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Ralton & Ors v. Havering College of Further Education


Employment Appeal Tribunal

The previous employer of the appellant teachers had not been bound by a previous collective agreement and therefore their employer after a transfer protected by the Acquired Rights Directive was also not bound to incorporate that collective agreement into the contracts of employment.

Appeal by three teachers from an employment tribunal's dismissal of their claim against the respondent employer ('the College') for a declaration under s.11 Employment Rights Act 1996. The College was a statutory corporation established under the Further and Higher Education Act 1992 and the body responsible for managing and maintaining a college of further and higher education. Before 1 April 1993 the College had been maintained by the local authority. On that date a transfer, to which the Council Directive 77/187/EEC (commonly known as the "Acquired Rights Directive") applied, occurred between the local authority and the College and the appellants' jobs transferred to the College. Before the transfer the appellants' contracts of employment had expressly incorporated the terms of a collective agreement known as the "Silver Book". After the transfer the appellants continued to work under their previous contracts of employment. After that they all entered into new fixed term contracts which also incorporated the Silver Book terms. Before the expiry of those fixed term contracts the appellants entered into new contracts that were fundamentally different from the previous contracts and that, importantly, excluded the Silver Book terms. The appellants submitted in their appeal that: (i) the nature, extent and effect of both an "employment relationship" under Art.3, and a "collective agreement" under Art.3(2) of the Directive fell to be determined by community law; (ii) therefore the Silver Book agreement remained binding on the College unless and until it came to an end in accordance with Art.3; and (iii) Art.4(2) was wide enough to cover the situation where an employee's contract of employment was substantially varied by an employer but the employee nevertheless continued to work.

HELD: (1) The local authority had not been bound to employ the appellants on Silver Book terms, in the absence of a transfer to the College, after the termination of their then existing contracts; see: s.179 Trade Union and Labour Relations (Consolidation) Act 1992 and National Coal Board v National Union of Mineworkers (1986) ICR 736. That conclusion meant that the appellants' argument effectively was that the College was encumbered with different obligations because of the transfer and the Directive from those that the local authority had carried. That was a surprising argument: it flew in the face of the language of Art.3(1) and Art.3(2). Both domestic and ECJ law showed that the purpose and effect of the Directive was not to alter the rights and obligations between employer and employee after transfers of undertakings; see, in particular: per Lord Slynn in British Fuels v Baxendale and Wilson v St Helens Borough Council (1998) ICR 1141. The appellants had chosen to rely on pragmatic and political points rather than rights and obligations. The change from Silver Book terms was no different from other changes in the management of further and higher education colleges. (2) The terms "employment relationship" and "collective agreement" did not have community law meanings because: (i) the existence of a contract of employment or an employment relationship was a matter for national law; (ii) the rights to be protected depended on national rules of law of contract and statute; and (iii) because of the guidance given by the ECJ in Rask (1992) ECR 5755. Therefore no questions needed to be referred to the ECJ. (3) For the reasons in (1) and (2) above, the appellants' argument under Art.3 was rejected. (4) Art.4(2) did not address a variation in contract and then the continuation of that contract. It dealt with constructive dismissal and the responsibility for terminating a contract of employment. The present case did not involve such a termination. In any event, the appellants' argument under Art.4(2) could not survive the failure of their argument under Art.3 because the latter argument had been necessary to point to a right which had been removed. For those reasons, the appellants' argument under Art.4(2) was rejected. (5) The tribunal's decision was not perverse because it was based on evidence before the tribunal. It also contained sufficient reasoning.
Appeal dismissed.

LTL 29/10/2001,[2001] 3 CMLR 57,[2001] IRLR 738,[2001] Emp LR 1203.

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