United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR JONATHAN WALTERS (of Counsel) Instructed by: Neath Port Talbot County Borough Council Legal Services Civic Centre Port Talbot West Glamorgan SA13 1PJ
For the Respondent	MR PATRICK GREEN (of Counsel) (DIRECT ACCESS)


 


SUMMARY

UNFAIR DISMISSAL

JURISDICTIONAL POINTS: Worker, employee or neither

Whether liability for unfair dismissal of a teacher is transferred to LEA from defunct school Governing Body or whether LEA is directly liable to teacher for unfair dismissal.

Answer: the former.


 


HIS HONOUR JUDGE PETER CLARK

1. The live issue in this appeal is whether a Local Education Authority (LEA) is directly liable as employer to a teacher for potentially unfairly dismissing her, where the school at which she worked is closed before termination of her employment, or whether liability for any unfair dismissal is transferred to the LEA from the Governing Body (GB) of the defunct school. The distinction is potentially significant.
2. The point arises in this case, which is proceeding in the Cardiff Employment Tribunal between Mrs Jones, Claimant and (1) Governing Body of Abergwynfi Infants School and (2) Neath Port Talbot County Borough Council (the LEA), Respondents, in the following circumstances.

Background

3. The Claimant has worked as a teacher since 1983. At all relevant times she was deputy head of the Infants School. In 2005 the Second Respondent LEA put forward a proposal to build a new primary school which would replace both infant and junior schools in the area. Following consultation the new school was scheduled to open in April 2009.
4. The consequence, in staffing terms, was that although teachers in the old school would simply transfer to the new school, head and deputy head teachers in the old school were required, under reg. 10(8) of the Staffing and Maintained Schools (Wales) Regulations 2006 (the 2006 Regulations) to apply for posts in the new school in a publicly advertised competition.
5. The Claimant applied unsuccessfully for the post of deputy head in the new school and by letter from the LEA dated 19 January 2009 she was given notice of termination of employment by reason of redundancy to take effect on 19 April 2009. Following representations from her trade union the LEA accepted that the Claimant had been given insufficient notice and by letter dated 23 March the effective date of termination (EDT) was extended to 30 April 2009.
6. On 19 April the infants school closed. The new school, Pen Afan Primary School, opened on 20 April 2009.
7. By a Form ET1 the Claimant complained of unfair dismissal (only) against both Respondents. By their response each Respondent contended that the Claimant had no claim against them. They sought a PHR (pre-hearing review) to determine whether the claim against both Respondents should be struck out as having no reasonable prospect of success under rule 18(7)(b) of the Employment Tribunal Rules 2004.
8. That preliminary issue was taken at a hearing before Employment Judge Cadney, sitting alone on 26 November 2009. By an Order with reasons promulgated on 12 January 2010 that Judge dismissed both strike-out applications, ruling that the claim proceed to a full merits hearing against both Respondents. I understand that such hearing has been listed for 14-15 June 2010.

The Appeal

9. Against Judge Cadney's order both Respondents appealed. I directed, on paper, that the appeal be set down for an expedited full hearing. The matter came back to me for hearing on 19 March.
10. By her Respondent's Answer to the appeal, settled by Mr Patrick Green, who did not appear below, the Claimant relied on the reasoning of Judge Cadney and raised an alternative basis for his decision, namely that the Claimant's employment had been transferred to the LEA under the TUPE Regulations 2006. That is a difficult argument for the Claimant in light of the Court of Appeal decision in Askew v Governing Board of Clifton Middle School [1999] IRLR 708. In the event Mr Green did not pursue that argument before me.
11. However, shortly before the hearing Mr Green provided his skeleton argument to the Respondents and to this Tribunal which raised, among other arguments, a new and different point, not taken below. Whilst conceding that, since it no longer exists, the GB is not a proper Respondent to the claim, he there contended that by virtue of para. 7 of Schedule 22 to the Schools Standards and Framework Act 1988 (the 1988 Act), the effect of dissolving the GB when the infants school closed was to transfer all rights and liabilities (including rights and liabilities in relation to staff) to the LEA (absent a direction by the LEA prior to dissolution that such rights and liabilities vest in one or more other Governing Bodies; not this case).
12. Having considered the contents of Mr Green's skeleton argument, the Respondents' solicitor wrote an open letter to the Claimant's representative, Ms Watson, copied to the Employment Appeal Tribunal, inviting settlement of the appeal on terms that (a) the appeal by the GB be allowed and (b) the case proceed against the LEA, on the basis only that it is responsible for such rights and liabilities of the old GB as subsisted at the date of dissolution in accordance with para. 7 of Schedule 22 to the 1988 Act to which Mr Green referred, notwithstanding that the point had not been taken below. I interpose that before me Mr Walters very properly took no objection to this new point being raised by Mr Green. It required no further evidence and is a potential 'knock-out point' of the type envisaged by Brooke LJ in Glennie v Independent Magazines (UK) Ltd [1999] IRLR 719. For an example of such a new point being permitted for the first time in the Court of Appeal, see Aparau v Iceland Frozen Foods plc (No. 2) [2000] IRLR 196, of which Mr Green has reminded me and, more recently, the new points taken for the first time, first by the Claimant in the EAT and then by the Respondent in the Court of Appeal in Dunscombe and Others & Fletcher v Secretary of State for Children, Schools and Families [2009] EWCA Civ 1355.
13. That proposal appeared to resolve the appeal and I invited the parties to lodge a draft consent order for my consideration, initially on paper, under the procedure set out in para. 15 of the Employment Appeal Tribunal Practice Direction.
14. However, no consent order was forthcoming. The issue that remained was the one which I identified at the beginning of this judgment; was the LEA fixed with direct (as the Claimant contends) or transferred (as the LEA argues) liability for unfair dismissal, if found at the merits hearing? I interpose that, as I understand it, the Claimant now seeks permission to amend her claim form to add a complaint of unlawful sex discrimination. That application is opposed and falls to be determined by the Employment Tribunal, applying Selkent principles. Whether or not permission is eventually granted does not, however, seem to me to affect the decision which I am required to make in this appeal.

Discussion

15. I agree with counsel that the claim against the dissolved GB is not arguable and the appeal will be allowed to the extent that that claim is dismissed.
16. On the extant issue, direct or transferred liability of the LEA, Judge Cadney ruled at paragraph 13 of his reasons, that in the absence of notification of a determination by the GB under Reg. 17(1) of the [2006] Staffing Regulations, Articles 3, 4 and 6 of the Education (Modification of Enactments Relating to Employment)(Wales) Order 2006 (the 2006 Order) do not apply and the Claimant is bound to bring her claim (directly) against the LEA, who is her employer (by virtue of s35(2) of the Education Act 2002).
17. It is common ground that s35(2) of the 2002 Act applied to the Claimant's employment. It provides:

"Any teacher … who is appointed to work under a contract of employment at a school to which this section applies." [it does apply to the Infants School under s35(1)(d).]

18. Under the 2006 Order:

By Article 3(1)

"In their application to a Governing Body having the right to a delegated budget [as in this case], the enactments set out in the Schedule [which include the Employment Rights Act 1996 (ERA) and, I should add the Sex Discrimination Act 1975 (SDA)] have effect on as if –

(a) any reference to an employer (however expressed) included a reference to the Governing Body acting in the exercise of its employment powers and if that Governing Body had at all material times been such an employer.

(b) in relation to the exercise of the Governing Body's employment powers, employment by the LEA at a school were employment by the Governing Body of the school,

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

(d) references to dismissal included references to dismissal by the authority following notification of a determination by a Governing Body under reg. 17(1) of the 2006 Regs.

By Article 4

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

…

(b) Part X [protection against unfair dismissal] of the 1996 Act [ERA] has effect in relation to the dismissal as if the Governing Body had dismissed [the teacher] and the reason or principal reason for which the Governing Body did so had been the reason or principal reason for which it made its determination."

And by Article 6:

"(1) Without prejudice to articles 3 and 4, and despite 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 is to be treated as if it were an employer (however expressed).

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

(3) Despite 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 has effect as if made against the authority.

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

(a) the governing body must notify the authority within 14 days of receiving notification; and

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

19. Regulation 17 of the 2006 Regulations, entitled 'Dismissal of Staff' provides; so far as is material:

"(1) … where the Governing Body determines that any person employed or engaged by the LEA to work at the school should cease to work there, it must notify the authority in writing of its determination and the reasons for it.

(2) If the [teacher] is employed or engaged by the LEA to work solely at the school … the LEA must, before the end of the period of 14 days beginning with the date on which the notification under para (1) is given…

(a) give … her such notice terminating … her contract with the LEA as is required under that contract."

20. Regulation 17(6) requires the GB to give the teacher an opportunity to make representations before it makes a determination under (1) above and reg 17(7) requires the Governing Body to allow the teacher a right of appeal before notifying the LEA of its determination. By reg. 17(11), the LEA must not dismiss a teacher except as provided for in paras. (1) and (2) of reg. 17.
21. Within that statutory framework Mr Green submits that where the GB fails to take the steps required by reg. 17 of the 2006 Regulations; here there was, he asserts, no determination by the GB nor notification to the LEA under reg. 17(1); nor was the Claimant given an opportunity to make representations under reg. 17(6), nor given an opportunity to appeal to a panel of Governors under reg. 17(7), then the LEA had no power to dismiss the Claimant by virtue of reg. 17(11). It follows that the purported dismissal by the LEA in the circumstances of this case can only be by the LEA as direct employer, not following a determination by the GB.
22. That result also follows, argues Mr Green, from the scheme of the 2006 Order.
23. The deeming provisions in Article 3, whereby the Employment Rights Act 1996 (ERA) applies (see Article 4(b)) as if the dismissal were by the Governing Body do not arise unless there is a determination by the Governing Body under reg. 17(1) of the 2006 Regulations; see reg. 3(1)(d).
24. Mr Walters challenges that analysis, contending that the issue as to direct or transferred liability is resolved in his favour by the Court of Appeal decision in Kent C.C. v Green [2004] EWCA Civ 11.

Kent C.C. v Green

25. Green was concerned with the application of the 1988 Act and the predecessor, in identical terms, to the 2006 Order with which I am concerned, that is the Education, etc. Order 1999.
26. The facts were that the Claimant, a teacher employed as deputy head, at a community school to which the 1988 Act applied, complained to an employment tribunal of constructive unfair dismissal. She named as Respondents both the GB and the LEA. The issue at a preliminary hearing before the employment tribunal was whether the LEA was a proper respondent to the claim. The employment tribunal held that it was not but the Employment Appeal Tribunal disagreed. On further appeal the Court of Appeal restored the employment tribunal decision.
27. The Court rejected the Claimant's contention that a distinction fell to be drawn between an actual dismissal under s. 95(1)(a) ERA and a constructive dismissal under s. 95(10(c). Both depend on the employer's conduct as employer (per Pill LJ. para. 22); in that case the conduct of the GB, which was liable under the ERA to the claimant as 'deemed' employer in accordance with the, then 1999 Order. Thus, any claim in the Employment Tribunal must be made against the GB, even if liability to meet the claim then transfers to the LEA (see para. 13).
28. Mr Green submits that Green is a case materially different on its facts from the present case. There was no dismissal by the LEA; the complaint was directed solely towards the GB (which remained in existence) in acquiring a deputy head teacher seconded from another school to work alongside the Claimant, causing her to allege that she was being 'sidelined', thus undermining the necessary trust and confidence which, I infer, formed the basis of her constructive dismissal claim.
29. I acknowledge the factual distinctions drawn by Mr Green but agree with Mr Walters that the approach of the Court of Appeal in Green points the way in the present case.
30. My analysis is as follows. No proper distinction should be drawn between an actual or constructive dismissal (see Green). In this case there was a dismissal by the LEA; the GB has no power of dismissal. At the 19 January 2009, when notice of termination was given, the GB was the Claimant's 'deemed' employer under Art. 3(1)(a) of the 2006 Order. Art. 3(1)(d) does not assist Mr Green's argument because, whilst dismissal by an employer includes references to a dismissal by the LEA in accordance with Reg. 17(1) of the 2006 Regulations it is not limited to dismissals complying with the reg. 17 regime. If the GB fails so to comply that may give rise to a finding of unfair dismissal, either under s. 98A(1)ERA, insofar as it is in force, or under ordinary s.98 principles.
31. Applying Art. 6(2) I am satisfied that the claim in this case, as at the 19 January 2009, lay against the GB. It will be recalled that s.111(4)(a) ERA permits an employee to present a complaint of unfair dismissal against his employer after notice is given but before it expires.
32. The consequence of the GB being dissolved when the infants school was closed on 19 April was that the liability, if any, of the GB to the Claimant transferred to the LEA under para. 7 of Schedule 22 to the 1988 Act, as Mr Green submitted in his skeleton argument.
33. The significance, as the parties appreciate, is that the task for the Employment Tribunal at the merits hearing is to focus on the position of the GB in judging (a) whether the Claimant was unfairly dismissed and (b) if so, to what remedy she is entitled. That result is consistent, in my judgment, with this feature of Art 6(2) of the 2006 order; that the remedy of reinstatement or re-engagement ordered against the GB is not enforceable against the LEA. It may also affect the Employment Tribunal's approach to the Polkey question, should it arise, as was discussed in argument.
34. It follows, in my judgment, that the LEA is correct in submitting that at the full merits hearing the Employment Tribunal will treat this case as one of unfair dismissal brought against the GB, whose liability, if any, transfers to the LEA following dissolution of the GB.
35. Finally, having taken time to reflect on this case, I hope that I may be permitted to add a further observation of my own which was not the subject of full argument before me and therefore does not form a necessary part of my reasoning.
36. During the course of argument I raised with Counsel the question as to why Parliament may have thought it necessary to produce what May LJ described in Green (para. 48) as 'this convoluted legislation' which results in teachers having two employers for different purposes. The answer, which seems to me to be correct, was that where a school has a delegated budget, out of which staff are employed, it should be the Governing Board responsible for spending that budget which should also be responsible for 'hiring and firing' staff, subject to the LEA acting as a 'backstop' to satisfy any liability which the Governing Board is unable to meet.
37. It also occurs to me, on reflection, that the concept of dual employers is not new. It is well-established in the law of tort that vicarious liability for the negligence of a workman to a third party may lie with his general employer or a temporary employer by whom the workman is employed pro hac vice. Classically, the case of a crane and driver hired out by the general employer to his customer: see Mersey Docks v Coggins [1947] AC 12, where the House of Lords held that the general employer and not the hirer was liable to the injured claimant; or, on the other side of the line, the case of the doorman provided to a night club by a security company; Hawley v Luminar Leisure plc [2006] IRLR 817 (CA).

Disposal

38. This appeal is allowed to the extent that;

(1) the GB is dismissed from the claim and

(2) liability for the Claimant's unfair dismissal and consequential remedy, if any, is transferred from the Governing Body to the LEA under paragraph 7 of Schedule 22 to the 1998 Act.

39. The case will return to the Cardiff Employment Tribunal for a full merits hearing on the above basis.