United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR G CLAYTON (Solicitor) Messrs Graham Clayton Solicitors Hamilton House Mabledon Place London WC1H 9BD
For the Respondent	MR R DOWNEY (of Counsel) Instructed by: Kent County Council Legal & Secretariat Sessions House County Hall Maidstone Kent ME14 1XQ


 


HIS HONOUR JUDGE ANSELL

1. This is an appeal from an Employment Tribunal held at Ashford, Kent, who, following a Preliminary Hearing on 27 February 2002, unanimously decided that the named second Respondents, Kent County Council, should be dismissed from the proceedings.
2. The essential facts of the case were straightforward and not in dispute. From January 1984 to 31 August 2001 the Applicant was Deputy Head Teacher at Victoria Road Primary School in Ashford, Kent. That school is a community school with a scheme of financial delegation. As a result of certain events the Applicant felt that her professional status had been undermined and resigned by letter dated 12 February 2001, such resignation to take effect at the end of the summer term, 31 August 2001.
3. The Applicant commenced proceedings alleging that she was unfairly constructively dismissed contrary to sections 94 and 95 of the Employment Rights Act 1996, relying in particular on section 95 (1) (c); that is to say that she resigned in circumstances in which she was entitled to terminate her employment without notice by reason of the employer's conduct. She named the Governing Body of Victoria Road Primary School as the first Respondents and Kent County Council as the second. The Tribunal's decision involved a careful analysis of the various statutory provisions relating to the relationship between governing bodies and local education authorities, particularly as they affect unfair dismissal proceedings under Part X of the Employment Rights Act 1996 and in order to analyse the Tribunal's decision it is appropriate to set out those statutory provisions at the outset.
4. It is not disputed that at all material times the Appellant was an employee of the local education authority. The school governing body specifically lacked the power to enter into a contract of employment with the Appellant. Paragraph 3 (6) of Schedule 10 of the School Standards and Framework Act 1998 provides as follows:

"Where the school is a foundation, voluntary aided or foundation special school, the power to enter into contracts mentioned in sub-paragraph (2) (c) includes power to enter into contracts for the employment of teachers and other staff; but no such contracts may be entered into by the governing body of a community, voluntary controlled or community special school."

5. Further, by section 54 (1) of that Act, it provided that:

"Schedule 16 has effect in relation to the staffing of community, voluntary controlled and community special schools."

Schedule 16 dealt with the powers of the governing bodies in four main areas, namely the powers of appointment, suspension, discipline and dismissal of staff. Paragraph 25 of Schedule 16, under the heading of Dismissal etc, provides as follows:

25 (1) "Where the governing body determine that any person employed by the local education authority to work at the school should cease to work there, they shall notify the authority in writing of their determination and the reasons for it.

(2) If the person concerned is employed to work solely at the school (and he does not resign), the authority shall, before the end of the period of 14 days beginning with the date on which the notification under sub-paragraph (1) is given, either –

(a) give him such notice terminating his contract of employment with the authority as is required under that contract, or

(b) terminate that contract without notice if the circumstances are such that they are entitled to do so by reason of his conduct.

(3) If the person concerned is not employed to work solely at the school, the authority shall require him to cease to work at the school."

Paragraph 29 (1) provides that:

(1) "The local education authority shall not dismiss a person employed by them to work solely at the school except as provided by paragraph 25."

6. We should comment at this stage that, although these powers are referred to elsewhere as powers of dismissal, both sides concede that they should more accurately be defined as powers to determine that a teacher who is employed to work at the school managed by the governing body must cease to work there. The exercise of this power may, depending on the contractual position of the staff member, force a local education authority to dismiss.
7. Upon the first enactment of these measures in 1988 it was accepted by parliament that, although the relevant governing bodies were not to be employers in contractual terms they had to be accountable in law as if they were. There followed in 1989 the first The Education (Modification of Enactments Relating to Employment) Order 1989. The updated version of that order The Education (Modification of Enactments Relating to Employment) Order 1999 provides, so far is relevant, as follows:

"Interpretation

2 (1) In this Order -

"the 1996 Act" means the Employment Rights Act 1996;

"the 1998 Act" means the School Standards and Framework Act 1998;

"governing body" means the governing body of a school which is maintained by a local education authority;

"governing body having a right to a delegated budget" has the same meaning as in Part II of the 1998 Act;

"local education authority" means the local education authority by which the school is maintained; and

"school having a delegated budget" has the same meaning as in Part II of the 1998 Act.

(2) In this Order references to employment powers are references to the powers of appointment, suspension, discipline and dismissal of staff conferred by or under sections 54 and 57(1) to (3) of, and Schedule 16 and paragraph 27 of Schedule 17 to, the 1998 Act.

(3) In this Order a reference to an article is a reference to an article of this Order, a reference in an article to a paragraph is a reference to a paragraph of that article, and a reference to the Schedule is a reference to the Schedule to this Order.

General modifications of employment enactments

3 (1) In their application to governing bodies having a right to a delegated budget, the enactments set out in the Schedule shall have effect as if –

(a) any reference (however expressed) to an employer, a person by whom employment is offered, or a principal included a reference to the governing body acting in the exercise of their employment powers and as if that governing body had at all material times been such an employer, person or principal;

(b) in relation to the exercise of the governing body's employment powers, employment by the local education authority at a school were employment by the governing body of that school;

(c) references to employees were references to employees at the school in question;

(d) references to dismissal by an employer included references to dismissal by the local education authority following notification of a determination by a governing body under paragraph 25(1) of Schedule 16 to the 1998 Act; and

(e) references to trade unions recognised by an employer were references to trade unions recognised by the local education authority or the governing body.

(2) ………………………

(3) ………………………

Dismissals

4 Without prejudice to the generality of article 3, where an employee employed at a school having a delegated budget is dismissed by the local education authority following notification of such a determination as is mentioned in article 3(1)(d) –

(a) section 92 of the 1996 Act shall have effect as if the governing body had dismissed him and as if references to the employer's reasons for dismissing the employee were references to the reasons for which the governing body made their determination; and

(b) Part X of the 1996 Act shall have effect in relation to the dismissal as if the governing body had dismissed him, and the reason or principal reason for which the governing body did so had been the reason or principal reason for which they made their determination.

Trade disputes

5 ……………………….

Applications to Employment Tribunals

6 (1) Without prejudice to articles 3 and 4, and notwithstanding any provision in the Employment Tribunals Act 1996 and any regulations made under section 1(1) of that Act, this article applies in respect of any application to an employment tribunal, and any proceedings pursuant to such an application, in relation to which by virtue of article 3 or 4 a governing body are to be treated as if they were an employer, person by whom employment is offered, or a principal.

(2) The application shall be made, and the proceedings shall be carried on, against that governing body.

(3) Notwithstanding paragraph (2), any decision, declaration, order, recommendation or award made in the course of such proceedings except in so far as it requires reinstatement or re-engagement shall have effect as if made against the local education authority.

(4) Where any application is made against a governing body pursuant to paragraph (2) -

(a) the governing body shall notify the local education authority within 14 days of receiving notification thereof; and

(b) the local education authority shall, on written application to the employment tribunal, be entitled to be made an additional party to the proceedings and to take part in the proceedings accordingly.

SCHEDULE

Article 3

Sex Discrimination Act 1975

sections 6, 7, 9, 41 and 82 (1A)

Race Relations Act 1976

sections 4, 5, 7 and 32

Trade Union and Labour Relations (Consolidation) Act 1992

sections 146, 147, 152-154, 181-185

Disability Discrimination Act 1995

sections 4-6, 11, 12, 16, 55, 57 and 58

1996 Act

sections 66-68, 70, 71, 92, 93 and Part X"

8. At the end of the Statutory Instrument there is the usual explanatory note and the explanation for Article 6 is as follows:

"Article 6 provides that the governing body are to be the respondent to any application to an employment tribunal arising out of any of their actions taken in the exercise of their employment powers, or any action taken by the local education authority at their direction, but provides that any award of compensation or costs or other order (other than an order for reinstatement or re-engagement) is to be made against the local education authority. It further provides that the local education authority are to be notified by the governing body when an application is made and are to have the right to apply to be made an additional party and to appear at the hearing of any such application."

9. The submissions made by Mr Clayton, both to us and the Tribunal below, written and orally made with great clarity and force, run as follows. First he contends that an allegation of constructive dismissal, on the face of it, does not involve the governing body in the exercise of their employment powers, as defined in the 1999 Order and in particular cannot be caught by the phrase "dismissal" which is clearly defined as the dismissal procedure set out in Schedule 16. He contends that an allegation of constructive dismissal is essentially an allegation of a fundamental breach of the employment contract, under such that allegation must be made against the other party to that contract, i.e. the local authority who were the proper Respondents to the application alleging unfair dismissal. He further submits that even if he is wrong on this point that both the governing body and the local authority should be named as Respondents. He contends that the effect of the Modification Order is not to substitute the governing body as employers, for the purposes of proceedings, but to add them.
10. The Tribunal rejected both these arguments. In relation to the first point they appear to have decided the case on the basis that the term "dismissal" in Article 2 (2) of the 1999 Order can include constructive dismissal. Further, they interpreted Article 6 of the Order to mean that the sole Respondent to proceedings covered by the 1999 Order would be the governing body subject to local education authority applying to become additional party.
11. Before us Mr Downey for the local education authority put forward a different argument in relation to whether the governing body were the proper Respondents where the allegation was one of constructive dismissal. He contended that, by virtue of Article 3 (1) (a), the governing body became deemed employer for all proceedings referred to in those sections of the Employment Rights Act 1996, set out in the Schedule to the Order and in particular to Part X. We shall examine those submissions now in some more detail.
12. With regard to the first submission both Counsel agree that, by virtue of Article 6 (1) of the Order, the governing body can only become a Respondent to an application in relation to which, by virtue of Article 3 or 4, they are to be treated as if they were an employer. Mr Clayton then contends that, by Article 3, the governing body is only to be treated as if they were an employer if they are acting in the exercise of their employment powers, i.e. appointment, discipline, suspension or dismissal, as defined in Schedule 16 of the 1999 Act.
13. In support he referred us to Askew v Governing Body of Clifton Middle School & Others [1999] IRLR 708. Mr Askew had been employed as a teacher by the London Borough of Ealing at Clifton Middle School which, following a reorganisation, closed. The governing body required the local authority to terminate Mr Askew's employment, which they did on the grounds of redundancy. He applied to work at the new school, Clifton Primary School, but was not recommended for employment. His unfair dismissal complaint was upheld by the Employment Tribunal who said that there was no redundancy because the Middle School had not been closed but had been amalgamated with the former First School so as to form the Primary School. The Court of Appeal upheld the decision of the EAT in allowing an appeal against this finding on the basis the Mr Askew had been fairly dismissed by the governing body of the Middle School. The Court of Appeal also held that the EAT did not err in finding that the Applicant could not rely on the Transfer of Undertaking (Protection of Employment) Regulations 1981 in circumstances in which the school where he worked ceased to operate and a new school opened, because in order for the protection of TUPE or the EC Directive to apply there must be a contract between the person concerned and the transferor. The Court of Appeal held that teachers employed by local education authorities do not have an employment relationship with the governing body of the school in which they work. Mr Clayton therefore contends that since an allegation of constructive dismissal arises from alleged breach of that employment contract it is the local authority who should be party to any proceedings.
14. We find great force in these submissions. We cannot agree with the Tribunal's interpretation, set out in paragraph 28 of the decision, that dismissal in Article 2 (2):

"must be read in the same light as "dismissal" in section 95."

We are quite satisfied that all references to "dismissal" within the 1999 Order refer to dismissal pursuant to a paragraph 25 determination by the school – see Articles 2 (2), 3 (1) (d) and Article 4.

15. Mr Downey's argument before us is that, by virtue of Article 3 (1) (a), the governing body are deemed to be the employers for all provisions set out in Part 10 of the Employment Rights Act 1996. However, we cannot agree with his submissions on this point. The reference to governing body in Article 3 (1) (a) is qualified by the words "acting in the exercise of their employment powers". If Mr Downey's interpretation is correct there would be no need for these words and the Article could merely have stated that, for the purposes of Part 10 of the Employment Rights Act 1996, any reference to an employer includes a reference to the governing body. He further contends that the phrase can be interpreted as meaning governing body "deemed to be acting in the exercise of their employment powers". But again to us that puts an unnecessary interpretation and gloss on these words whose import is clear.
16. Mr Clayton's helpful review of the law makes it quite clear to us that the overall purpose was clearly to make the governing body responsible and liable for those actions which they took in pursuance or their statutory powers, as defined by Schedule 16, which include dismissal pursuant to the procedure set out in that procedure and thus prima facie this does not include constructive dismissal. It is our view that the proper Respondents to an allegation of constructive dismissal should initially be the local authority. It may be that on further examination of the facts of the claim it will be suggested that the constructive dismissal involved possible breaches of the governing body of one or more of their employment powers, in which case application could be made to join them as Respondents. Indeed, Mr Clayton was careful to point out that we were not concerned as to whether or not the governing body were properly joined as Respondents on the facts of this particular case. We are however quite satisfied it was wrong to dismiss the local authority as Respondents to these proceedings.
17. Assuming that we are wrong as regards this primary submission and that an allegation of constructive dismissal does fall within Article 6, should the governing body be made the only Respondents or should they be joined with the local authority Mr Downey contends that the wording of Article 6 makes it quite clear that the governing body are to be the sole Respondents. He points to the words "treated as if they were an employer" in Article 6 (1). He also reminds us of Article 6 (2) which provides for the application to be made and proceedings carried on against the governing body and in particular for the governing body to notify the local education authority within 14 days of receiving notification of any Employment Tribunal proceedings. He contends that this provision would be unnecessary if a local education authority had to be joined automatically as Respondents in all proceedings.
18. Mr Clayton relies principally on the wording of Article 3 (1) whereby any reference to an employer in the Employment Rights Act 1996 Part X is to include a reference to the governing body and he contends that the word "include" means that for Employment Rights Act purposes a governing body are to be treated as additional employers for the purpose of any proceedings rather than substituted employers. He also reminds us that in Article 6 (2) it does not state that the proceedings should be carried on against the governing body only. He therefore contends that it is the Applicant's choice whether simply to sue the governing body or to join in the local education authority and if the Applicant takes the former course then the provisions of Article 6 (4) would take effect with regard to notification to the local authority.
19. We accept the Respondents' submissions on this point and in particular accept that the language used in Article 6 is one of exclusivity rather than inclusivity, in other words that the governing body are to be the sole Respondents to Tribunal proceedings with the option to the local authority to be joined in proceedings, rather than the Applicant having the choice whether to claim against the governing body alone, alternatively to include the local authority. Insofar as there may be any conflict between the language of Article 3 (1) and Article (6) we are of the view that the language of Article 6 must prevail since it is that Article which deals expressly with the issue of who is to be a Respondent to Employment Tribunal proceedings.
20. Finally, we would add that the explanatory note to Article 6, to which we have made reference above, would appear to support our interpretation of these provisions. The note dealing with Article 6 refers to "the governing body are to be the Respondent to any application to an Employment Tribunal arising out of their actions taken in the exercise of their employment powers," rather than simply referring to any actions as employers. For us the phrase "taken in the exercise of their employment powers" defines what actions will render the governing body liable to be made Respondents. Further, the scope of the note clearly envisages that the only Respondent initially will be the governing body with the requirement to notify the local authority once application has been made.
21. Accordingly we would allow this appeal for the reasons that we have stated and order that the local authority be reinstated as Respondents to the application still before the Employment Tribunal.