December 10 2007 Employment Law Enews

Welcome to the latest edition of Steeles Law Employment Enews

TUPE AND NEW TERMS OF EMPLOYMENT

The Court of Appeal has recently confirmed the Employment Appeal Tribunal (EAT)'s decision in the case of Regent Security Services Limited v Power meaning that a transferring employee can choose to rely on new, more beneficial terms agreed with the employer.

FACTS

Mr Power was employed with a contractual retirement age of 60. His employment was transferred to Regent Security Services Limited ("Regent") in 2005, after which he agreed to be bound by the terms of employment in the company's staff handbook. This stated a retirement age of 65.

Regent subsequently retired Mr Power at the age of 60, and he brought a claim for unfair dismissal on the basis that he had agreed a new retirement age of 65. The company argued that the change to his retirement age was void as it was by reason of a TUPE transfer. The tribunal agreed, holding that under TUPE 1981, employees transferred on their existing terms of employment and any changes (whether to the employees' benefit or not) were void.

The EAT upheld the claimant's appeal, holding that transferring employees can take advantage of changes made to their benefit as a result of a TUPE transfer even though they can object to any change to their detriment. Regent appealed to the Court of Appeal.

HELD

The Court of Appeal dismissed the appeal and upheld the EAT's decision. The aim of TUPE is to protect the rights of employees on the transfer of an undertaking, and it would be inconsistent not to allow employees to enforce contractual benefits acquired as a result of the transfer. A transferred employee's existing rights will be protected on a TUPE transfer, meaning that the employee can choose whether to enforce a transferred right or a newly acquired right.

COMMENT

This decision concerned TUPE 1981, but under TUPE 2006 the outcome is likely to have been the same. In practical terms, it means an employee can "cherry-pick" those terms he or she considers most favourable. To guard against this, it is advisible for employers to ensure that when granting new (more favourable) rights to transferred employees, these will have to be forfeited if the employee seeks to enforce one of the original terms.

TRIBUNALS MUST CONSIDER COMPLIANCE WITH DISMISSAL PROCEDURE

The EAT has ruled in Venniri v Autodex Limited that tribunals are obliged to consider whether an employer has followed the statutory dismissal and disciplinary procedure, even where this has not been expressly challenged by the claimant in an unfair dismissal claim.

FACTS

Mr Venniri worked for Autodex Limited ("Autodex") as a paint sprayer. His contract contained a mobility clause requiring him to work at any of Autodex's four sites. Mr Venniri was working at the Cowley site and was asked to provide three days cover at Rickmansworth the following week. Mr Venniri allegedly swore at a manager and refused, thinking that Autodex intended to permanently relocate him to Rickmansworth.

Mr Venniri's refusal was dealt with at a disciplinary hearing the following week, at which he was told by Autodex that he had been dismissed the previous week. Mr Venniri's appeal was later dismissed and he brought a claim for unfair dismissal.

HELD

The tribunal held that Mr Venniri's dismissal was fair. Mr Venniri appealed arguing that the tribunal had not considered whether the statutory dismissal and disciplinary procedure ("DDP") had been completed.

Autodex argued that since Mr Venniri had not put forward an argument to the tribunal regarding the alleged failure to comply with the DDP it was not open to him to argue this point on appeal.

The EAT held that the tribunal's decision had not identified compliance with the DDP as an issue and the DDP is part of the essential fabric of unfair dismissal law. They confirmed that in every unfair dismissal case a tribunal should consider:

1. Whether there is an applicable procedure (i.e. whether the DDP applies);
2. Whether there has been non-completion of that procedure; and
3. Whether that non-completion is wholly or mainly attributable to failure by the employer to comply with its requirements.

The EAT stated that a claimant does not need to explicitly raise the alleged non-compliance of the DDP as an issue; the tribunal should have the matter in mind at the outset. In addition, Mr Venniri had included the relevant documents in the bundle and made reference to not receiving anything in writing prior to the disciplinary meeting and therefore he was not raising anything new in the appeal.

In light of the above the EAT found that the dismissal was automatically unfair and remitted the case for a fresh tribunal to deal with remedy.

COMMENT

This judgment conflicts with an earlier decision in which the EAT did not consider that the tribunal was automatically obliged to consider the application of the DDP. In practice, claimants should raise this as an argument and not rely on the tribunal doing so.

It also contrasts with the position in relation to the statutory grievance procedures, where tribunals are not obliged to consider whether the employee has lodged a grievance and waited 28 days before submitting a claim. The burden is on the employer to raise this as a defence.

This article copyright © 2007 Steeles Law llp. All rights reserved.