The respondent employer failed to inform the employees that they had become incorporated. The respondent contended that the claimant was not entitled to bring a claim under regulation 15 of TUPE which, they claimed, does not exist when no employee respresentative is engaged. The EAT considered the Employment Appeal Tribunal case of Howard v Millrise, which observed that it was unnecessary to decide under which provision of what are now regulations 15(1)(a), (b) or (d), the complaint properly lies.  An employee had a right to bring a complaint of breach of what is now regulation 13 by the employer.  So too in this case whether the failure was to take any steps to invite the election of representatives, or to give information to such representatives, or, in default of election, to give information to the claimant herself, or all these things there was a failure by the employer to comply with the regulations. On the issue of costs, the EAT decided that the resistance to the claim was not misconceived, since the Millfield case had not been heard of by the respondent's legal team and thus they would not have known that their resistance to the claim was bound to fail.

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Appeal No. UKEAT/0217/10/CEA

EMPLOYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 30 July 2010

Before

THE HONOURABLE MRS JUSTICE SLADE

MRS A GALLICO

MS B SWITZER

MRS F HICKLING T/A IMPERIAL DAY NURSERY & OTHERS (APPELLANTS)

MISS J MARSHALL (RESPONDENT)

Transcript of Proceedings

JUDGMENT

For the Appellants
MR DAVID MEREDITH (Representative)

For the Respondent
MS KAREN MOSS (of Counsel)

Instructed by:
Messrs BTMK LLP Solicitors
County Chambers
23-27 Weston Road
Southend on Sea
Essex
SS1 1BB

TRANSFER OF UNDERTAKINGS – Consultation and other information

PRACTICE AND PROCEDURE - Costs

The Employment Tribunal did not err in upholding a claim by an employee under TUPE regulation 15 in circumstances in which there were no employee representatives. Howard v Millrise Ltd [2005] IRLR 84 applied.

In light of the difficulty of the point and because neither party was aware of Millrise, costs awarded against the employers set aside.

1. The Appellant employers appeal from the judgment of an Employment Tribunal entered in the register on 9 February 2010. The Employment Tribunal determined a number of claims by Ms Marshall, a former employee. This appeal is from the finding of the Employment Tribunal that a claim by the employee under regulation 15 of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) succeeded. The employers also appeal from an order for costs made in the sum of £862.15, representing counsel's fees for the day of the hearing.

1. Mr Meredith, on behalf of the Appellant employers, contends that the Employment Tribunal erred in finding for the employee on the basis of a breach of TUPE regulation 13(2) and 13(6). He contends that those provisions give no entitlement to an individual but only to a representative of affected employees to complain.

1. However, the Employment Tribunal, he says, erred in that it erroneously held that the Claimant employee was entitled to present her claim under regulation 15 and he points out wrongly described as 15B. He contends that even if the judgment is read so as to show that the Tribunal reached its decision under 15(1)(d), he contends that the Employment Tribunal erred in so doing in that that method of bringing a claim did not apply to alleged breaches of regulations 13(2) and 13(6).

1. Further, he contends that, in any event, the Employment Tribunal erred in that it stated that the employee was entitled to bring a claim by virtue of regulation 15B, which does not exist, when no representative is engaged. He says that that is clearly wrong and, on this basis alone, the appeal should succeed.

1. The brief facts are these. The employee was a Nursery Nurse, employed from 25 September 2007 till 11 February 2009 at the employers' nursery. The nursery became incorporated on 1 January 2009. It was agreed by the employers that there was a transfer of an undertaking when this occurred, that there was no information or consultation with employee representatives in connection with the transfer, and there were no such representatives. Mr Meredith, on behalf of the employers, contends that the only right by which an individual, such as Ms Marshall, could claim and complain under TUPE of the failure of the employers to inform and consult in relation to the transfer was under regulation 13(11).

1. In a skeleton argument Mr Meredith contends that by reason of a letter of 11 February 2009, which was wrongly included in our bundles without permission, the employee was given information in compliance with regulation 13(11). This letter was written weeks after the transfer and plainly, in our judgment, was not compliant with regulation 13 in any event.

1. The Employment Tribunal had before it a number of claims. We refer to the parts of the judgment in which they deal with the claim under TUPE.

Paragraph 4:

"The Tribunal has considered the following provisions:- Regulation 15 and 13(14) of the TUPE Regulations. […]"

Paragraph 6:

"In respect the Claimant's claim for failure to comply with the TUPE Regulations, the Respondents' arguments in this regard are misconceived. The Claimant was patently entitled to bring the claim under both Regulation 13 and Regulation 14, by virtue of Regulation 15(b) when no representative is engaged. The Tribunal had some difficulty trying to understand the Respondents' arguments in this regard."

Paragraph 7:

"The Respondents called no evidence to counter the submissions of 13 weeks compensation is appropriate for failure to consult and therefore we award 13 weeks in compliance with Regulation 16(3) of the TUPE Regulations. […]"

We note that there is no appeal against the award of 13 weeks compensation.

1. At paragraph 9 the Tribunal held in respect of the application for costs made pursuant to paragraph 40 of Schedule 1 of the Employment Tribunals Regulations 2004 on behalf of the employee on the basis that the conduct of the Respondents' representative was unreasonable and their arguments were misconceived:

"The main issue before the Tribunal today was the Respondents' assertion that the TUPE Regulation 15 did not apply to the Claimant's claim. That, we have found, was misconceived. Without this argument there would not have been needed to be attendance before the Tribunal today. In these circumstances we find that the cost of attendance at the Tribunal today should be awarded to the Claimant."

1. Regulation 13(2):

"Long enough before a relevant transfer to enable the employer of any affected employees to consult the appropriate representatives of any affected employees, the employer shall inform those representatives of -

(a) the fact that the transfer is to take place, the date or proposed date of the transfer and the reasons for it;

(b) the legal, economic and social implications of the transfer for any affected employees;

(c) the measures which he envisages he will, in connection with the transfer, take in relation to any affected employees or, if he envisages that no measures will be so taken, that fact, and

(d) if the employer is the transferor, the measures, in connection with the transfer, which he envisages the transferee will take in relation to any affected employees who will become employees of the transferee after the transfer by virtue of regulation 4 or, if he envisages that no measures will be so taken, that fact."

1. Regulation 13(3):

"For the purposes of this regulation the appropriate representatives of any affected employees are -

(a) if the employees are of a description in respect of which an independent trade union is recognised by their employer, representatives of the trade union; or

(b) in any other case, whichever of the following employee representatives the employer chooses -

(i) employee representatives appointed or elected by the affected employees otherwise than for the purposes of this regulation, who (having regard to the purposes for, and the method by which they were appointed or elected) have authority from those employees to receive information and to be consulted about the transfer on their behalf;

(ii) employee representatives elected by any affected employees, for the purposes of this regulation, in an election satisfying the requirements of regulation 14(1)."

1. Regulation 13(6):

"An employer of an affected employee who envisages that he will take measures in relation to an affected employee, in connection with the relevant transfer, shall consult the appropriate representatives of that employee with a view to seeking their agreement to the intended measures."

1. Regulation 13(11):

"If, after the employer has invited any affected employees to elect representatives, they fail to do so within a reasonable time, he shall give to any affected employees the information set out in paragraph (2)."

1. Regulation 14 deals with the election of employee representatives and places obligations in that regard on the employer.

1. Regulation 15(1):

"Where an employer has failed to comply with a requirement of regulation 13 or regulation 14, a complaint may be presented to an Employment Tribunal on that ground -

(a) in the case of a failure relating to the election of employee representatives, by any of his employees who are affected employees;

(b) in the case of any other failure relating to employee representatives, by any of the employee representatives to whom the failure related;

(c) in the case of failure relating to representatives of a trade union, by the trade union; and

(d) in any other case, by any of his employees who are affected employees."

1. Mr Meredith takes a pleading point. He contends that the claim was made on behalf of the employee under regulations 13(2) and 13(6), and these regulations imposed no obligation on an employer in relation to an individual employee; they impose obligations on the employer in relation to employee representatives. The only obligation on an employer imposed by regulation 13 is that in 13(11) and Mr Meredith contends that there was no 13(11) claim placed before the Employment Tribunal.

1. Neither he nor counsel appearing for the employee, nor the Employment Tribunal themselves, appear to have been aware of the case of Howard v Millrise Limited [2005] IRLR 84. In that case the Employment Appeal Tribunal held that an individual employee has standing to pursue a complaint for breach of what is now regulation 13 of TUPE by means of what is now regulation 13(11).

1. Mr Meredith contends that because a breach of regulation 13(11) was not pleaded, the Tribunal's decision cannot be sustained and the appeal should be allowed. Alternatively he contends that if the claim is to be considered under regulation 13(11), it should be remitted for consideration to an Employment Tribunal. He points to the dismissal letter of 11 February 2009 wrongly included in our bundles to contend that information was given to the Claimant in connection with the transfer in compliance with regulation 13(11). Mr Meredith contends that the Claimant had no right to bring a claim under TUPE regulation 15(1)(b) and that the Tribunal erred in this regard.

1. Ms Moss on behalf of the Claimant says the claim was in respect of breach of the information and consultation requirements of TUPE. She contends that everyone understood the claim. The breach was of regulation 13. Ms Moss contends that an individual employee has a right to pursue a claim against an employer for breach of any of the provisions in regulation 13. She recognises that her contention goes beyond the judgment of the Employment Appeal Tribunal in Howard v Millrise, which found a route for an employee to bring a claim by way of what is now regulation 13(11). In any event, Ms Moss contends that, on the facts of this case, the claim was rightly upheld as a breach of regulation 13 because there was, in any event, a breach of regulation 13(11).

1. Ms Moss points out without dissent and, indeed, with some agreement from Mr Meredith, that it was regulation 15(1)(d) which was under discussion in the Employment Tribunal and it may well be that the Tribunal erroneously in their judgment referred to (b) instead of (d). She contends that the Claimant's claim was properly brought under 15(1)(d) because she was an affected employee.

1. As for the appeal against the costs order Ms Moss contends that resistance to the claim was misconceived. The basis of the resistance by the employers to the claim was that an individual employee did not have a right to bring a claim alleging breach of the TUPE obligations. That is plainly wrong and, in any event, there had been a total disregard by the employers for their obligations under TUPE. Accordingly, the Employment Tribunal did not err in making an award of costs.

1. With respect, this judgment on the Employment Tribunal is not the clearest. There are some errors which may or may not be described as typographical; two in particular in reference to a regulation 13(14) which does not exist and a reference to regulation 15(b) which, again, does not exist. However, in this case there was a wholesale admitted breach of the regulations. There were, in these employers, no employee representatives and no attempt was made to appoint representatives with whom there should have been an exchange of information and consultation in accordance with the regulations.

1. As for the pleading points taken by Mr Meredith in some cases it is of significance that a departure from a pleaded case put in a certain way without notice can cause prejudice. However, in this case there was no doubt between the parties as to what the claim was about. The employee was complaining that there had been a breach of the information and consultation requirements of TUPE.

1. No prejudice said to have been suffered by the employee as a result of putting her claim on the basis of breach of regulations 13(2) and (6) of TUPE has been brought to our attention save a suggestion that there may have been information which could have been adduced had it been thought that the Claimant could bring a claim under TUPE. No doubt one piece of such information was the letter of 11 February 2009 to which we have made reference and which is referred to in the skeleton argument on behalf of the Appellant as showing that the employers' obligation under TUPE had been met.

1. Bearing in mind that there had been an admission that there was non compliance with the regulations and that there was a TUPE transfer, we asked Mr Meredith the basis for this assertion. Mr Meredith was not in a position to say whether there was any material showing compliance with the regulations. The suggestion that there may have been some evidence which could have been adduced but with no indication of what that evidence may have been is the extent of any possible prejudice brought about by the claim having been framed under regulation 13(2) and (6) as opposed to regulation 13(11).

1. It appears that there is agreement between the parties that the complaint was eventually brought under regulation 15(1)(d) and that the reference by the Employment Tribunal to regulation 15(b) must have been no more than a typographical error. So far as the reference to regulation 13(14) is concerned, that, again, is an error but it is to be noted that neither party applied to the Employment Tribunal for a correction of the record in this regard, or in any other regard.

1. In our respectful judgment the pleading point taken by Mr Meredith is entirely without merit. The employers knew that the employee was complaining of a breach of TUPE in that there had been no information or consultation in connection with the transfer. That was the complaint they came to meet. It was their choice to resist that complaint by the argument that an individual employee has no standing to bring such a complaint of breach of TUPE.

1. We do not accept Ms Moss' submission that an employee has an individual right to bring a complaint for breach of any of the provisions of regulation 13.

1. Various obligations are imposed on an employer by different provisions of regulation 13. In the main, those obligations are obligations to inform and consult employee representatives, as is made clear by the cross heading to the regulation albeit in this regard we refer to the cross heading parenthetically and not for any construction purpose. However, there is one provision, regulation 13(11), which does impose an obligation on an employer in certain circumstances to give affected employees the information required by regulation 13(2).

1. The case of Howard v Millrise is, in our judgment, on all fours with this case. The Employment Appeal Tribunal, Bean J in Howard v Millrise held:

"14. The next stage of Mr Holmes Milner's argument is that under Regulation 10(8) the employer is, by implication, obliged to invite employees to elect representatives since otherwise Regulation 10(8A) would be futile. That Regulation plainly on its face requires the employer, if he has invited affected employees to elect representatives and they fail to do so within a reasonable time, to give to each individual affected employee the information required by Regulation 10(2). That provision would be rendered pointless if the employer were not obliged to set the ball rolling by inviting affected employees (assuming there were no recognised trade union representatives or other elected or appointed representatives already in place) to elect representatives for the purposes of TUPE.

15. We accept Mr Holmes Milner's argument in relation to Regulation 10(8A). Once one has got past this stage in the argument the remaining steps are relatively straightforward: the election, when it takes place, must comply with Regulation 10A; and if there has been a failure to comply with a requirement of Regulation 10 or Regulation 10A, a complaint may be presented under Regulation 11(1), subject to the defence of reasonable practicability which is available to an employer but which the employers in the present case did not advance before the Tribunal.

16. It is unnecessary for present purposes to decide whether what occurred in the present case can be analysed as a series of failures to comply with individual provisions of the Regulations or a single course of conduct embracing one or more failures. It is likewise unnecessary to decide whether the complaint in this case properly lies under Regulation 11(1)(a), 11(1)(b) or 11(1)(d). Whichever it is, the failure to take any steps to invite the election of representatives, the failure to give information to such representatives or, in default of election, to give information to Mr Howard himself, or all of these things, there was in our judgment a failure to comply with the Regulations and the Decision of the Tribunal, under paragraph 20 of its Reasons, to reject the complaint of failure to inform and consult must be set aside."

1. There are equivalent provisions to those referred to in the judgment of the Employment Appeal Tribunal in the current regulations to which we have referred. It is apparent from the reasoning of the Employment Appeal Tribunal in Howard v Millrise that what is now regulation 13(11) has implicit in it not only the express obligation to give information to affected employees whom the employer has invited to elect representatives but who have failed to do so but the implicit obligation on the employer to invite the employees to elect representatives and to comply with the requirements which regulation 14 imposes on employers.

1. Accordingly, it is unsurprising that the Employment Appeal Tribunal, in Howard v Millrise, observed that it was unnecessary to decide under which provision of what are now regulations 15(1)(a), (b) or (d), the complaint properly lies. An employee had a right to bring a complaint of breach of what is now regulation 13 by the employer. So too in this case whether the failure was to take any steps to invite the election of representatives, or to give information to such representatives, or, in default of election, to give information to the Claimant herself, or all these things there was a failure by the employer to comply with the regulations.

1. In our judgment, the Tribunal did not err in holding that the employers were in breach of their obligations to inform and consult under TUPE and they were not in error in holding that an individual employee, in this case, Ms Marshall, could pursue a complaint under TUPE to the Employment Tribunal.

1. Accordingly, the appeal from the finding that Ms Marshall was entitled to bring a claim under TUPE is dismissed.

1. The basis of the Employment Tribunal's decision in relation to costs was that the employers' resistance to the claim under TUPE was misconceived and that the costs of the hearing were unnecessarily incurred. We consider that the hearing before us today has illustrated that the question of the standing of an individual to bring a complaint about breach of the regulations is by no means a straightforward and easy matter.

1. Since nobody before the Employment Tribunal was aware of Howard v Millrise, it is perhaps unsurprising that the employers, although they had expert advice, would not have appreciated that the basis of their resistance to the claim was going to fail. Having regard to the difficulty in appreciating the right of an individual to bring a claim under TUPE and in the absence of either party being aware of the relevant authority, we consider that in the circumstances the resistance to the claim was not misconceived and that the Tribunal erred in exercising its discretion to award costs in this case. We set aside the costs award.

1. Accordingly we dismiss the employers' appeal from the finding that the claim by the employee under regulation 15 of TUPE succeeded but we allow the appeal from the costs order and set it aside.