Ashbourne Solicitors

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European Commission v Luxembourg (Case C-333/03)

European Communities – Community institutions – Commission – Failure of member state to fulfil obligations – Failure to transpose directive – Application for declaration – Council Directive (EC) 98/50.

The Court ruled:

It would be declared that, by failing to adopt the laws, regulations and administrative provisions necessary to comply with Council Directive (EC) 98/50, Luxembourg had failed to fulfil its obligations under that directive.

The question whether a member state had failed to fulfil its obligations had to be determined by reference to the situation prevailing in the member state at the end of the prescribed period.

Paterson and others v Islington London Borough Council and others

Discrimination – Sex discrimination – Employment – Equal pay – Comparator – Respondent establishing defence to applicants’ claim for equal contractual rights – Correct identification of comparator’s role – Equal Pay Act 1970, s 1(2)(b), 1(3).

The appeal would be dismissed and the cross-appeal would be allowed.

(a) The majority of the appeal tribunal were of the view that the tribunal had been in error in its approach to the s 1(2)(b) issue.

In the majority view, the correct question for the tribunal was: ‘did the method the panel adopted for the evaluation of the assistant caretaker post involve a material departure from the scheme such that it could not be said that the evaluation was carried out under the scheme?’ The majority were of the view that that question admitted only the answer Yes.

(b) The applicants’ submissions that the decisions in respect of s 1(3) were either perverse, insufficiently reasoned or were the fruit of a misdirection were rejected.

It was clear from the tribunal’s full and careful reasons that they were well-aware of both sides of the objective justification argument. Their findings, however, were that the authority had discharged the burden of providing objective justification. The findings were ones which the tribunal were entitled to make.

Section 1(2) of the Equal Pay Act 1970 provides: ‘An equality clause is a provision which relates to terms (whether concerned with pay or not) of a contract under which a woman is employed (the “woman’s contract”), and has the effect that—(b) where the woman is employed on work rated as equivalent with that of a man in the same employment—(i) if (apart from the equality clause) any term of the woman’s contract determined by the rating of the work is or becomes less favourable to the woman than a term of a similar kind in the contract under which that man is employed, that term of the woman’s contract shall be treated as so modified as not to be less favourable, and (ii) if (apart from the equality clause) at any time the woman’s contract does not include a term corresponding to a term benefiting that man included in the contract under which he is employed and determined by the rating of the work, the woman’s contract shall be treated as including such a term’. Section 1(3) provides: ‘An equality clause shall not operate in relation to a variation between the woman’s contract and the man’s contract if the employer proves that the variation is genuinely due to a material factor which is not the difference of sex and that factor—(a) in the case of an equality clause falling within subsection (2)(a) or (b) above, must be a material difference between the woman’s case and the man’s; and (b) in the case of an equality clause falling within subsection (2)(c) above, may be such a material difference’.

Gaston v Birmingham City Council and another

Employment – Transfer of undertakings – Relevant transfer – Dismissal – Employment tribunal finding complainant not assigned to undertaking transferred – Employment tribunal finding jurisdiction to hear unfair dismissal claim against first respondent only – Correctness of decision.

The appeal would be dismissed.

The tribunal had been entitled to come to the conclusion that it had.

The tribunal had found as a fact that, neither in his capacity as a non-practising plumber, nor in his capacity as a trade union official, had the complainant been engaged in activities which allocated him to the part of the undertaking transferred, and there had been no evidence upon which the tribunal could have reached any different conclusion. In those circumstances, the tribunal’s decision could not be challenged.

Roper and others v Solectron Scotland Ltd

Employment – Transfer of undertakings – Dismissal – Redundancy – Variation of previous redundancy terms by custom and practice – Validity of compromise agreements.

The appeal tribunal ruled:

(1) The employer had failed to make out its contentions in relation to custom and practice.

In the circumstances of the instant case there was no basis for finding that either a new custom and practice had come into existence or that the employees could be taken to have accepted that new terms had replaced the BT terms by virtue of their continuing to work for the employer in the knowledge that different redundancy terms had been offered.

(2) In the circumstances of the instant case reg 12 did not apply.

Although the redundancies could be said to have arisen solely because of the transfer the same could not be said of the compromise agreements which were unconnected with the transfer. Accordingly the agreements were enforceable and the matter would be remitted to a fresh tribunal for a rehearing as to whether it was understood that the agreements were not to prejudice any rights the employees might have to the BT terms.

Regulation 12 provides: ‘Any provision of any agreement (whether a contract of employment or not) shall be void in so far as it purports to exclude or limit the operation of regulations 5, 8 or 10 above or to preclude any person from presenting a complaint to an employment tribunal under regulation 11 above.’

T&G (Scotland) and another v Qinetiq and another

European Communities – Application of Community law in national courts – Direct effect of Community law – Directive – Reliance on directive as against employer – Enforcement of provision before national courts – Council Directive (EC) 2001/23.

Council Directive (EC) 2001/23 provides ‘1. The transferor and transferee shall be required to inform the representatives of their respective employees affected by the transfer of … any measures envisaged in relation to the employees. The transferor must give such information to the representatives of his employees in good time, before the transfer is carried out…’

The appeals would be dismissed.

The trade unions’ complaints had to be dismissed, albeit on a different basis from that of the tribunal’s decision.

In the instant case, the most important consideration had been the issue of ‘emanation of the State’ with regard to the enforcement of a council directive directly against an individual entity within the United Kingdom. The law required there to be the existence of special powers in the hands of the relevant entity against whom the directive was being enforced to admit such enforcement and such were not to be found in the instant case. In those circumstances, the assumption which the tribunal had made in that respect was erroneous in law, and the trade unions’ complaints had to be dismissed on the basis that the directive could not be enforced against the first respondent since it was not an emanation of the State.

Foster v British Gas plc [1991] 2 All ER 705 applied.

United Guarding Services Ltd v St James Security Group Ltd and another

Employment – Transfer of undertakings – Continuity of employment – Premises at which employee employed to work – Tribunal finding transfer of undertakings – Correctness of decision.

The appeal would be allowed.

The tribunal had fallen into error.

Applying settled principles, the tribunal should have asked whether the employee had been employed to work at the premises immediately prior to the transfer. If it had applied that test, the answer would have been in the negative. It followed that there had been no transfer to the appellant.

Fairhurst Ward Abbotts Ltd v Botes Building Ltd [2004] All ER (D) 225 (Feb) applied.

Eastmond and others v Ladies’ Health & Fitness Club Ltd

Employment – Transfer of undertakings – Relevant transfer – Unfair dismissal – Employment tribunal finding that appellant company liable for terminating employment of applicants – Correctness of decision.

The appeal by LHFC failed in so far as there was a challenge to there being a valid transfer to it.

There was no need for a contractual relationship between the transferor (OL Ltd) and the transferee (LHFC), and there was none in the instant case. But it was plain, looked at from the point of view of the club business and the employees (those who were employed by the club at all material times) that there was initially a transfer from the Ladies’ Own companies to OL Ltd; that transfer was effective for only a short time, until the licence was terminated; and there was then a transfer on or back from OL Ltd to LHFC.

Dowling v Ilic Haulage and another

Employment – Transfer of undertakings – Continuation of employment – Liability of transferee under a continuation order – Transfer of Undertakings (Protection of Employment) Regulations Act 1981, reg 5(1), SI 1981/1764 – Trade Union and Labour Relations (Consolidation) Act 1992, ss 152, 163, 164.

The employee appealed against that decision on the ground, inter alia, that the policy and purpose of the Council Directive EC 23/2001 (on the approximation of the laws of the member states relating to the safeguarding of employees’ rights in the event of transfer of undertakings etc), was dedicated to exactly that, and the definition of an employee whose rights were thus by the Directive to be safeguarded, should not be narrowly construed.

The appeal would be dismissed.

Liability under a continuation order pursuant to s 164 of the Act did not transfer to a transferee under TUPE.

Whereas the impact of TUPE on a contract of employment should be construed favourably to an employee, and its terms purposively interpreted so as to safeguard an employee’s rights, those conceptual requirements did not imply if, as in the instant case, absent a voluntary order under s 163 of the Act, the employee became an ex-employee, but with financial protection. The financial obligation of the transferor to such an ex-employee was not within reg 5(1) of TUPE, however purposively interpreted, for there was no continuing contract of employment after the determination and, in any event, even if it was a contract of employment, it was not a contract which ‘would otherwise have been terminated by the transfer’.

Atos Origin UK Ltd v Amicus (Amps) and others

Employment – Transfer of undertakings – Relevant transfer – Identity of entity – Tribunal concluding entity not keeping identity as minority of workforce transferred – Correctness of decision.

The tribunal had fallen into error.

The mere fact that an undertaking had reduced its size so as to require fewer people to undertake the work was a factor to be taken into consideration in the overall assessment of whether the entity had retained its identity. However, it was not the only determinative factor. In the instant case, the tribunal had failed to consider that factor by reference to the question of whether the AO Ltd staff who were deemed to have transferred constituted a major part of the workforce. The matter would, in that regard, be remitted to the tribunal for reconsideration.

GMB and others v Susie Radin Ltd

Industrial relations – Redundancy – Failure to consult trade union – Protective award against employer – Guidance on making of protective award – Trade Union and Labour Relations (Consolidation) Act 1992, ss 188, 189.

Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 Act provided: ‘(1) Where an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less, the employer shall consult about the dismissals all the persons who are appropriate representatives of any of the employees who may be affected by the proposed dismissals … (1A) The consultation shall begin in good time and in any event—(a) where the employer is proposing to dismiss 100 or more employees as mentioned in subsection (1), at least 90 days …’

Section 189 of the Trade Union and Labour Relations (Consolidation) Act 1992 Act provided: ‘(1) Where an employer has failed to comply with a requirement of section 188 … , a complaint may be presented to an employment tribunal on that ground … ; (2) If the tribunal finds the complaint well founded it shall make a declaration to that effect and may also make a protective award’… ; (4) The protected period— … (b) is of such length as the tribunal determines to be just and equitable in all the circumstances having regard to the seriousness of the employer’s default in complying with any requirement of section 188; but shall not exceed 90 days …’

The defendant employer had carried on business designing and manufacturing clothing at its factory where 108 employees worked. There was a recognition agreement with the claimant trade union, and W was the trade union’s officer responsible for the employees. In March 2000, W received a letter from the employer rejecting a pay claim and stating that keeping the factory open was far from guaranteed. On 6 April 2000, the employer sent letters to the employees informing them of impending redundancies. Following an acrimonious meeting with W on 19 April 2000, the employer sent letters of dismissal to all the employees. On 13 June, W and a trade union shop steward met with representatives of the employer to discuss possibilities to save the factory. There was no further contact between the trade union and the employer and the factory closed on 14 July 2000.

The trade union promptly presented an originating application to the employment tribunal seeking a protective award on behalf of its members, pursuant to s 189 of the Trade Unions and Labour Relations (Consolidation) Act 1992. The employer denied any entitlement to a protective award. The tribunal found that the employer had been proposing closure of the factory and the redundancy of the workforce, and that at the meeting with W on 19 April, the employer had provided none of the information or consultation required by s 188 of the 1992 Act and that, on 13 June, the employer had merely been going through the motions of what it considered to be consultation. The tribunal therefore concluded that the application for a protective award was well founded and that the trade union was entitled to a declaration to that effect. In determining the appropriate period for a protective award, the tribunal considered that the employer had failed completely to comply with the requirement of 90 days’ consultation, pursuant to s 188 of the 1992 Act, and that that was so serious that the protective award period should be the maximum 90 days. The employer appealed against that decision. The Employment Appeal Tribunal upheld the tribunal’s award, having found that it was one which could properly be considered just and equitable in the circumstances. The employer appealed against that decision.

The appeal would be dismissed.

The employment tribunal had been entitled to come to the decision that it had in making a protective award for 90 days.

Employment tribunals, in deciding in the exercise of their discretion whether to make a protective award and for what period should have a number of matters in mind. First, the purpose of the award was to provide a sanction for breach by the employer of the obligations in s 188: it was not to compensate the employees for loss which they had suffered in consequence of the breach. Secondly, the tribunal had a wide discretion to do what was just and equitable in all the circumstances, but the focus should be on the seriousness of the employer’s default. Thirdly, the default might vary in seriousness from the technical to a complete failure to provide any of the required information and to consult. Fourthly, the deliberateness of the failure might be relevant, as might the availability to the employer of legal advice about his obligations under s 188 of the 1992 Act. Finally, how the tribunal assessed the length of the protected period was a matter for the tribunal, but a proper approach in a case where there had been no consultation was to start with the maximum period and reduce it only if there were mitigating circumstances justifying a reduction to an extent which the tribunal considered appropriate. In the light of that guidance, in the instant case it was impossible to say that, given the tribunal’s finding that no consultation at all had taken place, the decision to make a protective award of the maximum period had been perverse.

Decision of Employment Appeal Tribunal [2003] All ER (D) 192 (Sep) affirmed.

Fairhurst Ward Abbotts Ltd v Botes Building Ltd and others

Employment – Transfer of undertakings – Continuity of employment – Unfair dismissal – Economic entity – Transfer of part of economic entity – Transfer of Undertakings (Protection of Employment) Regulations, SI 1981/1794.

From April 1996 to April 1999 B supplied building maintenance services throughout the whole of a local authority area pursuant to a single contract. It was not a contract to carry out specific works, but one which created a service framework. At the end of 1998 the authority invited new tenders for it building maintenance work, but split the geographic area to be covered into two, area 1 and area 2. It invited separate tenders for each area, on the basis that the Transfer of Undertakings (Protection of Employment) Regulations (TUPE), SI 1981/1794 applied. F was awarded the contract for area 2, but refused to take on the employees of B, contending that there had been no relevant transfer of an undertaking and that TUPE did not, therefore, apply. B contended that TUPE did apply to area 2 and therefore refused to accept that any of the employees were still employed by it after April 1999.

Nine of the employees brought complaints of unfair dismissal before an employment tribunal, joining both B and F. The tribunal held that there had been a transfer of part of the undertaking, and that F was liable for the unfair dismissal of six employees, and that B was liable for the unfair dismissal of two employees. F appealed against that decision, and B cross-appealed. The Employment Appeal Tribunal held, inter alia, that it was not a prerequisite of a conclusion that there had been a transfer within TUPE of part of an undertaking that that part was a separate economic entity in the hands of the transferor before the transfer. F appealed.

F submitted that the employment tribunal had erred in law, and that the EAT should have allowed its appeal.

The appeal would be dismissed.

The employment tribunal had not erred on the question whether there had been a transfer of part of the undertaking.

The employment tribunal had found that prior to 1999 there had been an existing stable economic entity, which was an undertaking in the hands of B. It was a single contract for building maintenance services for the whole of the authority’s area. After that date the same services had been supplied to the authority over the same geographical area, but by two stable economic entities under two separate contracts in the hands of two different contractors. The fact that the two areas had previously been one entire area covered by one contract did not prevent the tribunal from concluding in the circumstances that part of the larger economic identity in the hands of B and covered by area 2 was capable of being transferred to F, in whose hands it had retained its identity as a part of the larger economic identity.