,

c) it is now accepted that the merger was a TUPE transfer,

d) Mr Gregory was an employee of NFD,

e) on the occasion of the merger the "package" was that all the employees of NFD were dismissed receiving redundancy payments under the BC schemes and were offered immediate reengagement by BFL on its standard terms which were less favourable than NFD's,

f) the dismissal and the offer of re-engagement were contained in letters both dated 20 August 1992 and sent out by NFD and BFL respectively, both letters were addressed to the employees at their place of work,

g) the letter of dismissal dated 20 August 1992 written by NFD to all its employees dismissed the employees with effect from 28 August 1992 (which was a Friday and Monday 31 August was a Bank Holiday),

h) the letter dated 20 August 1992 written by BFL offered new employment from 1 September 1992 and asked that such offer be accepted by 26 August 1992,

i) at the time the letters of 20 August were sent out, and at the date of the transfer, Mr Gregory was on holiday,

j) there are no findings by the Employment Tribunal as to where, when or how Mr Gregory received the letters but it was accepted before us that he received them both on his return to work after his holiday on 2 September and thus after the TUPE transfer on 1 September. Further it seems to us that the inference from the notes of Mr Gregory's evidence prepared by the Chairman is that he received both letters together by being given them in the office on his return on 2 September 1992,

k) on 2 or 3 September 1992 Mr Gregory signed the letter dated 20 August 1992 written by BFL and thereby (on the face of it) accepted the offer of employment by BFL contained therein,

l) following his return from holiday Mr Gregory was paid cash in lieu of notice and the redundancy payments referred to in the letter written by NFD of 20 August 1992 by BC (or NFD and BC) which totalled approximately £22,000,

m) following his return from holiday Mr Gregory was therefore treated in the same way, and received the same types of payment, as the employees whose claims were dealt with in the Meade and Baxendale case, and

n) on 31 March 1995 Mr Gregory was dismissed on grounds of redundancy.

4. The essential difference between Mr Gregory's position and that of the employees whose claims were the subject of the Meade and Baxendale case is that he did not receive the letters dated 20 August 1992 until after the date of what is now accepted to be, but which at the time was not thought to be, a TUPE transfer on 1 September 1992. He received them on the next day i.e. 2 September 1992 when he returned from holiday.
5. The Meade and Baxendale case decided that an actual dismissal before, on or after a TUPE transfer was effective and not a nullity.
6. Mr Gregory's argument is that in his case there was no dismissal. If he is right as to that he asserts that a reference to the ECJ would be required to resolve the issue that would then arise as to whether the contract of employment continued by TUPE was effectively varied. Having regard to what Lord Slynn says in the Meade and Baxendale case at [1998] ICR at 1165 C/E it was (in our judgment correctly) accepted that if it arose this "variation issue" should be referred to the ECJ.
7. On the question whether Mr Gregory was dismissed we heard some helpful and interesting submissions as to the meaning and effect of regulation 5(2) of TUPE. At one stage Counsel for BFL described some of the points raised as "seminar points". We agree with that description. We have concluded that it is unnecessary and inappropriate for us to decide the issues raised in argument on the meaning and effect of regulation 5(2) of TUPE.
8. In our judgment in determining whether Mr Gregory was dismissed we should take a practical and common sense approach having regard to all the circumstances, and in particular:

(a) the letter written by NFD,

(b) the payments made in accordance with that letter,

(c) the fact that the merger was a TUPE transfer which had the result that Mr Gregory's contract of employment was not terminated by the transfer but had effect after it as if it had originally been made with BFL,

(d) both NFD and BFL were of the view at the time that the merger was not a TUPE transfer, and

(e) the offer of employment by BFL and its purported acceptance.

9. In our judgment a practical and common sense approach leads to the conclusion that the letter of 20 August 1992 written by NFD was adopted, acted upon and intended to have effect by all the relevant persons namely Mr Gregory, NFD (and its parent company BC) and BFL in that:

(a) Mr Gregory accepted the payments referred to in the letter written by NFD and accepted the offer of new employment by BFL, after the date for acceptance referred to in the letter,

(b) BFL left open, or made, its offer to employ Mr Gregory on the basis that his earlier contract of employment had been terminated by and in accordance with the letter written by NFD, and

(c) NFD and its parent company BC made the payments referred to in the letter written by NFD.

The position was therefore that they were all adopting and implementing what we have referred to as the "package" in paragraph 3(e) hereof.

10. For example, the companies did not take the approach that as Mr Gregory had been away and had not received the letters of 20 August before the merger took place his contract of employment had been terminated by the fact of the merger, which would have been the consequence of the merger if the view they held at that time had been correct and TUPE had not applied. Rather following Mr Gregory's receipt of the letters on 2 September by them being handed to him by someone in the office (and thus by an employee of BFL), or his receipt of them in some other way (and in our judgment it does not matter how he received the letters after his return from holiday) BFL and Mr Gregory adopted and implemented the letter written by NFD of 20 August. In our judgment this is so whether or not the effect of Regulation 5(2)(b) of TUPE is that the letter should be treated as being written and sent by BFL. NFD (and BC) also adopted and implemented the letter written by NFD of 20 August 1992 by making the payments referred to therein.
11. In so adopting and implementing the letters of 20 August 1992 all of them knew that they referred to dates that had past and that the letter of 20 August 1992 written by NFD was describing a situation and a contract of employment that existed in the past. When Mr Gregory returned from holiday the situation on the ground was that NFD were no longer there and were no longer acting as Mr Gregory's employers.
12. In those circumstances in our judgment the argument advanced by Mr Gregory that because the letter of 20 August written by NFD refers to "your employment with National Fuel Distributors Ltd" (i) it, and its receipt by him following his return from holiday, was ineffective to terminate his contract of employment (and thus his employment), and (ii) therefore he was not dismissed on 2 September 1992, is wrong. We are of this view because in our judgment the letter should be read and given effect to as referring to the contract of employment Mr Gregory had with NFD.
13. If the letter is so read and given effect to in its context and thus having regard to the facts that contrary to the understanding of the companies at the time:

(a) the merger was a TUPE transfer, and therefore

(b) the contract of employment that Mr Gregory had entered into with NFD, and therefore had had with NFD, was to have effect as if it had originally been made with BFL

in our judgment the letter is to be construed and has effect as a letter which terminates the contract of employment Mr Gregory had with NFD (and which had been continued by TUPE).

14. In our judgment it follows that on his return from holiday Mr Gregory's contract of employment that was continued by TUPE was terminated and he was dismissed.
15. Thus in our judgment there is no material distinction between Mr Gregory's position and the position of the employees whose claims were the subject of the Meade and Baxendale case, and therefore Mr Gregory's appeal should be dismissed.