Wilson v St. Helens Borough Council
| Jurisdiction | England & Wales |
| Judge | LORD BROWNE-WILKINSON,LORD SLYNN OF HADLEY,LORD STEYN,LORD CLYDE,LORD HUTTON |
| Judgment Date | 29 October 1998 |
| Judgment citation (vLex) | [1998] UKHL J1029-1 |
| Date | 29 October 1998 |
| Court | House of Lords |
[1998] UKHL J1029-1
HOUSE OF LORDS
Lord Browne-Wilkinson
Lord Slynn of Hadley
Lord Steyn
Lord Clyde
Lord Hutton
And Another
And Others
My Lords,
I have had the advantage of reading in draft the speech of my noble and learned friend, Lord Slynn of Hadley. For the reasons which he gives I would allow the appeal of British Fuels Ltd. in both Mr. Baxendale's and Mr. Meade's cases and dismiss the appeal of Mr. Wilson and others against St. Helens Borough Council.
My Lords,
These two appeals raise important issues under the Transfer of Undertakings (Protection of Employment) Regulations 1981 S.I. 1981/1794 which were made to give effect to the Acquired Rights Directive (77/187/EEC) of the European Council of February 1977.
The Measures
The Regulations provide as follows:
" A relevant transfer
These Regulations apply to a transfer from one person to another of an undertaking [which includes any trade or business] situated immediately before the transfer in the United Kingdom.
"5 Effect of relevant transfer on contracts of employment, etc (1) [Except where objection is made under paragraph (4A) below,] a relevant transfer shall not operate so as to terminate the contract of employment of any person employed by the transferor in the undertaking or part transferred but any such contract which would otherwise have been terminated by the transfer shall have effect after the transfer as if originally made between the person so employed and the transferee. (2) Without prejudice to paragraph (1) above [but subject to paragraph (4A) below], on the completion of a relevant transfer:-
(a)all the transferor's rights, powers, duties and liabilities under or in connection with any such contract shall be transferred by virtue of this Regulation to the transferee; and
(b)anything done before the transfer is completed by or in relation to the transferor in respect of that contract or a person employed in that undertaking or part shall be deemed to have been done by or in relation to the transferee. (3) Any reference in paragraph ( 1) or (2) above to a person employed in an undertaking or part of one transferred by a relevant transfer is a reference to a person so employed immediately before the transfer, including, where the transfer is effected by a series of two or more transactions, a person so employed immediately before any of those transactions.
"8 Dismissal of employee because of relevant transfer (1) Where either before or after a relevant transfer, any employee of the transferor or transferee is dismissed, that employee shall be treated for the purposes of Part V of the 1978 Act [The Employment Protection (Consolidation) Act 1978] and Articles 20 to 41 of the 1976 Order (unfair dismissal) [The Industrial Relations (Northern Ireland) Order 1976] as unfairly dismissed if the transfer or a reason connected with it is the reason or principal reason for his dismissal. (2) Where an economic, technical or organisational reason entailing changes in the workforce of either the transferor or the transferee before or after a relevant transfer is the reason or principal reason for dismissing an employee -
(a)paragraph (1) above shall not apply to his dismissal; but
(b)without prejudice to the application of section 57(3) of the 1978 Act or Article 23(10) of the 1976 Order (test of fair dismissal), the dismissal shall for the purposes of section 57(1)(b) of that Act and Article 22(1)(b) of that Order (substantial reason for dismissal) be regarded as having been for a substantial reason of a kind such as to justify the dismissal of an employee holding the position which that employee held.
"12 Restriction on contracting out
Any provision of any agreement (whether a contract of employment or not) shall be void in so far as it purports to exclude or limit the operation of Regulation 5, 8 or 10 above or to preclude any person from presenting a complaint to an industrial tribunal under regulation 11 above."[2086]
The words in square brackets were inserted by the Trade Union Reform and Employment Rights Act 1993 as from 30 August 1993.
It is common ground that, both under English law and under Community law, the national court should construe a regulation adopted to give effect to a directive as intended to carry out the obligations of the directive and as not being inconsistent with it if it is reasonably capable of bearing such a meaning (see Garland v. British Rail Engineering Ltd. [1983] 2 A.C. 751 and Litster v. Forth Dry Dock & Engineering Co. Ltd. and Anor [1990] 1 A.C. 546). In 61983CJ0014">Sabine Colson and Anor v. Land Nordrhein-Westfalen (case 14/83) 61983CJ0014"> [1984] E.C.R. 1891 the European Court said that, pursuant to Member States' obligations under Article 5 of the EC Treaty, "National courts are required to interpret their national law in the light of the wording and the purpose of the directive in order achieve the result referred to in the third paragraph of Article 189." Accordingly where different options are available and effective to achieve the objects of the Directive it is for Member States to choose between them. It is also common ground that if a Regulation does not properly implement the Directive, the Directive can only be relied upon by the employees involved if they can show that the employer is an emanation of the state. It has not been suggested that BFL is such an emanation or that St. Helens Borough Council is not such an emanation.
The Directive is "on the approximation of the laws of the Member States relating to the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of businesses." It begins by reciting that economic trends have brought about many changes in the structure of undertakings and that "it is necessary to provide for the protection of employees in the event of a change of employer, in particular, to ensure that their rights are safeguarded;"
Article 1 of the Directive provides that the Directive shall apply "to the transfer of an undertaking, business or part of a business to another employer as a result of a legal transfer or merger."
By Article 3:
"1. The transferor's rights and obligations arising from a contract of employment or from an employment relationship existing on the date of a transfer within the meaning of Article 1(1) shall, by reason of such transfer, be transferred to the transferee."
Member states have, however, a discretion to provide that the transferor shall continue to be liable in respect of obligations arising under the contract of employment in addition to the liability of the transferee.
By Article 4:
"1. The transfer of an undertaking, business or part of a business shall not in itself constitute grounds for dismissal by the transferor or the transferee. This provision shall not stand in the way of dismissals that may take place for economic, technical or organisational reasons entailing changes in the workforce. Member States may provide that the first sub-paragraph shall not apply to certain specific categories of employees who are not covered by the laws or practice of the Member States in respect of protection against dismissal."
The Facts
In outline the relevant facts are as follows:
Baxendale and Meade
Mr. Baxendale was employed from 1977 and Mr. Meade from 1978 by the British Coal Corporation ("B.C.C.") or its subsidiary National Fuels Distributors Ltd. ("N.F.D."). On 1 September 1992 the undertakings of N.F.D. and of British Fuels Ltd. ("B.F.L."), another subsidiary of B.C.C., were merged. By letters dated 20 August 1992 B.C.C. gave both men three months' notice of dismissal on the grounds of redundancy saying "your effective date of redundancy will … be 28 August 1992." They received wages in lieu of notice, statutory redundancy pay and further redundancy pay under B.F.L.'s own arrangements. By a letter also of 20 August 1992 B.F.L. offered the men employment with effect from 1 September 1992 on terms which it is common ground were less favourable than those which they enjoyed with N.F.D.
Both men signed the offer letter accepting employment and they began to work on 1 September 1992. On 22 January 1993 B.F.L. notified them that for statutory purposes their service with N.F.D. would be counted as continuous employment with their service with B.F.L. They were given statutory statements incorporating this change into their existing terms which they accepted, Mr. Meade on 23 April and Mr. Baxendale on 14 May 1993.
On 23 September 1994 Mr. Meade claimed before an Industrial Tribunal under section 11 of the Employment Protection (Consolidation) Act 1978 (now section 11 of the Employment Rights Act 1996) that he was employed by B.F.L. on the terms applicable to his employment with N.F.D., having already in the county court claimed a further £10,000 under B.C.C.'s Redundancy Payments Scheme. He is still employed by B.F.L.
On 6 February 1995 Mr. Baxendale was dismissed by B.F.L. as being redundant. Before an Industrial Tribunal in addition to claiming further redundancy pay, and a declaration that he had been unfairly dismissed he sought a declaration under section 11 of the 1978 Act that until dismissed he was entitled to be employed by B.F.L. on the terms of his employment with N.F.D.
Before separate Industrial Tribunals the two men's claims failed, though on different grounds. They also failed before the Employment Appeal Tribunal. The Court of Appeal decided in favour of the men but gave B.F.L. leave to appeal.
In Mr. Meade's case the Industrial Tribunal held that Regulation 12 did not provide that a...
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