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Appeal No. UKEAT/0545/09/MW

EMPLOYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 27 April 2010

Before

HIS HONOUR JUDGE McMULLEN QC (SITTING ALONE)

MR D CHAMBERS & 8 OTHERS (APPELLANT)

1) QCR MOTORS LTD (IN VOLUNTARY LIQUIDATION); 2) ADAC PAINTBOX LTD (RESPONDENTS)

Transcript of Proceedings

JUDGMENT

For the Appellants
MR TIMOTHY GRACE (of Counsel)

Instructed by:
Messrs EAD Solicitors LLP
Prospect House
Columbus Quay
Liverpool
L3 4DB

For the First Respondent
MR EDWARD PEPPERALL (of Counsel)

Instructed by:
Messrs Willsons Solicitors
George Eliot Building
4 Coventry Street
Nuneaton
CV11 5SZ

For the Second Respondent
MS SOPHIE GARNER (of Counsel),

Instructed by:
EPAS
Basepoint Business Centre
Oakfield Close
Tewkesbury Business Park
Tewkesbury
GL20 8SD

JURISDICTIONAL POINTS – Claim in time and effective date of termination

TRANSFER OF UNDERTAKINGS – Consultation and other information

The Employment Tribunal did not err in finding time ran for TUPE 2006 complaints from the date of transfer and for unfair dismissal claims from the effective date of termination, and correctly held the claims were made more than three months after the relevant dates. They were out of time.

1. This case is about Employment Tribunal procedure in refusing to allow an out of time complaint to be lodged. I will refer to the parties as the Respondents QCR Motors Limited in liquidation, who are the transferor in Nuneaton and are represented by Mr Edward Pepperall, and Paintbox Limited, the transferee in Birmingham represented by Ms Sophie Garner. The Claimants were represented differently below at two stages, but today have the advantage to be represented by Mr Timothy Grace, all of Counsel.

1. It is an appeal by nine out of 24 Claimants in proceedings at the Birmingham Employment Tribunal where Employment Judge Gaskell sat alone to determine whether the claims had been presented on time. After a two day hearing, for Reasons given on 22 September 2009, the Claimants were held to be out of time against the relevant Respondent.

1. The Claimants had made a number of complaints, all of which are regulated by a common form of limitation clause which requires the claim to be presented within three months, which in the conventional practitioners' rule of thumb, as I have called it, in Joshi v Manchester City Council [2008] All ER (D) 246, means three months less a day, unless it was not reasonably practicable to do so, and, in that case, the time will be extended by discretion if it was presented within a reasonable time thereafter (see section 111(2) of Employment Rights Act 1996 governing unfair dismissal).

1. The period runs from the effective date of termination. For one of the claims in this case, which is against QCR, the time limit runs from a relevant transfer for there has been a transfer in accordance with new TUPE 2006 of a service provision from QCR to Paintbox. The individual claims are weighed by the Claimants against Paintbox and a sole claim of failure to consult, pursuant to TUPE Regulations 12 and 15, is weighed against QCR. In those two Regulations time runs from the date of the relevant transfer.

1. Each Respondent contended that the Claimants were out of time. The first issue to determine was whether there was a relevant transfer, there being a dispute between QCR and Paintbox as to whether there was. QCR asserting that case; Paintbox denying it. The Claimants agreed with QCR.

1. At a hearing before Employment Judge van Gelder and members over two days in 2008, sent to the parties on 6 October 2008, it was determined that there was a service provision change from QCR to Paintbox on 7 August 2007. Mention is also made of Stadco, which is the provider of the work first to QCR and then by that service change to Paintbox. No reasons are given for this Judgment, none having been asked for. Unusually it was a three person Tribunal conducting a PHR under Regulation 18 of the 2004 Tribunal Rules.

1. I am assured by both Respondents' Counsel, who there appeared, that there was a very thorough examination of the circumstances before and after the watershed date of 7 August 2007. There was no appeal. Nine of the Claimants decided to appeal against the Gaskell Judgment. Wilkie J on the paper sift sent this to a full hearing. He gave no reasons.

1. The relevant provisions are not in dispute. I have summarised an exemplar above. So far as the effective date of termination is concerned, The Employment Rights Act 1996 section 97(1)(b) provides that the effective date of termination where no notice is given is the date when the termination takes effect.

1. For the purposes of new TUPE 2006, when a relevant transfer or service provision change occurs there is no termination of the contract of employment of any person employed by the transferor and it takes effect as though it had originally been made by the transferee (see TUPE Regulation 4(1)). All of the rights and obligations under the contract are then passed to the transferee, here Paintbox.

1. All of the Claimants were engaged at some stage prior to June 2007 by QCR to paint the roofs of Land Rover vehicles supplied to it by Stadco. On 13 June 2007 Stadco announced that that contract had been awarded to Paintbox and gave three months notice to QCR. Consultation began with the employees of QCR on 22 June 2007 and QCR asserted the position it has adopted, correctly as it turned out, that there was a service provision change to which TUPE applied. Paintbox asserted that TUPE did not apply.

1. Elected representatives were consulted on 19 July 2007 and were told by QCR that the transfer would probably take place on 12 September 2007 but that it might be earlier. There was a lay off during the end of July 2007 and early August 2007. The work rapidly declined; complaints were made by QCR that it was getting no work from Stadco.

1. On 7 August 2007, as found by the van Gelder Tribunal, the service provision transferred. On 24 August 2007 the Claimants were told by QCR to turn up for work after the Bank Holiday, that is 28 August 2007, when they would be given a letter and from that date they would be employed by Paintbox. They did attend; they were given a letter which included also a reference to a letter uttered by Paintbox on 13 July 2007 making its position clear and a copy of the DTI guide to TUPE.

1. This caused a good deal of dismay and later that day the letter, insofar as it purported to cease payment to the Claimants, was withdrawn. A dispute arose as to what the letter meant. The judge resolved that. It meant that the employees were assured that they would continue to be paid until the date originally set for the transfer as the outside date, three months after notice had been given, vis 12 September 2007.

1. Meanwhile, the Claimants were consulting their trade union Unite. By at least 6 September 2007 they consulted their solicitors, instructed by the union. That involvement is illustrated by a letter of advice provided to the leadership of the Claimants on 6 September 2007. This reiterated presumably what they had been told or what they inferred, which was that the transfer was due to take place on 13 September 2007, and indicated that they could take various actions, indicating the threat of legal proceedings, but nothing could happen until the transfer had occurred.

1. On 10 October 2007 there was a consultation between one of the Claimants and the solicitor indicating, again, that the transfer had now taken place on 12 September 2007 and legal proceedings were going to be taken.

1. The deadline for submitting a claim based upon a relevant transfer on 7 August 2007 was 6 November 2007; no form was submitted. Based upon a position, described by the Judge as a backstop, relating to what had occurred on 28 August 2007 it would be 27 November 2007. Based upon the putative transfer date of 13 September 2007 it would be 12 December 2007. Claims were presented by all the Claimants on 10 December 2007. So, it was out of time for the first two dates but in time should the third date be correct as the effective date of termination or the relevant transfer.

1. The Judge considered the consequences. He traced all of the correspondence through the notes of the meetings and heard live evidence. He heard live evidence from two of the Claimants; both of them gave evidence which was not very satisfactory, whereas on the other hand the HR Manager of Paintbox, Ms Butcher, gave clear evidence which the Judge fully accepted.

1. The Judge addressed the relevant law and his self directions in paragraph 7.2 and 7.3, based on the authorities he set out in 7.1, are unimpeachable as accepted by all Counsel. The relevant transfer having occurred on 7 August 2007, the only issue was whether it was reasonably practicable for the Claimants to have presented their claims. In short he found, I infer, that the Claimants did not know the date of the transfer but by 28 August 2007 they did know that there had been a transfer. The question was whether it was reasonably practicable for them to have realised there was a relevant transfer on 7 August 2007.

1. The Judge looked at the whole of the conduct of the Claimants, the union and the solicitors, and, what was reasonably exigible on proper instructions and inquiry in the limitation period. He came to the conclusion that proper inquiry would have revealed a transfer on 7 August 2007. Although this was not determined judicially until the van Gelder Tribunal it could have been discovered at an earlier stage and, therefore, it could not be said that it was not reasonably practicable.

1. In his backstop position based upon the events of 28 August 2007, the claims were still out of time. But he did smile upon the Claimants' position and would have been inclined to have allowed the claims with the suitable discretionary extension if the facts had pointed that way. They would point that way if there were misleading or conflicting responses from the Respondents as to which there was none.

1. On the basis of the events on 28 August 2007 as an act of grace QCR agreed to pay the Claimants but to place them on garden leave until 12 September 2007.

1. The Claimants make what are in this court the routine allegations of perversity, inadequate findings and inadequate reasons. Mr Grace contends the Judge failed to grapple with the central issue which was to look into the minds of the Claimants and to find out what they knew about the transfer on 7 August 2007. The Judge made inadequate findings in order to inform the self directions on law. The finding by the Judge was perverse.

1. The case advanced by Mr Pepperall, substantially adopted by Ms Garner, is that this is a clear case where it cannot be said the Judge failed to recognise the decisions which he had to make, or gave reasons based upon findings which were wanting. The position is explained by the Judge's approach to the combined mindset of the Claimants and their advisers, together with the Judge's finding as to what those further researches would have revealed.

1. The principal issue to be determined for a claim against QCR of failure to consult was what was the date of transfer (service provision change)? That is clear from a reading of Regulations 12 and 15. In respect of Paintbox, what was the effective date of termination? The central issue is the reasonableness of the Claimants' lack of knowledge of the relevant transfer.

1. In my judgment, the legal principles emerge from the authorities cited by the Judge and from the following passages: in Walls Meat Co. Ltd v Khan [1979] ICR 52 Brandon LJ said the following:

"Looking at the matter first without reference to the authorities, I should have thought that the meaning of the expression concerned, in the context in which it is used, was fairly clear. The performance of an act, in this case the presentation of a complaint, is not reasonably practicable if there is some impediment which reasonably prevents, or interferes with, or inhibits, such performance. The impediment may be physical, for instance the illness of the complainant or a postal strike; or the impediment may be mental, namely, the state of mind of the complainant in the form of ignorance of, or mistaken belief with regard to, essential matters. Such states of mind can, however, only regarded as impediments making it not reasonably practicable to present a complaint within the period of three months, if the ignorance on the one hand, or the mistaken belief on the other, is itself reasonable. Either state of mind will, further, not be reasonable if it arises from the fault of the complainant in not making such inquiries as he should reasonably in all the circumstances have made, or from the fault of his solicitors or other professional advisers in not giving him such information as they should reasonably in all the circumstances have given him.

With regard to ignorance operating as a similar impediment, I should have thought that, if in any particular case an employee was reasonably ignorant or either (a) his right to make a complaint of unfair dismissal at all, or (b) how to make it, or (c) that it was necessary for him to make it within a period of three months from the date of dismissal, an industrial tribunal could and should be satisfied that it was not reasonably practicable for his complaint to be presented within the period concerned.

For this purpose I do not see any difference, provided always that the ignorance in each case is reasonable, between ignorance of (a) the existence of the right, or (b) the proper way to exercise it, or (c) the proper time within which to exercise it."

1. A similar approach was adopted by Stephenson LJ in Riley v Tesco Stores Ltd [1980] IRLR 103, where he followed precisely the language of Brandon LJ (see paragraph 7) and by Waller LJ at paragraph 37, who said this:

"Once a man knows of his right it is more difficult to say that it was not practicable to give notice within a reasonable time. If he reasonably does not discover his right until a short time before the last days of the three months have elapsed, then obviously it would probably not be reasonably practicable to give notice in time. This case has been concerned, however, because of the intervention of the Citizens Advice Bureau. What is the position if, knowing of your right, you ask another to take the necessary action? In my opinion, you cannot then be in a better position than if you had retained the power to act yourself. If you have retained a skilled adviser and he does not take steps in time, you cannot hide behind his failure. There may be circumstances, of course, were there are special reasons why his failure can be explained as being reasonable. Like my Lord I am, however, doubtful whether this situation depends on the skill of the adviser. The defence of not being reasonably practicable might fail, whether or not the adviser was skilled, if in fact he was properly acting."

1. In Radakovits v Abbey National Plc [2010] IRLR 307, Court of Appeal, Elias LJ, giving the principle Judgment, upheld the Judgment I gave in respect of a time limit point. It was stressed that in cases where reasonableness of belief is the central issue it behoves a Claimant to give evidence as to what that was, principally in that case to do with an extension of the primary limitation period, but the same applies. In that case it is instructive to note, and this can be found in my Judgment in the EAT, that the principle cause of the claim being out of time was the failure of the Claimant and his colleague to place before instructing solicitors the correct date of the effective date of termination.

1. With those principles in mind I turn to the arguments. I say at once care should be given by all advocates in this court to the language of HHJ Serota QC and members inAbiola v North Yorkshire County Council and ors UKEAT/0369/08. The time came as it did before Judge Serota to reiterate that it is exceptional for to find a want of reasons combined with perversity and a want of proper findings.

1. The test for perversity to be passed by a successful Appellant is a high one. An overwhelming case must be made, see Yeboah v Crofton [2002] IRLR 634, per Mummery LJ. For the purposes of giving the parties an understanding, Reasons need not deal with every single point raised, see English v Emery Reimbold and Strick [2003] IRLR 710, which itself incorporates a Judgment of Sedley LJ, pointing presciently to the burgeoning cottage industry of barristers in turning out appeals alleging a lack of reasons.

1. In my judgment what cannot be said about the Judgment of Judge Gaskell is it lacks reasons or findings and, given both of those, it is difficult to say that it is perverse following what is acknowledged to be a correct direction on the law. The central point in this case is that the Claimants could not positively identify the start date of the three month period at the time when these claims went in. It is conceded by Mr Pepperall and Ms Garner that lack of knowledge of the start or end of the period is a relevant feature for determining whether it is not reasonably practicable.

1. An issue arose as to the cogency of the evidence of the Claimants. Although in Radakovits the issue turned upon the non attendance of Mr Radakovits to give evidence as to his state of mind, in this case evidence was given by two Claimants, who, as it happens, did not become Appellants. The other Claimants are entitled to accept their evidence as the vehicle for their thinking and the Judge put them at no disadvantage for being associated with that evidence and for having it all in the same place.

1. From 13 September 2007 there was no impediment to the solicitors putting the claims in. As Mr Grace accepts, it could not be said that it was not feasible or practicable for them to do so. They left it to the very last minute for reasons not made clear. It could be said, as a matter of ordinary language, that it was not reasonably practicable to put in a claim between 13 September 2007 and 6 November 2007, some eight weeks. However, in the light of the Respondents' concessions, drawn from the Judgement of Brandon LJ, what are essential are knowledge of the right, of it attracting a time limit, of what the time limit is and of when it runs from.

1. Mr Grace's argument on reasonableness was the subject of written skeleton arguments and oral responses to which he has not replied. In my judgment that represents the state of law here. It is correct to fix the Claimants with the reasonableness of the solicitors: Dedman [1974] ICR 53 CA. In a sense it is circular because the solicitors were acting upon what the Claimants told them. It is no part of my job to apportion any blame here, but there were criticisms made by the Employment Judge as to the steps which could have been taken and as to the outcome of such steps. The outcome would have been that there was a transfer before 28 August 2007 and, if not, then on 28 August 2007. That could have been discovered.

1. That is a question of fact, it is not perverse. I hold that the reasonableness for the purposes of reasonable practicability, includes what could have been done. It was reasonably practicable to present these claims by the three month deadline because, as the Judge noted, further inquiries would have put the solicitors on notice that a transfer had already occurred by the time of their involvement and, on examination, occurred on 7 August 2007.

1. That is clear from the letter of 28 August 2007 and from what was happening on the ground; the work had run out and the men were going to be paid no more after 28 August 2007, except by a subsequent concession. It is not strictly necessary to determine the correctness of the Judge's backstop, but on the assumption that he was right, the Claimants were still out of time. On the basis that the Judge had not found there was any misleading by QCR or Paintbox, then that secondary position does not arise.

1. What is odd about the unappealed finding as to the date of transfer is that the legal analysis changes. The Judge found as a fact that the Claimants were employed until 7 August 2007 by QCR. That was the date found by the van Gelder Tribunal to be the date of the transfer. TUPE requires the following analysis. The Claimants' contracts of employment were transferred by operation of law on 7 August 2007 from QCR to Paintbox. Instantaneously, Paintbox performed its previous indication that it would not regard TUPE as applicable and would take on the Claimants only by offer and acceptance. Since none of them applied for jobs, that provision in the written offer to the Claimants did not arise. It was suggested in debate that the correct analysis was that Paintbox immediately dismissed them, or repudiated their contracts by failing to allow them to come to work. It had been suggested that they should all turn up by transport provided by QCR; that did not materialise.

1. So, the correct analysis following the finding of a relevant transfer has to be that the contracts of the Claimants went to Paintbox and Paintbox dismissed them in connection with the transfer. So, liability for the individual aspects of the Claimants' claims falls upon Paintbox, liability in respect of failure to consult alone lying with QCR.

1. That is the only explanation for the continued employment of the Claimants. They continued to work and to draw pay until 24 August 2007, or perhaps 28 August 2007. In my judgment that could only have been under new contracts of employment. On this basis they had been dismissed by Paintbox on 7 August 207 and had resurfaced at QCR. After 28 August 2007 they did no work but were paid and then on 12 September 2007 their contract came to an end, pursuant to the notice given to them on 28 August 2007 that they would continue to be paid. So, I regard that as a period of employment.

1. That extraordinarily artificial analysis seems to have been the same approach as adopted by Lady Smith in Capita Health Solutions Ltd v BBC & McLean [2008] IRLR 595, for she observed that the only exception to an automatic novation under Regulation 4(1) of new TUPE is when an employee objects. When an employee objects there is a relevant transfer, the contract does not carry over but the employee can continue to be employed by the transferor. Alternatively, I suppose, s/he could be employed by the transferee, not pursuant to TUPE but only pursuant to offer an acceptance.

1. Anyway, that is a way of explaining the apparent conundrum of the employees being at the same time employed by competitors. The legal analysis is that they were employed for a nanosecond by Paintbox before continuing their employment with QCR until it ran down on 12 September 2007. In those circumstances the Judge made no error of law in his finding that it was reasonably practicable for the Claimants to present their claims by 6 November 2007 and it was not necessary for him to consider the exercise of discretion thereafter but, insofar as he did, a period some five weeks would not be reasonable.

1. The appeal is dismissed. Costs refused [reasons not transcribed]