June 13 2005 Employment Law Enews

Welcome to the latest edition of Employment Law enews. In this issue we look at whether a transfer of undertaking can take place over a period of time; redundancy dismissals and offers of suitable alternative employment; the difference between a disciplinary and an investigative meeting.

CAN A TRANSFER OF UNDERTAKING TAKE PLACE OVER A PERIOD OF TIME?

Celtec Ltd v Astley and Others 2002

The case of Celtec Ltd v Astley and ors 2002 has established that a transfer of undertaking cannot take place over a period of time. The period during which a transfer took place was a question of fact for the tribunal; and that given the Directive was adopted to safeguard the rights of employees , there was no reason as a matter of policy to deprive those employees who throughout the relevant time and continued to work for the relevant business of their accrued rights.

Mr Astley, and 2 of his colleagues (a Ms Hawkes and a Ms Owens) were former civil servant in the Department of Education. As part of the Government's reform of vocational training in the early 1990s, the three of them were at first seconded to and later became direct employees of Celtec Limited, one of the many Training and Enterprise Councils established as part of this reform process.

Some years later Mr Astely, Ms Hawkes and Ms Owens sought brought a case in the employment tribunal in order to establish that their employment with the Civil Service should be treated as "continuous" with their employment by Celtec. This was an important issue for Mr Astley and his colleagues as because, for example, a redundancy payment calculated by reference to the both periods of employment would be considerably bigger.

If Mr Astley was able to show that there had been a transfer of an undertaking under the Transfer of Undertakings (Protection of Employment Regulations) 1981 his employment with the Civil service would be counted. However, the main problem for Mr Astley was showing that the date of the transfer coincided with the actual date he was first employed by Celtec. Celtec maintained that the transfer had occurred some years previously when Mr Astley was first seconded. The employment tribunal agreed with Mr Astley. Celtec appealed successfully to the Employment Appeal Tribunal, Mr Astley appealed successful to the Court of Appeal and Celtec appealed to the House of Lords who in turn referred the issues to the European Court of Justice because the Transfer of Undertakings 1981 has its origins in European law.

In proceedings in the employment tribunal, the applicants sought to bring an application to the tribunal to dispute the length of continuous service as obviously this would have major effects on their entitlements for redundancy payments. The applicants were relying on the fact that they had continuous employment under the proposes of the council directive 77/187 EEC;

"The directive is a safeguarding mechanism that protects employee's rights in the event of a transfer of undertaking".

The applicants stated that their continuous service started from the date they commenced employment as civil servants and not when they changed their employment status to the council upon their secondment.

The European Court of Justice (ECJ) considered the wording of the acquired rights directive; - "rights and obligations existing on the date of the transfer." They ruled that the use of the word 'date' (singular), combines with the need for legal certainty means that Claimants must be able to point to a specific date on which they say the transfer occurred.

The TUPE regulations, Transfer of Undertakings ( Protection of Employment Regulations) 1981 has proven to be somewhat difficult to interpret , but now upon the ruling in Celtec Ltd V Astley case it leaves the status of reg "3(4) (a) of TUPE which provides that "a transfer may be effected by a series of transactions", somewhat unclear.

However, the ECJ ruling should be considered as taking precedence and therefore we should be aware that a transfer of an undertaking cannot take place over a period of time.

REDUNDANCY DISMISSALS AND OFFERS OF SUITABLE ALTERNATIVE EMPLOYMENT

When it comes to redundancy, the ingredients of a fair dismissal are well established: Essentially, an employer must make a fair selection, consult with the employee, offer such suitable alternative employment as is available, and of course comply with the requirements of the Statutory Dismissal and Disciplinary Procedure

The case of Fisher v Hoopoe Finance Ltd serves as a reminder that when it comes to making offers of alternative employment the employer should ensure that the employee is given sufficient information about the alternative job so that he or she can properly consider it. Apart from making good sense anyway, a failure to do this could lead to a finding that the dismissal was unfair.

This does not mean that the employer has to be a mind-reader. The Employment Appeal Tribunal also made the point that the employee cannot simply sit back and do nothing. If he or she fails to indicate an interest in a particular job and/or fails to make relevant enquires of the employer then it is open to a tribunal to conclude that any compensation should be reduced on the basis of what is known as "contributory fault".

DISCIPLINARY MEETING OR INVESTIGATIVE MEETING - WHAT'S THE DIFFERENCE?

If an employee is required or invited to attend a disciplinary or grievance hearing he or she has a statutory right under section 10 of the Employment Relations Act 1999 to be accompanied by a trade union official or a fellow worker.

Employment tribunal claims based on a denial of this right are relatively few and far between, but there is a useful lesson to be learnt from the recent decision of the Employment Appeal Tribunal (EAT) in the case of Skiggs v South West Trains Ltd.

Mr Skiggs, who was employed South West Trains as a train guard, was the subject of a grievance by another employee who alleged that he was spreading rumours of a relationship between this and another employee. Mr Skiggs was suspended and later called to an in investigatory meeting. Mr Skiggs insisted that he would not attend unless he was allowed representation and this resulted in an impasse between him and South West Trains.

When Mr Skiggs subsequently complained to the employment tribunal he argued that the investigatory meeting was a disciplinary hearing as defined in the Employment Relations Act 1999 due to the formality of the hearing and the prospect that it could lead to disciplinary action against him. The employment tribunal disagreed and Mr Skiggs appealed to the EAT.

The EAT was clear that what matters is the character of the hearing, not the label the parties give to it and that only those meetings that result in a sanction penalty or warning which then forms part of the employee's disciplinary record could be regarded as disciplinary. However, the EAT also recognised that there could well be a "point of transformation" when a meeting changes in nature from investigatory to disciplinary. In this case the EAT was satisfied that the meeting had remained on the "investigatory side of the line" and so it dismissed Mr Skiggs appeal.

This issue will not present a problem for employers who are happy to extend the statutory right to be accompanied to investigatory meetings. For employers who prefer not to, it is important that "as a matter of fact and degree" an investigatory or other fact-finding meeting maintains that character from start to finish.

This article copyright © 2005 Steeles Law llp. All rights reserved.