Appeal No. UKEATS/0010/11/BI
EMPLOYMENT APPEAL TRIBUNAL
52 MELVILLE STREET, EDINBURGH, EH3 7HF
At
the Tribunal
On 21 September 2011
Before
THE
HONOURABLE MR JUSTICE UNDERHILL (PRESIDENT)
(SITTING ALONE)
MR
R DILLON & OTHERS APPELLANTS
(1)
MS S TODD
(2) CARE CONCERN GB LTD RESPONDENTS
Transcript of Proceedings
JUDGMENT
SUMMARY
TRANSFER OF UNDERTAKINGS – Consultation and other information
Where the EAT has made an order under regulation 15 (8) of TUPE which
was not made by the ET, or is in different terms, the time limit prescribed by
regulation 15 (12) for an individual employee bringing proceedings under
regulation 15 (10) runs from the date of the order of the EAT and not the order
of the ET – Even if that were not so, it was not reasonably practicable for the
Appellants, who were (reasonably) ignorant of the procedure for enforcing an
award under regulation 15 (8), to present their claims in time and they had
acted within a reasonable time once they had become aware of the position
THE HONOURABLE MR JUSTICE UNDERHILL (PRESIDENT)
1.
The Appellants, who number 28, were all as at 4 January 2008 employed
by the First Respondent, Ms. Sheena Todd, at a care home owned and operated by
her in Port Glasgow. As from that date, the home was sold to the Second
Respondent, Care Concern GB Ltd. (“Care Concern”). They form part of a rather
larger group of employees who brought proceedings against both Respondents
under regulation 15 (1) of the Transfer of Undertakings (Protection of
Employment) Regulations 2006 (“TUPE”), complaining that Ms. Todd had failed
to comply with her consultation obligations under regulation 13. I should
set out the relevant provisions. Regulation 15 (1) begins:
“Where an employer has failed to comply with a requirement
of regulation 13 ..., a complaint may be presented to an Employment
Tribunal on that ground […]”
Paragraph (8) sets out what the tribunal should do where it finds
the complaint under paragraph (1) well-founded. It reads as follows:
“Where the tribunal finds a
complaint against a transferor under paragraph (1) well‑founded it
shall make a declaration to that effect and may—
(a) order the transferor, subject to
paragraph (9), to pay appropriate compensation to such descriptions of
affected employees as may be specified in the award; or
(b) […]”
Paragraph (9) reads as follows:
“The transferee shall be jointly
and severally liable with the transferor in respect of compensation payable
under sub‑paragraph (8) (a) or paragraph (11).”
“Appropriate compensation” is defined in regulation 16 (3)
as follows:
“... such sum not exceeding
thirteen weeks’ pay for the employee in question as the tribunal considers just
and equitable having regard to the seriousness of the failure of the employer
to comply with his duty.”
2.
The claim against Ms. Todd was upheld by an Employment Tribunal sitting
in Glasgow, which ordered, pursuant to regulation 15 (8) (a), that
thirteen weeks’ pay be paid to the affected employees; but the claim against Care
Concern, based on regulation 15 (9), was dismissed. A rather curious procedure
was followed in relation to the promulgation of the Tribunal’s decision, which
was in effect delivered in two stages: however, for present purposes it is
enough to say that the parties have proceeded on the basis that the decision of
the Tribunal was promulgated on 14 September 2009.
3.
Ms. Todd appealed not only against the award against herself, as regards
both liability and quantum, but also against the Tribunal’s failure to make an
award against Care Concern under regulation 15 (9). By a decision of this
Tribunal (myself presiding) promulgated on 28 July 2010 (reported, sub.
nom. Todd v Strain, at [2011] IRLR 11), the appeal as regards
liability was dismissed; but the amount of compensation was reduced to seven
weeks’ pay, and Care Concern was declared to be jointly and severally liable
for the sums awarded.
4.
Neither Respondent has paid to the Appellants any part of the sums
awarded. However, the structure of this part of TUPE, in common with the
provisions relating to other failures of collective consultation, is that the
original award of a tribunal, which is made in favour of a class of employee
rather than of individuals as such, is not enforceable in its own right.
Rather, employees in the class in question are obliged to bring separate
proceedings asserting that they are beneficiaries of the award and have not
been paid. The relevant provision is paragraph (10) of regulation 15,
which reads as follows:
“An employee may present a
complaint to an employment tribunal on the ground that he is an employee of a
description to which an order under paragraph ... (8) relates and that—
(a) […];
(b) in
respect of an order under paragraph (8), the transferor or transferee, as
applicable, has failed, wholly or in part, to pay him compensation in pursuance
of the order.”
There are time limits for any such claim. Regulation 15 (12)
reads (so far as material) as follows:
“An employment tribunal shall not
consider a complaint under paragraph (1) or (10) unless it is presented to
the tribunal before the end of the period of three months beginning with—
(a) […]; or
(b) in respect of a complaint under
paragraph (10), the date of the tribunal’s order under paragraph ... (8),
or within such further period as
the tribunal considers reasonable in a case where it is satisfied that it was
not reasonably practicable for the complaint to be presented before the end of
the period of three months.”
The wording of that paragraph adopts
the very well-known language of section 111 (2) of the Employment Rights Act
1996, which prescribes the time limits for the presentation of a claim for
unfair dismissal.
5.
The Appellants have all brought claims under regulation 15 (10) (b)
against both Respondents. The claims were presented on 4 October 2010,
or within a day or two thereafter. The Respondents took the point that the
claims were out of time. The Appellants contended that time ran only from the
date of the decision of this Tribunal, i.e. 28 July, so that the claims were in
time; in the alternative, they contended that it had not been reasonably
practicable for them to bring their claims in time. That issue was decided by
Employment Judge Muir, sting in Glasgow, on 30 November 2010. He
held that time did indeed run from the date of the original decision of the
Employment Tribunal, i.e. 14 September 2009, and that the Appellants
were unable to show that it had not been reasonably practicable for them to
bring proceedings within the period of three months from that date.
Accordingly he held that the Tribunal had no jurisdiction to entertain the
claims.
6.
The Appellants have appealed against that decision. The First
Appellant, Mr Robert Dillon, appearing in person, has represented all
of them. Ms. Todd has been represented by Mr Tony Caplan of Anderson
Fyfe. Care Concern has been represented by Mr Ian MacLean of
Peninsula Business Services. The Appellants have challenged both aspects of
Judge Muir’s decision, that is to say his decision as to the date from
which time ran and also his decision that it was reasonably practicable for
them to have brought their claims in time.
7.
The hearing of the appeal took a rather unusual course. My firm view when
I first considered the papers was that the Judge was wrong in his finding as to
the date from which time ran and that it in fact ran only, as the Appellants
had understood, from the date of the decision of this Tribunal, in which case
the reasonable practicability issue did not arise. I asked Mr. Caplan and Mr.
MacLean to address me on that aspect first. They failed to persuade me to a
different view, and I accordingly delivered an oral judgment allowing the appeal.
However, in the course of listening to my judgment Mr. Caplan thought of
another way of putting Ms. Todd’s case. Although it was not foreshadowed in his
Respondent’s Answer or in his skeleton argument I thought it right to allow him
to address me on it. Mr. MacLean associated himself in Mr. Caplan’s further
submissions. In the circumstances I thought it right to reserve my decision,
and as a precaution I heard submissions on the other point as well.
8.
I will start by setting out my original reasoning, before turning to Mr.
Caplan’s new point.
9.
I began by considering the position of Care Concern. It seemed to me
that if the time for bringing enforcement proceedings against it ran from the
date of the original decision that would produce a nonsensical result. The
Employment Tribunal had in its decision of 14 September made no order
requiring Care Concern to make any payment to the affected employees: such an
order was not made until the later decision of this Tribunal. Accordingly, the
Appellants could not have commenced proceedings against it under
paragraph (10) at any time before the decision of this Tribunal was
promulgated because they could not have asserted the fundamental fact required
by paragraph (10) (b), namely that “the … transferee … [had] failed … to
pay [them] compensation in pursuance of the order”. The regulation
would thus only work if the order referred to in paragraphs (10) (b) and (12)
(b) were taken to be the order of this Tribunal. I took the view that,
although there might be some slight verbal difficulties about construing the
provisions so as to achieve that result, there was no difficulty of substance.
It had to be borne in mind that the rights of employees under TUPE derive from
the Acquired Rights Directive, and it was unacceptable that there should be no
effective remedy for claimants in circumstances, such as have arisen in this
case, where an order under regulation 15 (8) or (9) is not made at first
instance and is made for the first time on appeal. I also took into account
the fact that when this Tribunal makes an order on appeal it is in effect
exercising the powers of the employment tribunal: see section 35 of the Employment
Tribunals Act 1996.
10.
I accepted that the position as regards the liability of Ms. Todd was
not quite so straightforward. Unlike in the case of Care Concern, the
Appellants could have initiated proceedings under paragraph 15 (10) in
respect of the Tribunal’s original order, which made an award in favour of the affected
employees amounting to thirteen weeks’ pay; and I did not see that the
fact that Ms. Todd had appealed could stop the clock under paragraph (12)
(though it might well be grounds for having any such claim sisted pending the
outcome of the appeal). The real question, however, was whether a different
clock started in relation to the order made by this Tribunal at the conclusion
of the appeal. It seemed to me that it did. Once it was accepted, as I had
already concluded, that the “tribunal” referred to in paragraphs (10) (b)
and (12) (b) could include this Tribunal exercising its powers under section 35
of the 1996 Act, I could not see why in principle that should not be the case
where this Tribunal made a different award from that made by the employment tribunal
(i.e. rather than only where the employment tribunal had made no award at all).
Again, that would accord with reality. If the Appellants had obtained an order
under paragraph (10) (b) in relation to the Tribunal’s original award,
i.e. one for thirteen weeks’ pay, that would have been an order in relation to
the wrong amount. An order in relation to the right amount could only have
been made once this Tribunal had made its own, different, order.
11.
Mr. Caplan’s new point was that the structure of regulation 15 did not
require any order to be made against Care Concern at all. What paragraph (8)
provides for is for an order to be made against the transferor. As
regards the transferee, paragraph (9) provides that it will be jointly
and severally liable for the amount awarded under paragraph (8), but the
tribunal is not empowered to make any order to that effect: it is simply a
legal consequence. Thus the first step in my reasoning, as set out at
paragraph 9 above, was wrong: the order that matters, even as regards Care
Concern, is the order made against the transferor, which was made by the
Tribunal in September 2009. Of course Mr. Caplan was not directly concerned
with the order against Care Concern, but only with the order against Ms. Todd;
but my reasoning in relation to the latter rested in large part on my reasoning
in relation to the former.
12.
I should start by noting that that submission is flatly contrary to the
position adopted by Ms. Todd at the previous appeal, when it was accepted
(indeed, as I recall, positively argued) by her counsel that the Tribunal had
erred in making no order against Care Concern. Nevertheless I should consider
it. In my view Mr. Caplan is wrong. If a party is to be made liable as the
result of the order of a tribunal, which is the effect of paragraph (9), it is
right in principle that he should be a party to the proceedings in question, so
that he can have the opportunity to contest his liability: if he is not joined
by the claimant, he can be joined by the primary respondent or by the tribunal
– see rule 10 (2) (k) and/or (r) of the Employment Tribunal Rules of
Procedure. It is true that in a TUPE case like the present the
transferee’s liability will depend on the acts or omissions of the transferor,
of which the transferee may in practice have little knowledge. But that makes
no difference in principle; and the reality is that in TUPE cases the
transferor is often unwilling or unable to defend the claim and the transferee
is the only person who can even if he is at some disadvantage in doing so. If,
therefore, the transferee has been a party to the proceedings, as Care Concern
was here, on the basis that it would be jointly and severally liable for any
award made against the transferor, it would be very odd if any eventual order
were not made against it. I accept that paragraph (8) does indeed refer only
to “the transferor”; but that is explicitly subject to paragraph (9), and while
I agree that the drafting is clumsy I think that that can be read as empowering
the tribunal to make an order as to the joint and several liability of the
transferee – as we indeed did in the present case. That view is supported by
the wording of paragraph (10) (b), which clearly proceeds on the assumption
that the transferee will be liable to the affected employees “in pursuance of
the order [sc. under paragraph (8)]”.
13.
Accordingly I adhere to the decision which I announced orally. The
appeal is allowed, and the case must be remitted to the Tribunal to decide (if
this cannot be agreed) what amounts are due to each of the Appellants.
14.
In case I am wrong in my reasoning above, I will briefly add that even
if the claims were out of time I would hold that it was not reasonably
practicable to bring them within time. My reasons can be summarised as
follows.
15.
It is clear from the correspondence which I have seen, and is confirmed
by Mr. Dillon, that the Appellants were initially ignorant of the correct
procedure for enforcing an award under regulation 15 (8). Mr. Dillon is not a
lawyer, though he writes a good letter. He relied on the booklet entitled “the
Judgment” which is sent to successful claimants. This says nothing about
collective claims of the present kind and simply advises successful claimants
that if they wish to enforce the judgment they should do so in (in Scotland) the
Sheriff’s Court, for which purpose they would need a extract of judgment: the
guidance says that they should not seek an extract until the expiry of the time
limited for appealing, which carries the implication – which would accord with
common sense – that enforcement proceedings could not be pursued if there was a
pending appeal. On that basis, the Appellants took no action until after the
decision of this Tribunal was promulgated on 28 July 2010. Mr. Dillon further waited
until the expiry of the time for appealing to the Inner House and then, on 10
September, wrote to the Secretary of the Tribunals asking for an extract of
judgment. It was only when the Secretary replied, on 24 September, explaining
that the earlier award was unenforceable as such and that fresh proceedings
would be required, that he went back to regulation 15 and was able to
understand the position. The current proceedings were, as I have said,
commenced in early October.
16.
I consider that that ignorance was reasonable: the procedure for
enforcing awards under regulation 15 (8) is indeed unusual, and the official
booklet gave no help. I believe that it was reasonable for Mr. Dillon to think
that he could – indeed should – await the outcome of the appeal before taking
enforcement measures. It is well established, in the context of the cognate
provisions of section 111 (2) of the 1996 Act, that reasonable ignorance of
time limits (by a person who is not represented by solicitors or other skilled
advisers) will render it not reasonably practicable for him to comply with
those limits: see, most recently, paragraph 9 of my judgment in John
Lewis Partnership v Charman (UKEAT/0079/11), referring to the older
authorities. For the reasons given, this is in my view such a case. The
Appellants unquestionably acted within a reasonable time once they understood
the true position.
