United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR A HUDSON (of Counsel) Appearing under the Employment Law Appeal Advice Scheme


 


MR JUSTICE BELL: This is a preliminary hearing of Mr Bhatia's appeal against the decision of the Employment Tribunal, in fact a Chairman sitting alone, held at London (South) on 6th May 1999 and promulgated on 11th May 1999, dismissing the appellant's Originating Application, presented as long ago as 1st July 1997, by which he complained that the wages which he received from the respondent amounted to an unlawful deduction contrary to section 13 of the Employment Rights Act 1996.

1. In view of the fact that we propose to allow this appeal to go ahead, there is no need to go into the background in any great detail. The essence of it is that Mr Bhatia had been employed since 1982 by a company called EACS which had a contract for supplying spirits, cigarettes and gifts for British Airways to carry and sell on international flights. That contract came to an end on 31st March 1996 and British Airways let the arrangements to the respondents, Wincanton Logistics.
2. Mr Bhatia went to work for the respondent Wincanton on terms which he contends led to a serious reduction of wages. He brought his proceedings before the Employment Tribunal on the basis that this was a "TUPE transfer" so that he was employed by Wincanton on the same terms as he had been employed by EACS and that in paying him sums which Wincanton said were due to him under a new agreement on or about 9th April 1996, Wincanton had made unlawful deductions from the wages to which he was entitled. The more complete facts are set out at paragraphs 9 to 15 of the decision, which is under appeal.
3. In fact, an earlier tribunal whose decision had been overruled on another matter had resolved that there was not a TUPE transfer is this case, although it is clear that EACS, Mr Bhatia and Wincanton thought that there had been.
4. The decision under appeal was (paragraph 23) that Mr Bhatia had accepted the change in terms and conditions which were contained in a letter which he signed on 9th April 1996 and therefore could not bring a complaint on the basis that he ought to have been paid in accordance with the terms of the remuneration which he had at EACS.
5. Having set out the facts, the tribunal explained its route to its conclusion that Mr Bhatia must fail at paragraphs 21 and 22 of the decision:

"21. I find that the letter addressed to Mr Bhatia offering him work with Wincanton to be the vital letter in this case. The phrase "this offer constitutes an agreed change to your terms and conditions of employment" persuades me that Wincanton accepted an obligation to pay Mr Bhatia at his EACS rate, but with the intention of seeking his agreement to a substantial reduction in those rates with immediate effect.

22. However, I find that Mr Bhatia cannot rely on that to substantiate his claim because:-

(a) that offer was made under a mistake of law. They were not under an obligation to seek his consent to the new terms because at common law this was a new contract which they could lawfully have offered at the outset; and

(b) he signed his acceptance of that contract. There is no evidence before me that his signature is of no effect because it was obtained under duress. He may not have liked the new terms, but that does not amount to duress. Although he may have grumbled about them to his supervisors he made no specific written complaint about him, I find this particularly significant because the two complaints he made about sick pay and retirement both met with positive responses from his managers and he had no reason to believe that any formal protest in writing would necessarily have been swept aside."

6. Mr Bhatia issued a Notice of Appeal dated 11th July 1999. The ground of appeal put forward was that:

"… the Industrial Tribunal made the decision without sufficient regard to the evidence."

Thereafter a number of detailed allegations and submissions were made.

7. The matter came before this tribunal presided over by the President, Lindsay J, on 22nd October 1999. Lindsay J canvassed a number of potential difficulties with the reasoning as expressed in the decision of the tribunal under appeal, and raised two further matters which in this tribunal's view might indicate that there had been significant errors of law or procedure in failing to deal with matters of law which it would appear might arise on the facts of the case.
8. Mr Hudson, to whom we are very grateful appearing under the auspices of ELAAS, has identified the matters which, with the help of Lindsay J's judgment, and his own analysis of the papers, he contends are worthy of argument before the court on an inter partes appeal. They are as follows: firstly, that there is a real difficulty in understanding the reasoning of the Chairman in paragraphs 21 and 22(a) of the decision under appeal. It can be argued that paragraph 21 contains a contradiction within itself in speaking of an agreed change to Mr Bhatia's terms and conditions of employment, yet an obligation to pay him at the pre-existing rate, and that paragraph 22(a) does also in saying that Wincanton were "not under an obligation to seek [Mr Bhatia's] consent to the new terms because at common law this was a new contract which they could lawfully have offered at the outset". It might be argued that it is difficult to see how there could be a new contract unless Wincanton sought Mr Bhatia's consent to the new terms. The Employment Appeal Tribunal invited the Chairman's comments on paragraph 21. We have those comments in the form of a letter before us, but it seems to us that it is at least arguable that the letter does not explain the potential contradictions and that it is also arguable that even if it does the Employment Appeal Tribunal is not entitled to take the explanation into account in judging whether the Extended Reasons given by the tribunal were sufficient to make it clear to Mr Bhatia why he had lost his application. All those matters would form the basis of a first ground of appeal which Mr Hudson is prepared to draft if this matter goes ahead.
9. We give leave to amend the grounds of appeal to contain that first ground, which really can be put in the form of this question: whether paragraphs 21 and 22(a) were sufficiently clearly expressed to make clear the basis upon which Mr Bhatia had lost his claim, if not, whether this tribunal is entitled to take into account the Chairman's further comments.
10. The second ground of appeal canvassed by Mr Hudson depends upon the statement in paragraph 22(a) that Wincanton made its offer of employment on new terms "under a mistake of law". Mr Hudson says that that was a point which was not addressed in the respondent's Notice of Appearance to Mr Bhatia's IT1. That was a point which Lindsay J addressed. He asked for the Chairman's comments on that matter, but the Chairman's letter did not actually deal with that matter. It seems to us that this is an arguable point as well: that Mr Bhatia was deprived of fairness in the dealing with his appeal in fundamental breach of natural justice in that he had no opportunity to deal with a point upon which the Chairman ultimately relied.
11. The third ground of appeal canvassed by Mr Hudson depends upon his information from Mr Bhatia that it was argued before the tribunal that since all parties (EACS, Mr Bhatia and Wincanton) agreed that there had been a TUPE transfer even though in fact there had not, and that that was confirmed in paragraph 8 of the Wincanton's letter dated 3rd April 1996 signed by Mr Bhatia on 9th April 1996, Wincanton was estopped from contending that the terms of Mr Bhatia's employment by it were other than the terms under which he had worked for EACS. Lindsay J dealt with this point in paragraph 3 of the Employment Appeal Tribunal's judgment, at page 2E-H (page 53 of the bundle), and he asked for the Chairman's assistance in respect of that. The Chairman's letter did not deal with this point either.
12. In summary, therefore, we allow this appeal to go ahead. We allow it to go ahead under what we will call the omnibus ground that the tribunal made its decision without significant regard to the evidence but elaborated and extended on the three bases which we have attempted to describe. Mr Hudson has been kind enough to indicate that he is prepared to draft those grounds for Mr Bhatia to sign, if Mr Bhatia agrees of course, and we direct that that be done within seven days and that the matter go ahead to appeal on the redrafted grounds only.
13. We give that leave without prejudice to the respondent's entitlement to argue at the appeal hearing that the amendment would allow the introduction of a point which was not taken before the tribunal, if it is the tribunal's case or the respondent's case that contrary to the instructions which Mr Bhatia has given to Mr Hudson, the estoppel point was in fact not raised before the tribunal.
14. The case is to be listed for half a day, Category B. Skeleton arguments not less than 14 days before the hearing of the appeal. Leave to the parties to adduce evidence in whatever form they choose as to whether the estoppel point was ever raised.