United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR J MCMULLEN QC And MR D BROWN (of Counsel) Instructed By: Ms Ruth Harvey Messrs Hammond Suddards & Edge Solicitors, 7 Devonshire Square Cutlers Gardens London EC2M 4YH
For the First Respondent For the Third Respondent For the Fourth Respondents	MR R ELLIS (Solicitor) Instructed By: Messrs Rowley Ashworth Solicitors 247 The Broadway Wimbledon, London SW19 1SE MISS J EADY And MISS A PALMER UNISON 179 Preston Road Brighton E Sussex BN1 6AG MR K BAKER (Representative) Citizens Advice Bureau 14-16 Anchor Springs Littlehampton West Sussex BN16 6BP


 


MR JUSTICE HOOPER:

1. There is due to be heard tomorrow, a hearing in which 237 ex-employees of the Appellant are due to discover how much, if anything, the Appellant owes them in connection with claims for redundancy and for payment in connection with wages.
2. The background to this matter is that the Appellant had a contract with the West Sussex County Council to provide hot meals in primary and secondary schools. In some cases these meals were cooked on the premises and in other cases they were cooked off the premises and brought on to the premises. In simple terms the Appellant looked after all aspects of the supply of school meals.
3. In 1999, West Sussex County Council decided that insofar as primary schools were concerned, the midday meal was to consist of sandwiches. After certain negotiations, a company known then as Gardner Merchant, now Sodexho, won the contract to supply the sandwiches. A substantial number of the Appellants' employees including these 237 were involved in the provision of meals to primary schools.
4. On 16 June the Appellant wrote to all affected staff confirming that the school meals contract with West Sussex County Council was coming to an end on 31 July 1999. It was the Appellant's contention, which they referred to in that letter, that under the Transfer of Undertakings (Protection of Employment) Regulations 1981 ("TUPE"), the employees would have their contracts taken over either by West Sussex County Council or Gardner Merchant or by both and that was a view with which West Sussex and Gardner Merchant did not agree.
5. In the balance of the letter, Castle View wrote:-

"We regrettably are left with no option but to serve you with 12 weeks' notice of termination of your employment."

6. On 31 July, the employees were given their P45s and were paid for any outstanding money up to that date. They were not paid for the balance of the period of 12 weeks referred to in the letter.
7. The Employment Tribunal decided that a preliminary issue as to whether there was a transfer of an undertaking for the purposes of TUPE should be decided first. That was decided after an eight-day hearing in a manner that was not favourable to the Appellant. The Appellant has appealed that decision.
8. The Appellant has indicated that the decision of the Tribunal raises points of European law and is asking the Employment Appeal Tribunal to refer the matter to the European Court of Justice.
9. In the meantime the issue arose as to what was to happen to the Respondents' cases. Would the many employees, including these 237, receive money or would they have to wait until the conclusion of the proceedings before the appellate court or courts and before the European Court of Justice should there be a reference to that court?
10. The Appellant sought to persuade the Tribunal to delay the decision as to how much money, if any, was due to the ex-employees. The Tribunal did not agree. From that decision this appeal arises.
11. The Tribunal gave their decision on 11 December and before looking at it, it is helpful to look at the directions that were given on the same day. Paragraph 1 required the Applicants to serve on the Tribunal and the Respondent a schedule setting out the nature of their claims. This has been done by the 237 Applicants who are represented before us today. There are some 90 who have not responded. Paragraph 2 required the Respondent to notify the Tribunal and all Applicants by 21 February 2001 (three weeks after the service of the schedule) of all matters remaining in dispute together with its calculation of any sums which it concedes are due. The response to that may be found at page 17 of the bundle. It reads as follows:

"Castleview, the First Respondent, confirms that all matters remain in dispute and that there are no sums which are conceded as due. In this respect we attach a schedule, prepared by our client, setting out their response to the figures submitted by UNISON, Messrs Rowley Ashworth and the CAB, notwithstanding that no sums are thereby admitted. In this respect, the First Respondent reiterate its previously set out position (which is, of course, the subject matter of its first and second appeal) that no redundancy situation in fact exists, and in any event there has been no findings by the Tribunal giving rise to any jurisdiction to fix a remedies hearing."

Those latter words were written under a misapprehension that the Tribunal had already decided to move to a remedies hearing without deciding the necessary preliminary issues of law.

12. In paragraph 4 of the Directions the Tribunal ordered that the matter would proceed to final hearing on 13, 14 and 28 March 2001. The Order said:

"The Tribunal will consider first all matters of jurisdiction before proceeding to liability and remedy."

The 13^th March is tomorrow.

13. Mr Brown of Counsel, who appeared for the Appellants on that hearing on 11 December, accepted that three days would be about the time needed to resolve the outstanding issues.
14. We turn to the Extended Reasons given by the Tribunal for refusing to adjourn. In paragraph 2 they refer to the Respondents' arguments for proceeding to the next stage of the proceedings. In paragraph 2 the Tribunal referred to an argument on behalf of the Sodexho and West Sussex that they should now be discharged from the proceedings. That order was made and, although that order was to be challenged before this Tribunal, that challenge has been sensibly abandoned.
15. In paragraph 4 the Tribunal notes that Mr Brown for the Respondent sought an order that all matters be adjourned until after his client's appeal or appeals had been disposed of. The Tribunal wrote (paragraph 4):

"There are two appeals one to the EAT and another to the ECJ. Taking a practical view it is unlikely that such appeals will be disposed of in under 3-5 years."

16. The reference by the Tribunal to an appeal to the ECJ appears to be an error on its part. The Tribunal was contemplating a reference to the ECJ about which Mr Brown must have addressed it.
17. Mr McMullen QC attacked that estimate of 3-5 years. Whether that is unduly pessimistic, it would certainly take a considerable period of time should there be, as the Appellant is requesting, a reference to the European Court of Justice on a point of law. That would involve either the Tribunal or the Court of Appeal or the House of Lords making such a reference and then waiting for the decision of the European Court of Justice following that decision. The matter would then have to be considered again by the appropriate domestic tribunal or court.
18. In paragraph 5 the Tribunal noted that the Applicants had been dismissed at the end of July 1999 and had already waited for almost 18 months for a decision to be made on the preliminary issue of whether or not there was a transfer pursuant to TUPE.
19. In paragraph 6 the Tribunal noted that the Applicants' claims were principally claims of redundancy. There then follows this important passage:

"If the Tribunal's decision is overturned and it be found that there was a relevant transfer the Applicants may have claims for unfair dismissal and/or redundancy. All parties agree that the minimum basis of the Applicants' claims will be quantified in an amount not less than a redundancy payment whether it is paid as a redundancy payment, or as a basic award, if they were unfairly dismissed."

20. That matter was explored during the course of argument this afternoon. Following some misunderstanding it became clear that, in large measure, if the Appellant's appeal was successful and it was found that there had been a transfer then the employees would be entitled to a very similar sum of money, albeit not from the Appellant but from either West Sussex and/or Sodexho.
21. Mr Lynch on behalf of West Sussex offered an indemnity. The Tribunal set out the indemnity in paragraph 13 and we have taken the liberty to alter one or two words which appear to be typographical errors. It reads as follows:

"West Sussex County Council undertakes to repay to Castle View any sums which Castle View pay to any of the Applicants in the proceedings subject to the preliminary hearing under the belief that TUPE did not apply to the said Applicants if it is subsequently found that West Sussex County Council or Sodhexo are ultimately found liable pursuant to TUPE to pay those sums to the said Applicants should it be that TUPE is ultimately found to apply. The above undertaking is given on the basis that the said Applicants give credit to West Sussex County Council for any sums received by them from Castle View."

22. One of the grounds of appeal raised by the Appellants in their original and amended grounds of appeal and argued before us today was that that undertaking did not give the Appellants the protection that it should do. It was submitted that the last sentence reduced the protection because there was nothing to prevent the ex-employees from requiring to be paid twice. In the words of Mr Willis "it was as if Christmas was coming twice in the same year".
23. We were addressed on that by Mr Ellis, Mr Baker and Miss Eady, who represent between them the 237 ex-employees, whose hearings are anticipated will go ahead tomorrow. Mr Ellis made it quite clear that everyone understood that the Applicants would not expect (and could not possibly demand) to be paid twice. All three, Miss Eady, Mr Baker and Mr Ellis agreed that it could be a term of the order of this Tribunal in dismissing the appeal that, unless a particular Applicant gave an undertaking to give credit then the proceedings would be stayed until either they gave an undertaking or, alternatively, the issue of the TUPE transfer had been resolved against the Appellant should that occur. We make an order that such an undertaking should be given. We are not minded to try and draft the undertaking. We would expect those involved representing the Appellant and these Respondents to draft the necessary undertaking. That disposes of that ground of appeal.
24. In paragraph 10 the Tribunal set out its reasons why it was not prepared to adjourn the hearing into what payments, if any, were due to the Respondents, as follows:

"The essence of employment tribunals is to dispense justice expeditiously and within this jurisdiction the maxim that 'day defeats justice' is most apposite. There are competing interests in the decision this Tribunal is asked to make today. On the one hand if it proceeds and makes awards in favour of those Applicants entitled to redundancy payments it will operate to the disadvantage of the (1) [First] Respondent which will have to pay those awards. If it transpires that the appeal is successful the (1) [First] Respondent will be indemnified for the payments it has made but it will have lost the use of that money for the period of the appeal. On the other hand if the Tribunal defers making a decision until the results of the appeals are known the Applicants will be denied their money. All parties agree those Applicants with qualifying periods of employment are likely to receive either a redundancy payment or its equivalent basic award. They may also be entitled to other sums in addition. If the Tribunal does not proceed to make an award interest cannot run for the benefit of the Applicants if the appeal proves unsuccessful and the Tribunal's decision stands. If the decisions are not made until 3-5 years from now, and there is no provision for interest, the Applicants will receive, in practical terms, a much reduced sum as they will be adversely affected by inflation." [emphasis added]

25. Insofar as interest is concerned that matter is to some extent resolved because the Appellants have indicated that should this matter be adjourned they give an undertaking to give interest from six weeks after say April if the Appellants' appeals subsequently fail. In other words, it is liable to make the payments which the Tribunal has, or will order that it should make.
26. In paragraph 11 the Tribunal states:

"Taking account of all these issues and balancing the competing interests of the parties the Tribunal unanimously concludes that it would be more unfair on the Applicants to adjourn these proceedings, until the appeals have been determined, than it will be unfair on the First Respondent now to proceed. It appreciates that if the appeals are successful the First Respondent will not be indemnified for the loss of use of its money in the meantime. However, the Tribunal concludes this is a natural consequence of its decision and is less unfair than depriving the Applicants of receiving payment now."

27. We have not been given a figure of average payments should the Respondents succeed. In the case of one person it was some £4,500, she having achieved some 23 years continuity of service. In other cases the figures are in the hundreds.
28. It is submitted on behalf of the Appellant that the Tribunal having initially decided to deal with the issue of TUPE as a preliminary issue, it would now be wrong to go to the next stage until the issue of liability has been resolved.
29. Apart from the issue of indemnity with which we have already dealt, the principal thrust of the Appellant's argument today was that the Tribunal had not properly taken into account the legal costs and management time which the Appellant will have to bear should this hearing be started tomorrow. To support that submission a document has come into existence called "Estimated costs of Appellant". Taking 331 Applicants and allowing half an hour for each Applicant with no cross-examination by the Appellant and 12 Applicants a day, the Appellant has determined that this hearing will not take the three days to which Mr Brown had agreed, but some 30 days or a 6-week hearing. For that hearing a junior assistant solicitor will be paid £110 per hour. Six times 30 times £110 comes to £19,800. Apparently it is necessary for that junior assistant to travel. The costs of travelling for that junior assistant for that 6-week hearing will be £6,600, we are told, at £110 an hour. Mr Damien Brown's clerk has asked for a brief fee in the region of £22,000 plus VAT and a daily refresher of £900 plus VAT. That comes to a total for a 6-week hearing of £48,600. That does not take into account, so the document states, "The 6-week Management and Human Resources time". Pessimistic to the end, the Appellant states that if it were to go for 8 weeks it would be £103,750 and if it went for 11 weeks it would be £137,500.
30. Against the background of those figures we thought it important to try and find out from Mr McMullen what would happen during this 6-weeks (or longer) period.
31. There are, as we understand it, two issues, the notice issue and the redundancy issue. It is going to be argued by the Appellant that, although the letter of 16 June refers to a 12 weeks' notice that letter did not have any contractual effect. It will be argued that the only notice to which the Applicants were entitled was the statutory notice. That is an issue of law about which there is a dispute as to how long it will take to resolve. We take the view that at the most that would be some half a day.
32. It was submitted that insofar as 10 to 15 of these Applicants are concerned a separate and highly complex issue arises. Apparently on 30 July 1999 the Appellant wrote to their staff advising them to report for work on the first day of the new school term. There was also, so we are told, a letter telling them to report on 2 August for work at the offices of the Council. A few of the staff understandably did that. It is now to be submitted by the Appellant that by doing that which they were instructed to do by the Appellant they were accepting that their employment had come to an end on 31 July. If that be right, so the Appellant argues, the issue of mitigation arises. We note that in the letter in response to the directions there is no reference to the kind of material that we are told by Miss Eady one would expect to find if an employer to meet the burden of proof on it decides to argue that the employee has not mitigated the loss. How long will that issue take? It would not be right for us to pass any judgment on the validity or otherwise of that argument. Mr McMullen suggested that it could not be resolved without a full understanding of repudiation and acceptance and that the Tribunal will have to consider a number of authorities. We take the view that whatever be the outcome it is not a matter that is going to occupy the Tribunal very long.
33. We turn then to the redundancy matters. We asked for details of a few of the Applicants to understand what the issues were. There are, no doubt, some disputes to resolve. In the case of 19 of the Applicants there is a jurisdictional issue apparently. We take as one example Mr Baker's clients. Of the 153 Applicants whom he represents the figures in the case of 51 are already agreed. In the case of 52 the figures are likely to be agreed once the issue of payment for the alleged notice period is determined one way or the other. In the other 53 cases they could be agreed easily.
34. Mr Baker gave us an example of one of his client's, Booth, where there was a clear mathematical error. In the case of another, Mr Baker had entered on the IT1 a figure as a result of information given to him by his client. That information now appears to be wrong and the figure can be easily changed. Miss Eady who has considerable experience of this kind of work tells me what normally happens in cases of this kind. Before the hearing everyone gets around a table and resolves the kind of mathematical issues which can arise in this kind of case. In a number of the cases the employer is saying that the employee is due more money than is being claimed. Again, that can easily happen because the records kept by the employer are sometimes better than the records kept by the employee.
35. We can see no reason why Counsel should be involved in the kind of mathematical calculations which has to be undertaken in this kind of case. The principles are clear, it is just a matter of getting the right dates and finding the answer. Although Mr McMullen referred to the rapier-like skills and advocacy of Mr Brown, we see on the material available to us little use for that undoubted talent. As far as the matters of law are concerned, we do not think they will take very long. We think the estimate of three days is a conservative estimate and that the nightmare scenario presented by the Appellant of weeks and weeks and weeks is one which has no merit at all.
36. Ultimately we have to examine the decision of the Tribunal and ask ourselves whether there is any error of law or whether or not they have reached a decision which no reasonable Tribunal could reach. We are unanimously of the view that they made no error of law and the decision was certainly one which a reasonable Tribunal could reach. It cannot be described as perverse and in those circumstances this appeal fails.