United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR JAMES BOYD (of Counsel) Instructed by: Employee Management Ltd Suite 8 Stone Cross Place Stone Cross lane North Lowton Warrington WA3 2SH
For the Respondents	MR MICHAEL UBEROI (of Counsel) Instructed by: Messrs Thompsons Solicitors 247 The Broadway Wimbledon London SW19 1SE


 


SUMMARY

PRACTICE AND PROCEDURE – Estoppel or abuse of process

Appeal by employer that an unofficial agreement with the GMB Union had been terminated by the employer contrary to the finding of the Employment Tribunal. Appeal dismissed. There was no perversity or disregard of evidence by the Tribunal. The decision was one the Tribunal were entitled to come to on the facts.


 


HIS HONOUR JUDGE BIRTLES

Introduction

1. This is an appeal from the judgment of an Employment Tribunal sitting at Southampton on 10 and 11 February 2010. The judgment was sent to the parties on 26 February 2010.
2. The Employment Tribunal decided that the Claimant, GMB, was recognised by the First Respondent (Roadchef Motorways Ltd) for the purposes of collective bargaining for the period 6 October 2008 up to and including 30 October 2008. The Employment Tribunal also gave permission to the First Respondent to amend its Response to add an argument that the GMB be estopped by conduct from asserting that an extant Partnership Agreement for collective bargaining existed at the material time. Although both decisions are under appeal Mr Boyd, who appeared for the Appellant did not really argue the second point. However for the sake of completeness we will deal with it in this judgment.
3. The Second Respondent before the Employment Tribunal and the Second Respondent here, Moto Hospitality Ltd, was represented at the Employment Tribunal but did not take any part in the proceedings. It did not appear here although by letter dated 17 June 2010 its solicitors, DLA Piper UK LLP, indicated that it did not oppose the Appellant's grounds of appeal but that it would not propose to be legally represented at the appeal hearing: EAT bundle page 89.

The material facts

4. On 11 March 2002 the GMB and Roadchef Ltd entered into an agreement ("the Partnership Agreement"): appeal bundle pages 91-101. The relevant provisions are as follows:

"3. RECOGNITION

3.1 The Company recognises the right of the Union as the sole body to represent and negotiate on behalf of its members who are employed by the Company.

3.2 The Company recognises that a consultative trade union, representing its members is conducive to a good working partnership. It will therefore support employees wishing to be a member of the union.

3.3 The Company will include an introduction to the union staff representative as part of a new staff members induction programme and will support new employees wishing to join the union or the site staff representative in seeking to enrol new employees as members.

3.4 The Company agrees to deduct union subscriptions from wages, subject to a written authorisation being given by the employee on the appropriate form.

3.5 The Company agrees that, on request from the Union reasonable facilities shall be given to the appropriate full-time official of the Union to address employees on the aims and advantages of trade union membership. Any such meeting should be held at a time and place to cause no disruption to the working of the service area and to be agreed by the service area Site Director. Such agreement shall not be unreasonably withheld.

--

7. CONSULTATIONS

The Company and the Union agree that the following matters shall be for consultation, however, the Union will not unreasonably withhold their agreement. In the event of disagreement no change shall be instituted until the procedure for Grievance (avoidance of disputes) has been followed.

7.1 Wages and all payments; sick pay; holiday; pension; health and safety; redundancies.

--

10. TERMINATION OF THE PARTNERSHIP AGREEMENT

This agreement may be terminated by either side giving six months notice in writing."

5. In 2007 an Israeli private venture capital company acquired all the share holding in the ultimate holding company of the First Respondent i.e. Roadchef Ltd.
6. In 2008 Roadchef Motorways Ltd, which was the operating company of the group of which it was a member, operated a number of motorway service areas in the UK. Owing to the economic downturn it was finding trading conditions difficult.
7. On 1 October 2007 a Mr Lockton had joined Roadchef Motorways Ltd as Human Resources Director. He remained in that position until 31 December 2009. At approximately the same time Mr Rix, a national officer of the GMB, assumed responsibility for the Union members employed by Roadchef Motorways Ltd.
8. Mr Rix knew of the Partnership Agreement and believed (wrongly as it so happens) that at the time it was entered into in 2002 Roadchef Ltd employed staff covered by the Partnership Agreement. Until late in the day he believed it constituted a legally binding agreement. He was wrong about that because of the effect of s179 of the Trade Union & Labour Relations (Consolidation) Act 1992. The Partnership Agreement does not contain a provision that the parties intend that the agreement shall be a legally enforceable contract: s179(1)(b)(2).
9. It was quite clear that Mr Lockton and Mr Rix did not have a particularly good working relationship. On 12 December 2007 Mr Lockton wrote to Mr Rix by a letter handed over at a meeting on the same day. The letter stated this:

"However, I wish to clarify the position regarding pay reviews and associated discussions with the GMB. As you are aware the Partnership Agreement between Roadchef and the GMB makes express reference to 'consultation' over matters such as wages and all payments, not 'negotiation'. Indeed I understand that Roadchef's previous practices in relation to pay reviews has involved a consultation exercise with the GMB but not formal pay negotiations. It is my view that the GMB is not recognised for collective bargaining on pay as you suggest in your letter, and, therefore, there is no statutory obligation on Roadchef to provide the information requested by you."

10. As the Employment Tribunal note in paragraph 33 of their judgment the Union and the Company did continue to talk about pay and following the meeting on 12 December 2007. The position can be summarised as follows: the Company had made an offer which was unacceptable; there was a discussion with the Union and the Company came back with a better offer which the Union deemed acceptable. Mr Lockton was hard put to explain why this process did not amount to a negotiation. In fact, he really could not do so.
11. Over the period April 2008 – September 2008 there were communications between Mr Lockton and Mr Rix about the Appellant introducing new security procedures because of theft.
12. On 20 June 2008 Mr Rix wrote to Mr Lockton about the 2008 pay claim, asking for dates for the negotiations to commence on that year's pay claim and also to discuss matters arising from last year's pay claim. That letter was followed by another letter dated 26 June 2008 from Mr Rix to Mr Lockton requesting further information.
13. On 4 July 2008 Mr Lockton wrote to Mr Rix as follows:

"I write further to your letters dated 20 June 2008 with reference to the 2008 pay review and the securing arrangements. Due to various people being away from the business at the moment, I am unable to confirm any dates for the Pay review meetings at this stage. However, a meeting can go ahead with yourself and the GMB stewards to discuss the security arrangements. I have invited to join us in the discussion …. Chief Operating Officer … Director of Loss Prevention"

and the meeting was suggested to take place on 17 July 2008.

14. On 31 July 2008 Mr Lockton wrote to Mr Rix as follows:

"I am looking forward to our meeting on 16 September regarding feedback on the process of the securing procedures in Roadchef. Moving forward, further to your letter dated 26 June 2008, I will be grateful if you would provide me with information as to which employees you consider to be covered by the ACAS Disclosure Code Practice 'Disclosure of Information to Trade Unions for Collective Bargaining Purposes' so I can give your request further consideration."

15. The meeting scheduled for 16 September was in fact cancelled by Mr Lockton.
16. We now turn to the facts found by the Tribunal leading up to the purported termination of the Partnership Agreement. The Employment Tribunal found that Mr Lockton considered the actions of the Union as being obstructive, not working to the Partnership Agreement, and putting the future financial liability of the Company in jeopardy. At paragraph 45 of their judgment the Employment Tribunal set out Mr Lockton's evidence-in-chief on this matter as follows:

"45. From this period on [August/September 2008] I perceived the motives of the Union to be at odds with the spirit of the Partnership Agreement, and began to question whether the continuance of the relationship was worthwhile, or indeed necessary. To this end, I sought legal Counsel and was advised that the Partnership Agreement was actually with a legal entity that did not, and still does not, employ anyone, i.e. Roadchef Ltd. Further, the TUPE implications relevant to the Delek transaction (that is the transaction referred to at paragraph 22 above) casts further doubt upon its status. Accordingly I was satisfied that the [Appellant] was not bound by any aspect of the Partnership Agreement, and so met with Mr Rix at the Union's head office in Hempstead on 6 October 2008 to inform him of this."

17. The Employment Tribunal requested to see the legal advice that Mr Lockton referred to in his evidence in chief. That was done. The advice appears at EAT bundle page 115-116. The Employment Tribunal analysed that advice in paragraphs 47-56 of its judgment and concluded that they did not accept Mr Lockton's evidence about the content of the legal advice. They said this:

"57. The process of obtaining advice and the nature of the advice which Mr Lockton gave evidence about is markedly different from what was contained in his witness statement.

58. The importance of that is in weighing up Mr Lockton's evidence as to who said what to whom and when, we have to bear in mind that what Mr Lockton said in evidence in chief was not sustained when cross examined on documentation put to him."

The meeting of 6 October 2008

18. This was a very brief meeting which Mr Lockton said lasted some two minutes. As the Tribunal noted there were two quite different versions of it. The Tribunal's judgment says this about that meeting:

"60. In his evidence in chief, he says that 'Accordingly, I was satisfied that Roadchef Motorways Ltd was not bound by any aspect of the Partnership Agreement, and so met with Mr Rix at the Union's head office in Hempstead on 6 October to inform him of this'. In answer to questions of the Tribunal, Mr Lockton said he told Mr Rix that the Partnership Agreement was with Roadchef Ltd and therefore the First Respondent was not bound by it. In answer to the Tribunal he agreed that he had not told, either then or subsequently, Mr Rix or anyone else in the Union that the First Respondent was not going to, from then on, recognise the Union. In re-examination, however, he said that he had made that clear.

61. Mr Rix's evidence is that he was told by Mr Lockton that Mr Lockton was going to speak to the staff direct over the head of the union, and there was no discussion about de-recognition of the Union at this meeting.

62. What was said by Mr Lockton that Mr Rix said in reply to whatever Mr Lockton said, was 'that's it', but that does not really take the matter any further forward because on Mr Rix's evidence that was it in relation to the negotiation over pay. There is no evidence that at this meeting Mr Rix accepted that he had been told the First Respondent were no longer recognising the GMB."

Subsequent documents and events

19. The Employment Tribunal go on to analyse subsequent documents and events which each party relied on to support their version of what was said at the meeting of 6 October: judgment paragraphs 64-72. The first item is a letter that is said to be dated 10 October 2008 written by Mr Lockton to Mr Rix. For the reasons given by the Employment Tribunal they find that that letter was not sent and certainly not received: Judgment paragraphs 64-66.
20. Second, on 17 October 2008, Mr Lockton issued a circular to employee members of the GMB: EAT bundle pages 103-107. That stated:

"I recently met with the GMB and advised them that they did not have a valid agreement with us in respect of negotiating terms and conditions of employment. I pointed out that the old agreement was with a legal entity that did not exist. It is, however, not surprising they do want to try and hold on to their position previously held with the old owners of Roadchef."

21. At paragraph 68, the Employment Tribunal make four specific criticisms of that statement and point out that it conflicts with the evidence they heard.
22. The Tribunal's conclusion about the credibility of Mr Lockton and Mr Rix is set out at paragraph 71 of their judgment:

"71. On balance, we prefer the evidence of Mr Rix as to what was said at the meeting. We find we cannot rely on Mr Lockton's evidence. He gave us what we considered to be misleading evidence as to the legal advice he said he had received and when pressed could not then identify the nature or source of subsequent advice as opposed to identifying the discussion process. He has differing accounts of what he did say at the meeting on 6 October 2008. [Para 68]."

23. The Tribunal then take note of a series of submissions made by Mr Boyd for the Appellant in relation to documentation. Since this is the main ground of appeal it is important to set out what the Tribunal said:

"72. Mr Boyd referred to and relied upon the following points:

72.1. A bulletin from GMB dated September 2008 but which should have been dated after 6 October contains a statement by Mr Rix: 'I had a brief meeting with Keith Lockton ... he advised that Roadchef now do not intend to deal with the GMB, and will deal with their employers (presumably employees?) direct, effectively ending a relationship.'"

(The bulletin appears at the EAT bundle page 102.)

"72.2. The counter to this from Mr Uberoi is that the bulletin is headed 'Pay and Conditions Campaign 2008' and also contains a statement:

'This is now the subject of potential action against the company, by the (Union).'

72.3. In the Union website there is a statement:

'In October 2008, Roadchef announced to their employees that they would not deal with their Trade Union, the GMB, any more to negotiate their pay and conditions.'

Indeed, Mr Rix confirmed that this reflected his understanding of the parties' relationship from 6 October 2008."

(The website entry is at the EAT bundle, page 109.)

"72.4. The website entry also contains the following entry: 'Our GMB Roadchef members are fighting back against the multi millionaire elite private equity company that owns Roadchef until the Union of their choice is back at the negotiating table and negotiating on behalf of our hard working members.'

"72.5. A press release from GMB of 14 October 2008 which Mr Boyd says refers in the past tense to the relationship between the Union and Roadchef (This is not accurate - The release says GMB enjoyed a long relationship with the original owners)."

(This press release is not within the EAT bundle.)

"72.6 A GMB Bulletin of November 2008 containing a form for individual grievance. The bulletin 9101 says: 'Many members have contacted our office in recent days in respect of the company stating that they will no longer deal with the GMB on pay.'

(The bulletin is at EAT bundle page 110.)

24. We note that the same bulletin contains a draft individual grievance letter for Pay 2008 and the relevant part says this:

"I wish to lodge a grievance in respect of my pay and conditions for 2008. My pay is normally negotiated by the GMB. The anniversary date for my pay was September 2008. You did not inform the GMB until late October that you were not prepared to deal with them on pay until after they had submitted a request for information in respect of this year's pay claim, and after the anniversary date had passed. It also transpires that you had no intention of dealing with the GMB on pay for quite some time, as the company has produced glossy publications and a campaign amongst other things. These cannot be established overnight."

25. The Employment Tribunal also record that Mr Boyd placed reliance on the Appellant's circular dated 17 October 2008 which we have already referred to. The Tribunal's comment was this:

"As we have observed [Para 71] we are not prepared to rely on Mr Lockton's evidence as to what he did or did not say."

Judgment paragraph 74.

26. Finally, the Employment Tribunal record that Mr Boyd made a submission that from 6 October 2008 there was no communication from the GMB to the Appellant until Mr Rix's letter of 12 December 2008 arriving claiming a breach of TUPE Regulations: Judgment paragraph 75.

Employment Tribunal discussion and conclusion

27. The Tribunal discussed the evidence in paragraphs 76-86 of its judgment and reach its conclusion in paragraph 87. The Tribunal say this:

"87. Having regard to the facts outlined above, we are satisfied that the First Respondent did not, if it had made such a decision to de-recognise, communicated effectively to the GMB either before 6 October 2008 or before 30 October 2008. For the sake of completeness we add that we are also satisfied that the GMB did not believe that it had been so de-recognised."

Estoppel and amendment

28. The Employment Tribunal then turned to the question of estoppel and the Appellant's proposed amendment to its form ET3. The Tribunal carefully consider the merits of that amendment and grant it: Judgment paragraphs 88-90. The Tribunal go on to consider the question of whether there has been an estoppel by the GMB which prevented it relying upon the Appellant's failure to consult the GMB over the TUPE transfer. After consideration the Employment Tribunal decided that there was no representation which could found an estoppel: Judgment paragraphs 91-99.

The Notice of Appeal

29. The Notice of Appeal appears at EAT bundle pages 70-78. It is supplemented by Mr Boyd's written and oral submissions.
30. The GMB's Answer is at EAT bundle pages 81-88. It is supplemented by Mr Uberoi's written and oral submissions. We are grateful to both counsel for their concise and well argued submissions.
31. We take each ground of appeal in turn.

Ground 1: burden of proof

32. Paragraph 11(a) of the Notice of Appeal argues that the Employment Tribunal erred in law in placing the burden of proof on the adequate communication of the termination of the informal arrangement upon the Appellant. It argues instead that the burden of proof should be neutral. Mr Boyd very properly abandoned that ground of appeal.

Ground 2: Mutuality

33. This ground of appeal is contained in paragraph 11(b) of the Notice of Appeal. Mr Boyd argues that although the Tribunal accept that the informal arrangement between the parties could be terminated unilaterally (Judgment paragraphs 46, 84, and 86) the Tribunal went on to conclude that because the GMB did not want to accept that there had been a de-recognition in or about October 2008 that somehow meant the arrangement continued (Judgment paragraph 81).
34. Mr Uberoi draws our attention to paragraphs 48, 84, and 85-86 of the Judgment. He submits that read properly those paragraphs make it quite clear that the Tribunal correctly directed itself that the informal arrangement could only be terminated unilaterally. We agree with Mr Uberoi. There is no error of law.

Ground 3: perversity and/or ignoring crucial evidence and/or failure to give sufficient reasons

35. These need to be taken separately but before doing so it is necessary for us to refer to certain factual matters which Mr Boyd based his submissions on. They are as follows:

(a) The GMB bulletin erroneously dated September 2008 and actually released in October 2008 following the meeting between Mr Lockton and Mr Rix on 6 October 2008: EAT bundle page 102 which we have set our earlier in this Judgment.

(b) The GMB website evidence following the meeting of 6 October 2008: EAT bundle page 109. We have set out the relevant part earlier in this Judgment.

(c) Mr Lockton's circular letter to employees dated 17 October 2008: EAT bundle pages 102-107. We have set out the relevant passages earlier in this Judgment.

(d) The fact that there was no communication at all between the parties from 6 October 2008 until 12 December 2008.

(e) The fact that the GMB bulletin of November 2008 contained a draft grievance pro-forma which Mr Boyd made it clear that the GMB accepted that it was no longer recognised in relation to pay nor the fact that there were pro-formas which showed that the informal arrangement had been terminated not only in relation to pay but other matters as well. The GMB bulletins containing the individual grievances are both dated November 2008 and are at EAT bundle pages 110-111. We have referred to them earlier in this Judgment.

(f) The fact that even if the Tribunal concluded that the Appellant had communicated that it would no longer consult with the GMB on matters of pay and conditions it did not do so in respect of any other matter covered by the written Partnership Agreement. There was no evidence that the Appellant consulted with the GMB on any other matter.

(g) The fact that Mr Lockton's assertion in his circular letter of 17 October 2008 that the GMB were trying to hold onto their position 'previously held' was not challenged by Mr Rix in writing.

The relevant law

36. As far as perversity is concerned the law is clear. The two best known statements of the law are both from a former President of the EAT. See Mummery J (as he then was) in Stewart v Cleveland Guest (Engineering) Ltd [1996] ICR 535 at 542 and Crofton v Yeboah [2002] IRLR 324 at paragraphs 92-95 per Mummery LJ.
37. So far as reasons are concerned it is sufficient for us to refer to Ucatt v Brain [1981] ICR 542 at 550 per Donaldson LJ (as he then was) and Meek v City of Birmingham City Council [1987] IRLR 250 at paragraph 8 per Bingham LJ (as he then was). It is not necessary to cite any case law on the issue of whether or not it is an error of law for an employment tribunal to ignore crucial evidence. The issue is what is crucial evidence and whether it has been ignored.
38. We accept Mr Uberoi's submission that standing back from the Judgment this Employment Tribunal was fully entitled to view the documents referred to by Mr Boyd as supporting Mr Rix's oral evidence rather than that of Mr Lockton. It is quite clear to us that the Employment Tribunal did not find Mr Lockton to be a credible witness. They preferred the evidence of Mr Rix. They were fully entitled to do so. That is critical because this case really turns upon what was said at the meeting between the two men on 6 October 2008. The Employment Tribunal accepted Mr Rix's evidence that there had not been a communication to him by Mr Lockton that the Appellant was terminating the informal arrangement between the parties. The Employment Tribunal made that quite clear: Judgment paragraphs 71 and 87.
39. Furthermore, there is no doubt whatsoever that the Employment Tribunal had Mr Boyd's submissions (which were very similar if not identical to those he made to us) in mind: Judgment paragraphs 63, 72-75. They answered those submissions and rejected them.
40. Taking each of the matters relied on by Mr Boyd in the order we have set them out above our conclusions are as follows:

(a) The GMB bulletin erroneously dated September 2008 and actually released in October 2008 (EAT bundle page 102) was considered by the Employment Tribunal in its Judgment at paragraph 72.1-72.2.

(b) The document on the GMB's website (EAT bundle page 109) was dealt with by the Employment Tribunal in its Judgment at paragraph 72.3-72.4.

(c) Mr Lockton's circular letter to employees (EAT bundle pages 104-107) was dealt with by the Employment Tribunal in its Judgment at paragraph 74.

(d) The fact that there was no communication between the parties from 6 October 2008 until 12 December 2008 was dealt with by the Tribunal in its Judgment at paragraph 75. The communication of 12 December 2008 was from Mr Rix: EAT bundle page 112. Mr Lockton did not reply to it. Mr Rix sent a repeat letter which was received by Mr Lockton on 15 January 2009. He replied on 19 January 2009: EAT bundle page 113.

(e) The draft grievance pro-forma forms and the relevant GMB circulars (EAT bundle pages 110-111) were considered (or at least one of them) were considered by the Employment Tribunal in its Judgment at paragraph 72.6.

(f) The issue of consultation on other issues was considered by the Employment Tribunal in its judgment at paragraphs 83 and 86.

(g) The Tribunal's construction of Mr Lockton's circular letter of 17 October 2008 was considered by them in its Judgment at paragraph 81.

Conclusion

41. We can find no evidence of either perversity and/or ignoring crucial evidence and/or a failure to provide sufficient reasons in this Employment Tribunal's judgment.
42. It seems to us that this Employment Tribunal gave careful consideration to all of the documents referred to by Mr Boyd. They were not contractual documents. Having found that Mr Lockton was not a credible witness as a result of the cross examination it was fully entitled to reject his interpretation of documents written either by him or by Mr Rix and accept the interpretation put forward by Mr Rix in evidence and Mr Uberoi in his closing submissions. The Employment Tribunal were fully entitled on the evidence put before them to conclude that the Appellant did not, if it had made a decision to de-recognise, communicate it effectively to the GMB either before 6 October 2008 or before 30 October 2008. Furthermore it was entitled to reach the conclusion that the GMB did not believe that it had been so de-recognised. Those are conclusions based squarely on the evidence.
43. For the avoidance of doubt we make it clear that there is no appeal against the decision of the Tribunal (by the GMB) to allow the amendment to the Appellant's form ET3 or (by the Appellant) of the Employment Tribunal's decision that there was no estoppel in this case.
44. For these reasons the appeal is dismissed.