Employment law practice update

Newbound v Thames Water Utilities Ltd

Facts: The claimant, who had 34 years’ service, was dismissed for gross misconduct in breaching his employer’s health and safety procedures. As part of his duties, he had led a working party into a sewer, and he was the most experienced - although not technically the most senior - member of the party. He was not wearing the breathing apparatus required for health and safety reasons, and neither was a colleague, who less experienced but in charge of the working party. The colleague was given a written warning, but not interviewed as part of the disciplinary investigation in relation to the claimant. An employment judge ruled that the dismissal was unfair; however, this decision was overturned by the Employment Appeal Tribunal (EAT).

Decision: On appeal to the Court of Appeal, the claimant argued that there was no error of law in the employment judge’s decision, and thus no basis for the EAT to interfere with it. Section 98(1) of the Employment Rights Act (ERA) 1996 provides that it is for the employer to show what the reason for dismissing the employee was.

In this case, there was no dispute that it was on the ground of conduct, a potentially fair reason under section 98(2)( b). Section 98(4) provides that:

… the determination of the question whether the dismissal is unfair (having regard to the reason shown by the employer) – (a) depends on whether the circumstances (including the size and administrative resources of the employer’s undertaking) the employer acted reasonably or unreasonably in treating it as a su›cient reason for dismissing the employee; (b) shall be determined in accordance with equity and the substantial merits of the case (para 57).

It is well established that the key question in an unfair dismissal case is whether the decision to dismiss was within the band of reasonable responses open to a reasonable employer. However, as the Court of Appeal pointed out:

… [t]he band is not inÿnitely wide ... in creating the statutory cause of action of unfair dismissal parliament did not intend the tribunal’s consideration of a case of this kind to be a matter of procedural box-ticking ... an employment tribunal is entitled to ÿnd that dismissal was outside the band of reasonable responses without ... placing itself in the position of the employer (para 61).

The Court of Appeal had little diÿculty in restoring the employment judge’s decision, pointing out that ‘a finding of primary fact cannot be overturned on appeal unless there was no evidence to support it’ (para 66 (emphasis in original)) .

Comment: This decision bucks the trend of earlier rulings which imply that the test for finding an employer’s decision to dismiss unfair is analogous to a ‘perversity’ test, and may result in fewer successful appeals to the EAT (para 67). But it is sobering, as the Court of Appeal said: ‘that in a jurisdiction which was intended to provide speedy adjudication, with stringent time limits for the presentation of claims, Mr Newbound’s claim has taken nearly four years from his dismissal to reach judgment in this court’ (para 82).

Jakowlew v (1) Nestor Primecare Services Ltd t/a Saga Care (2) Westminster Homecare Ltd

Facts: Saga had an organised grouping of employees, including the claimant, who worked for a local authority. The authority wrote to Saga, giving an instruction that she and two fellow employees, who had been involved in an internal dispute, should not continue to work on the contract. The authority had the contractual right to issue such an instruction. Nevertheless, Saga contested the instruction, and subsequently transferred the organised grouping to Westminster Homecare Ltd (WHC). The question was whether or not the claimant formed part of the organised grouping transferred. An employment judge ruled that she did not, as a result of the instruction to remove her from work on the contract.

Decision: The claimant’s appeal was upheld by the EAT. It was for the employer, not the client, to assign its employees. Saga could have taken steps immediately to remove the claimant from the group of workers dealing with the contract. If it had done so, she would no longer have been assigned to the group. However, Saga did not take this course. Saga challenged the instruction and sought to persuade the authority to change its view. In such circumstances, an employer will not necessarily change the assignment of an employee from the group of workers concerned. The employment judge had erred in failing to consider whether Saga had acted on the instruction it was given. On the facts, it was clear that Saga had transferred the claimant as part of the organised grouping.

Comment: Questions concerning assignment in the context of a transfer under the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) 2006 SI No 246, as amended by the Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014 SI No 16, have vexed employment lawyers for almost 30 years since the decision in Botzen v Rotterdamsche Droogdok Maatschappij BV [1986] 2 CMLR 50. The decision here reflects a robust, common-sense approach not always evident in the case-law on TUPE.

It is now established that the question of whether or not an employee was assigned to the part of the undertaking transferred under TUPE is to be answered by looking at the contractual position as between employer and employee. Here, at the time of the TUPE transfer, Saga continued to treat the employee as assigned to the grouping in question, and that was what mattered. The EAT considered that this outcome accords with:

… practical reality and justice. If the law were otherwise, it would treat an employee as no longer assigned to an organised group of employees even though the employer still wished him to be such and treated him as such (para 29).

The EAT pointed out that in relation to one of the three employees in respect of whom the instruction was given, the authority relented subsequently: ‘It would be odd indeed if she had lost her TUPE protection even though her employer had treated her as at all material times belonging to the group of workers which transferred and even though the employer was in due course vindicated’ (para 29). Understandably, the EAT decided that only one outcome was possible, namely, that the claimant was transferred to WHC.